UPDATE, 10:39 p.m., EST: California’s Democratic Governor Jerry Brown on Tuesday signed the Homemade Food Operations Act (AB 626) into law.
Renée McGhee didn’t realize she was embarking on a life of crime when she started selling homemade food to friends and neighbors through an Oakland, California-based web platform called Josephine. The food-sharing startup, which had raised more than $3 million in seed and angel funding, connected home cooks who wanted to sell their food to hungry neighbors who wanted to buy it.
While nursing two broken fingers from a biking accident and at the same time fighting depression, McGhee, a retired grandmother who lives in Berkeley, stumbled across an online advertisement that asked, “Do you have a passion for cooking?” The accomplished home cook was impressed by the information she found after clicking through, so she filled out an interest form, thinking, “This is too good to be true.”
But a few days later, she received an email response. “Within days, I had an appointment. Two young women from Josephine came to my house, I prepared a meal for them, and Josephine covered the cost of the ingredients,” she says.
After devouring every last bite of McGhee’s pulled pork and cabbage slaw on ciabatta, the women asked how soon she wanted to start cooking for Josephine. They inspected her kitchen and looked around her home. They shared literature about health and safety and provided her with take-out containers. They even taught her to photograph and market her food to other members of the online community.
Within two weeks, McGhee was serving $12 meals of lasagna, garlic bread, and green salad to 11 community members, who picked up their meals at her doorstep and took them home. The next week, she served 16 people. “I thought, ‘this is awesome!’ I met so many wonderful people. And maybe 45 percent of my guests were seniors, which warmed my heart.”
By the third week, she decided, “I know these people well enough. I let them know that if they wanted to stay and eat, that was fine.”
She set up bistro-style tables on her patio with white linens, flanked by tea stands stocked with lemonade and water. Several of the members stayed for dinner. “People sat on my patio like they were family. My neighbors saw it, and stopped by to say hello. It became a wonderful sense of community.”
And then, toward the end of 2016, two representatives from the Berkeley Environmental Health Department knocked on McGhee’s door and presented her with a cease and desist letter. “It could not have been more shocking if they handcuffed me,” she says. “In that moment, I felt like a criminal. Here I am, doing what I love. People are benefiting from it by choosing to come here, and you’re telling me I’m breaking the law.” She shut her informal enterprise down.
Mariza Ruelas had a similar experience in Stockton. For nearly two years, she supplemented her family’s income by selling tortas, ceviche, and chicken-stuffed fried avocados on the Facebook group 209 Food Spot. But in July of 2015, she received a notice to appear in court to face two misdemeanor charges for operating a food facility and running a business without a permit.
After more than a dozen court appearances; threats of jail time, fines, and probation; and an inability to land a job because of the pending charges, Ruelas and the San Joaquin County district attorney struck a deal in February requiring her to perform 80 hours of community service and agree to not sell or trade food online without the proper permits.
Ruelas and McGhee had no idea they were breaking the law. In fact, hundreds—if not thousands—of home cooks in California break the law every day, by selling or trading food with neighbors, contributing dishes to the church BBQ fundraiser, peddling tamales on the street, selling Chinese dumplings on WeChat, or hosting a cooking club or home-based pop-up meal. This is because California—like most other states—restricts individuals selling food to only two options: through commercial food facilities such as permitted restaurants and co-working kitchens that require licenses, insurance and space rental, or through the Cottage Food Act, which allows sales of some, mostly non-perishable foods, such as potato chips, preserves, and pies.
But that could change soon, thanks to the Homemade Food Operations Act (AB 626), which recently passed unanimously in the California legislature. Democratic Governor Jerry Brown signed it into law on September 18. Now, California’s Health and Safety Code will be amended to allow “Microenterprise Home Kitchen Operations,” starting January 1, 2019.
The legislation limits home kitchens to $50,000 in sales a year, and 60 individual meals a week. Food must be prepared, cooked, and served on the same day and picked up by the customer or delivered within a safe time period, and home kitchen operators will be required to obtain food manager training and certification. No indirect sales are allowed—customers must pick up the food from the cook, or the cook must deliver it directly to the customers. Home cooks will bear the cost of required written applications and annual inspections, to the tune of about $300 a year. The total cost to legally launch a Microenterprise Home Kitchen Operation is estimated at $800 a year, which would cover training and permitting, as well as liability insurance, which is recommended but not required.
The legislation also outlines rules for internet food-service intermediaries like AirDine and EatWith, which allow users to dine in local homes around the world—and Josephine, too.
Josephine’s founder, Matt Jorgensen, led the charge to pass the new law after unsuccessful attempts to work “in the gray area” of existing laws so that the home cooks on his platform could sell their food without fear of prosecution.
Before closing it down in early 2018, Jorgensen and his partners experimented with running Josephine as a tech startup, a social enterprise, and a private club. They consulted with local health departments to address their public health and safety concerns, but local regulators indicated their hands were tied due to state law. After a string of run-ins with state regulators and local health departments, including cease and desist letters from the City of Berkeley and Alameda County citing charges of “aiding and abetting illegal food sales,” it became clear that “legislation needed to be our focus,” says Jorgensen. “The timeline for political and cultural change is much longer than a tech startup investor’s timeline for ROI.” So he launched the COOK Alliance advocacy coalition to craft legislation and lobby for the Homemade Food Operations Act.
In California, food businesses are permitted and inspected by county or city health departments. But home kitchens aren’t eligible for permits and inspections unless they fall under the state’s highly restrictive Cottage Food Act. And many health inspectors aren’t convinced home kitchens can meet the strict standards that food facilities require. According to Matthai Chakko, public information officer for the City of Berkeley, “Food sanitation, food prep, and food storage are all big concerns, from an environmental health perspective. Restaurants, for instance, are required to have separate sinks for food and non-food uses. Home kitchens don’t always have this type of equipment.”
“Furthermore,” he says, “if people are conducting business out of their home and generating traffic, that neighborhood may not have been zoned for that.”
Jorgensen scoffs at the idea that home kitchens are not a sufficiently controllable environment for safe food preparation. “The irony is that we all eat out of our home kitchens all the time, and there is no health crisis.” He points out that the top sources of foodborne illness are contaminated third-party products like packaged spinach and improper food handling, which can lead to cross contamination—raw chicken coming in contact with salad greens, for instance.
In the first case, he says, “Contaminated products are a much bigger concern in a commercial-scale facility, because more people will become ill before anyone realizes the product is contaminated.” And in the case of improper food handling, “That is an issue of food safety training, rather than the facility itself.”
While Chakko says he is not aware of any foodborne illnesses related to home-cooked food sales in Berkeley, the safety concerns are far from unfounded. Overlooking even the most minor food handling procedure in a home kitchen can be deadly.
In 2016, 800 people were served a Thanksgiving meal by members of a community church in Antioch. Many of the dishes had been cooked at home. Within 24 hours, 19 of those people had fallen ill with symptoms of nausea, vomiting, and diarrhea. Three people later died. The source, identified as clostridium perfringens, is one of the most common causes of foodborne illnesses in the United States. It is associated with undercooked meats that have been left out for too long.
For context, it’s worth remembering that just one more person died in Antioch than in the worst known case in U.S. history, a 1993 E.coli outbreak linked to undercooked hamburger at 73 Jack-in-the-Box restaurants, which infected 732 people and killed killed four—all of them children.
The Homemade Food Operations Act aims to address these concerns by requiring permits and inspections that the home cooks must pay for, and by allowing city and county health departments to opt in to the new law if they wish. According to Jorgensen, San Francisco’s health department has expressed a desire to opt in. As for Berkeley, Chakko would not say how the local health department would react if and when the law goes into effect. “We take a neutral position on pending legislation. We would enforce any laws that are passed, but we don’t try to lobby or advocate either way.”
Beyond the public health concerns, there is resistance to the “Uberization” of the home-cooked food movement. “This bill was designed to benefit tech companies rather than home cooks,” says Christina Oatfield, policy director for Sustainable Economies Law Center in Oakland. “We are concerned because of what we have seen in other parts of the gig economy—with companies like Uber and TaskRabbit—and we are worried that some of those problems might arise in the food gig economy. It’s too early to say if there are specific problems with these platforms, but we know that Uber is notorious for manipulating their drivers into accepting rides that are not lucrative for the drivers.”
While nothing in the Homemade Food Operations legislation requires home cooks to use a third-party platform, she says, “If one or more of these platforms takes off, customers will expect the home cooks to be on the platform. And those who aren’t on the platform may be at a disadvantage, and might be pressured into using the app even if they don’t want to.”
Sustainable Economies Law Center has penned its own policy proposal, which would “require that ownership and governance of the web platforms designed to facilitate sales of homemade food lie within a community of stakeholders, not absentee investors.” These platforms could take the form of worker cooperatives, non-profit mutual benefit corporations, and non-profit public benefit corporations, but would not include platforms like Josephine.
Jorgensen counters that the Homemade Food Operations Act addresses these concerns by requiring data sharing and fee transparency by food-service intermediaries and by forbidding third-party food delivery. “This way, the home cook is their own sales person, working directly with their customers.”
Based on research of informal food marketplaces like Craigslist, Facebook Marketplace, and WeChat, Jorgensen estimates that at least 50,000 to 100,000 home cooks currently are selling food illegally in California. Mark Herbert, California director for Small Business Majority, a small business education and advocacy organization, says, “This legislation creates a legal framework so budding entrepreneurs can come out of the shadows. We think it is an exciting, innovative way to allow people in underserved communities to enter this market, and to leverage technology to create opportunities for themselves.”
A press release from Small Business Majority points out, “This measure would be particularly beneficial to women and people of color: groups that are starting businesses at remarkably high rates but often struggle to access funding and resources to get their businesses off the ground.”
According to a COOK Alliance poll, women make up 85 percent of the cooks in the informal food economy, while first-generation immigrants make up 30 percent. In addition, 48 percent are African, Hispanic, or of Multiracial Descent, and 35 percent have household incomes of less than $45,000 a year.
Some advocates for low-income food entrepreneurs are cautiously optimistic about the effect on the informal food economy. Emiliana Puyana is program manager for La Cocina, a San Francisco-based restaurant incubator that helps “hidden entrepreneurs” formalize their food businesses in a city where the cost of opening a restaurant ranges from $300,000 to more than $1 million, she says.
“In general, AB 626 is a good bill,” Puyana says. “But as much as I support it, it continues to perpetuate the idea of income patching. The restrictions around the law make it difficult for someone to earn a meaningful living that can significantly impact the communities where they serve food. I am excited that it passed, but I think our state and counties need to do more to find ways to reduce the barriers to entry into the food business … because the kinds of individuals who make the food that makes California the wonderful, diverse culinary state that it is are the kinds of individuals who find it harder and harder to start and formalize full-fledged food businesses.”
Even after the law goes into effect, home cooks in California can’t formalize their home-food businesses until they convince their local health departments to adopt the new legislation, because AB 626 allows cities and counties to decide for themselves whether or not to opt in.
Akshay Prabhu, founder of Foodnome, an online cooking community in Davis, will be on the front lines of his local lobbying effort. While studying neuroscience at UC Davis, he and a friend drew up a business plan to sell steamed buns with seasonal ingredients from a bicycle-powered food cart. But restrictive food truck rules in Davis made that impossible. He says regulations required a permit and a bathroom for any location where they parked for more than 10 minutes, defeating the purpose of the mobile-based business.
When that plan fell through, Prabhu, who recently graduated, started hosting pop-up dinners in his home and met others who wanted to “get into the cooking community.” Together, they created Foodnome, which revolves around “…fifteen or so cooks in and around Davis making meals and hosting dinner parties,” with participants pitching in to cover costs. Sometimes it’s a bring-your-favorite-topping pizza potluck. Other times it’s a salsa dancing class followed by tapas. Prabhu once hosted a chicken breakdown workshop followed by a roast chicken dinner.
In March of 2018, the Yolo County Health Department left a cease and desist notice on his door, and not long after, an off-duty health inspector showed up in his backyard after hours, Prabhu says. “Since then I’ve been trying to figure out a way to do this.”
He started doing research and found Jorgensen, who had by that time shut down Josephine and formed the COOK Alliance to change state policy on home-cooked food. “I got actively involved,” says Prabhu. “I catered a political rally last week, and I have been encouraging my friends and colleagues in the food community to call their senators.”
Prabhu says he plans to start pushing his local health department to adopt the Homemade Food Operations Act as soon as the governor signs it into law. “It won’t be enacted locally unless people in the community convince the county that there is enough support. The health inspectors are apprehensive because it’s an extra cost for them, and more health inspectors may be required.”
He is considering renting booths at local farmers’ markets to educate and organize local lovers of homemade food and says he is willing to assist the health department with the permitting process and monitoring of home cooks. If Yolo County adopts the new legislation, Foodnome can operate legally. Likewise, if the City of Berkeley opts in, retired grandmother Renée McGhee can resume the home-cooking business that she says pulled her out of depression and brought together a community of new friends and neighbors.
McGhee says if and when the new law takes effect in Berkeley, she will start cooking for her neighbors again. She believes third-party intermediaries are unnecessary, but she has nothing but praise for Josephine, which she describes as “a community of passionate people who help home cooks innovate and become self sufficient by offering an outlet for what we love to do through a creative business model.” And while she expresses some concern about unscrupulous third-party platforms taking advantage of home cooks like herself, she says, “If I ever thought there was any injustice, I would stop cooking for them.”