Licensing - Oh Boy!

(Dedicated to Catherine of West Virginia)

There are many nuisances to becoming a commercial food/beverage/beer manufacturer. It can be very intimidating at first, and it takes quite an effort to get all your ducks in a row. Below are some of the agencies you'll need to get in touch with.

First and foremost, you need to find a certified commercial kitchen space. This took me years to find...if you don't build one out yourself (which will cost a ton) it's hard to find one that is available for your use. But if you can find one that is already licensed and zoned, you'll find it easier to get started.

Before even getting into food/beverage production, you'll need to organize your business with the Secretary of State. This is actually pretty easy, no need to hire a consultant here. Some exploring on their website and a couple of phone calls should be all you need. There are many ways you can form, from Sole Proprietor, to LLC, to Inc. Each has its advantages and disadvantages. Once you are registered with your state, it's up to you to report taxes.

Registering with the Secretary of State is easy compared with what's to come. To give you an idea, Deane's Kombucha is regulated by the MN Dept of Ag, the FDA, the TTB (federal alcohol and tobacco), MN Alcohol and Gaming Commission, MN Dept of Revenue, WI Alcohol Bureau and WI Dept of Revenue. Not sure if I missed anything...And as an added bonus, each agency has its own rules and restrictions, and they don't always resonate with the other. It is really up to you and you alone to learn exactly what you need to do to be compliant with each. It will take many phone calls, and even within the agencies you'll get different answers. It can be frustrating to say the least.

Example...I was registering with the WI Alcohol Bureau. Part of the requirement was to get my label approved by the TTB. I went to the TTB. They told me that since I am licensed as a beer but NOT using malt, they do not have jurisdiction over my label, the FDA does. Unfortunately the FDA does not "approve" labels, they only let you know if you're not in compliance. So I am in a catch 22. This is just one example of some of the conflicts that arise when you are under the jurisdiction of so many agencies.

The first step, once you have a commercial kitchen set up and zoned, is to contact your State Dept of Agriculture. They will consult with you over the phone, giving guidance on NSF certified equipment and proper processes. Eventually they will come out and observe your process.

In MN, my MN Dept of Ag Rep is also an FDA rep, so luckily I kill two birds with one stone.

Being classified as an alcoholic beverage created a hurdle that made the state agencies seem like a walk in the park. Be ready for loads of paperwork, lots of waiting (typically 90 days or more) and many questions while your application is being processed. You can find the TTB requirements at www.ttb.org.

Then once licensed by the TTB, you get to go through a similar process with your state agency (though luckily not half as long.) Bear in mind, you will probably be paying rent on a space while all this is up in the air. Sound fun?

Also understand that it is illegal to be producing any commercial product while all this is happening. You basically need to start at ground zero AFTER getting all of your licenses.

That is a start. This process takes time, effort, money and tons of patience. But if you have a solid product and a solid business plan do NOT let these hurdles get in your way.

There are many points along this process that take a leap of faith. Be ready for those checkpoints, and be ready to take several leaps.

My biggest advice throughout all of this is to have a clear business plan. Find several people to advise you. Take your time and work it out with local agencies. In Minnesota we have SCORE which supports small businesses. But even with (or without) their blessing, you'll need to believe in yourself. Because you will NEED the confidence that your plan is sound to give you the fire it takes to blast through all this red tape.

Licensing - Oh Boy!

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