South Dakota cottage food laws make it easy to open but encourages your business to expand into a full fledged licensed retail business by putting a cap on your income you’re allowed to make annually.
However, getting started is as simple as saying… I’m going to open and run my own cottage food operation from my home – starting right this minute.
NOTE: Although against the intent and purposes of the limitations, many cottage food vendors find it near impossible to grow beyond cottage food being limited to $5,000 annually, so some don’t report accurately while saving until their income reaches something more reasonable – in able to open a licensed commercial kitchen with no limitations. 😉
Table of Contents
HOW TO START YOUR COTTAGE FOOD BUSINESS IN SOUTH DAKOTA – LICENSING
To start your cottage food business, simply follow the steps below:
STEPS TO START
Always contact your local city / county office and verify if a business license is required prior to starting.
This is simply done by calling the main number to your city and letting them know you are starting a cottage food business and ask if you need a business license.
- Pick foods to offer from the “allowed” food types listed below.
- Check with your local city/county for any zoning restrictions
- Get a local business license in your City/County
- Get labels made (see label example below)
- Start baking/cooking, marketing and selling
FIND AN ERROR – GET A SPECIAL GIFT
If you find an error, omission, mistake, broken link, any outdated information or an addition that we missed – simply email me at [email protected] a link to the page and any information and I’ll send you something awesome.
SOUTH DAKOTA COTTAGE FOOD LAWS – Foods That Are Allowed
The following are examples of products allowed to be made from your home. Keep in mind that some items, for example… breads like focaccia bread are not allowed.
Always check first: VERIFY ANY FOOD YOU PLAN TO MAKE… CALL: Holly at (605) 697-7475
- Sweet breads
- Crackers & Pretzels
Real Life Cottage Food Entrepreneurs and Opportunities
- Cakes – teacher turns kitchen into bakery
- Doughnuts – cottage mini donut vendor
- Fruit jams and jellies –
- Kettle corn – real kettle corn vendors from home
- Popcorn (plain and flavored) – see a real home vendor here
- Talk and Join hundreds of others here: VendorsUnited.com
SOUTH DAKOTA COTTAGE FOOD LAWS – PROHIBITED FOODS
- Baked foods that require refrigeration for safety may include: cream or custard filled pastries (such as kuchen), pumpkin pie, and flan.
This pertains to custards or cream fillings that commonly contain dairy products, eggs or certain soy products.
- Temperature Controlled Foods – (foods requiring refrigeration)
NOTE: Although eggs, milk and dairy products are not allowed, used as ingredients for the allowed foods – is acceptable.
Many prohibited foods that are baked or cooked into the allowed foods are rendered harmless (non-TCS) and therefore allowed.
SOUTH DAKOTA ANNUAL SALES LIMITS
Most states set a cap on what you’re allowed to make annually.
This is usually put in place to push you towards opening a full-fledged retail business while at the same time letting you start from home.
South Dakota has an annual sales limit for cottage food entrepreneurs at $5,000. It reads in a way that the $5,000 limit only applies to in home sales and not food sold at farmers markets and festivals. NOTE: I searched entire laws under section 35 and found no where it states a limit
Orders from your home: the total gross receipts from the sale of baked goods from the person’s own primary residence does not exceed five thousand dollars in a calendar year.South Dakota Joint Venture (Health Dept. and Ag Extension)
Below is what the state of Colorado puts out to help folks wanting to go beyond cottage foods.
Colorado created a brochure on going beyond cottage food once you’ve outgrown or hit your maximum allowed income.
I have provided it here for a resource as you grow your business and wish to expand.
ACIDITY LEVELS AND TESTING
Most states determine if a food is non-potentially hazardous by the acidity level found in the food. The higher the acidity, the more stable at a range of temps, that food product is.
For example: milk is low acidity and requires temperature controls.
The acidity of foods is measured by pH.
• The range of pH is commonly considered to extend from zero to 14. A pH value of 7 is neutral because pure water has a pH value of exactly 7.
Values less than 7 are considered acidic, while those greater than 7 are considered basic or alkaline.
• All fruits are acidic foods and are usually tart and sour. Ex: tomato, lemon, peach, apple, etc.
• The FDA rule for acidic foods states that a food must have a pH below 4.6 to be sold as a minimally processed food
• The reason for this is bacteria does not grow at this level of acidity.
• The exclusion shall not be construed as allowing the sale of low acid foods (pH > 4.6) i
hermetically sealed containers (i.e. home-canned green beans, peas, etc.) when such
food is not prepared in a permitted establishment.
Some states require testing if the pH level is unknown.
For many food products, the pH level is already known. You can test for pH yourself using a pH spear tester. (make sure it is made for food and has a long spear tip).
Oklahoma State University shares an awesome guide for selecting the correct tester for foods and liquids which includes tips and tricks for operation and maintenance. Get The Guide Here.
SOUTH DAKOTA COTTAGE FOOD LAWS LABELING REQUIREMENTS
The basic information that must be on the label is as follows:
Sales of non-temperature controlled baked goods are exempt from licensing requirements if they meet the following conditions:
- Any of non-temperature controlled baked goods are exempt from licensing requirements if they meet the following conditions:
- Name of Product
- Producer and contact information
- Date the product was made or processed
- A disclaimer that states: “This product was not produced in a commercial kitchen. It has been home-processed in a kitchen that may also process common food allergens such as tree nuts, peanuts, eggs, soy, wheat, milk, fish, and crustacean shellfish.”
- Selling from a display case at the farmer’s market – the information must be on the display case or made available in written format to the customer when purchased.
COTTAGE FOOD LABEL EXAMPLE
Below is an example of what South Dakota requires on their labels.
Using VistaPrint.com or similar – you can quickly create professional labels that not only serve to meet the state cottage food guidelines but also serve for marketing your awesome business and products.
You’ll find some fantastic examples of this from members inside VendorsUnited.com
ALLERGENS ON LABELING
The FDA lists eight (8) major food allergens. Listing any of these on your label is a smart business practice and will certainly help your customers choose a product.
- Fish (e.g., bass, flounder, cod)
- Crustacean shellfish (e.g., crab, lobster, shrimp)
- Tree nuts (e.g., almonds, walnuts, pecans)
Simply add to your label: “CONTAINS: SOYBEANS” Some go as far to announce that a certain allergen is used in the same kitchen.
Some states require you list any potential allergens and potential for any cross contamination even if the allergen is not used in the recipe.
FDA Allergen Labeling Example: Contains Wheat, Milk, Egg, and Soy
WHERE CAN I SELL MY COTTAGE FOOD PRODUCTS
South Dakota Cottage Food Laws – Sales Rules
All sales, including online sales, are restricted to:
Online (no mail order)
Some sell and market online but food is delivered in person.
Inside kitchenincome.com you can find out how many cottage food entrepreneurs are getting sales faster than they can make the food.
FOOD HANDLER TRAINING AND BEST PRACTICES
South Dakota does NOT require you take a food safety course.
However, knowing the safe handling practices will protect you and your customers, it is always a good idea to take a quick online class and get certified.
There are many short courses you can take online and actually get certified and be able to share that with your customers.
Many of our VendorsUnited.com members our proud to display their food safety certificates as a way to insure their customers that they care. This helps your business.
- Short courses that provide food handling and safety certification
- Free info from the FDA – food safety
Much of this may seem like common sense, but even if you already know, it’s a good idea to remind yourself with a list of things that can prevent you from missing something small.
And if for no other reason… CYA! CYA = Cover Your A#%
CLEAN WORK AREA / WORK SPACE / SANITIZATION
Providing safe to eat foods from your kitchen – starts in your kitchen.
Keep your area clean and sanitized to avoid cross contamination and to insure you provide your customers and clients with the safest and best foods they can get.
The following are some “common” sense things you can do to insure the best environment for preparing foods to sell:
- Keep all equipment and surface areas clean and sanitized
- Make sure window and door screens are bug proof with no gaps
- Keep ingredients separate to prevent cross contamination / e.g. raw eggs near flour
- No pets in work area and preferably none in the home
- Allow no-one with a cold, sniffles or sick in kitchen while preparing foods
- Wipe down walls and clean floors daily
- Use good lighting to avoid missing unclean areas
- Keep window and door screens in good repair to keep insects out
- Wash hands frequently while working and use food grade gloves for extra safety
- Keep areas of food storage and equipment storage clean and sanitized
Why keep these types of records?
Let’s say the inspector calls you and says they got a report that your banana bread, someone purchased, made them sick.
You’ll be able to show that you didn’t even make banana bread that week and that the person who reported you, bought that 4 weeks ago and you weren’t even the one that sold it to him.
This does not need to be complicated. I love my yellow legal pads and they make an inexpensive tool for keeping up with the following:
- The recipes you use including ingredients
- The process you use to prepare that specific recipe: (can be just like recipe instructions)
- Date made (can be coded for your own use only if your state doesn’t require the production date) e.g. Made 12.22.29 = 292212
- Date sold (you can have a batch code to help track a certain batch) Simply write down date you sold an item
- Location sold is another great piece of information to keep track of
- Sales receipts are something great to keep for a couple of reasons and over at KitchenIncome.com I dive into the best practices, best systems and best methods for tracking, managing, selling and shipping.
COTTAGE FOOD lIABILITY INSURANCE
We live in a society that likes to sue. I can sue you for wearing that color shirt. No kidding!
Of course I probably won’t win, but at the very least, it’s gonna cause you stress and some costs.
Liability insurance is a MUST.
It can be expensive – but several years ago, I found FLIP and by far, they gave me the most protection (coverage) and allow you to run your cottage food business without fear of being sued.
WHY? Because they provide the lawyers. And their lawyers… they are good!
Of course you should price shop around with your local agent or a national brand company, but rest assured, I’ve done all the legwork for you.
Alternatively, some folks opt to get bonded. You’ve heard the saying before: “licensed and bonded”.
A bond is usually provided from an insurance bonding company or your own insurance company. My first time, I got a bond at State Farm.
A bond is expensive comparatively but is less out of pocket in the beginning. Of course, it’s way, way less insurance / coverage too.
A $10,000 bond may cost $50 annually while a $2,000,000.00 liability policy may cost a few hundred a year.
No matter what you decide… knowing you’re insured against frivolous lawsuits is worth every penny.
SOUTH DAKOTA COTTAGE FOOD LAWS IMPORTANT LINKS
- South Dakota Updated Info Page – Cottage Food Law
- South Dakota – Full Laws – See section 34-18-34 / 35 / 36 / 37 / 38
SOUTH DAKOTA COTTAGE FOOD CONTACT INFO
SD Agriculture Extension
SDSU Extension Sioux Falls Regional Center
4101 W 38th St Ste 103
Sioux Falls, SD 57106
605-782-3290 – Curtis Braun
SD Department of Health – Food Safety Site
NOTE: Links on DEPT OF HEALTH page all go to Ag. Ext site’s main page and no longer link to relevant pages as described.
UPDATES TO SOUTH DAKOTA COTTAGE FOOD LAWS
From time to time, links, info, rules and numbers change, are updated or made obsolete.
Although I spend time daily with hundreds of vendors (many of which are cottage food businesses) – I can miss an update.
If you find a broken link, outdated information or any other issue… please let me know and I’ll send you a special gift for helping me maintain the best site on the internet for the cottage food industry.
My goal has always been to have a central place that is absolutely free those starting out or existing entrepreneurs who use their homes and kitchens to make real incomes.
Need more resources? Check it out HERE (Helpful Resources)
Take a peek at the best vendors on the planet, the community that rocks the food vending world: Vendors United…
This information is provided to help those interested in starting a cottage food business. It is not a document made by the state government. This information is not provided as law nor should be construed as law. Always use the contact information for each state to confirm compliance and any changes.
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