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The Spoon

Daily news and analysis about the food tech revolution

Josephine

Governor Brown Signs AB 626 Into Law, Opening Door to Home Based Food Businesses

After the California state senate unanimously passed the Homemade Food Operations Act (AB 626) at the end of August, the last step to making the bill into law was the signature of the state’s Governor, Jerry Brown.

Yesterday he provided just that.

With Brown’s signature, AB 626 makes it legal to start a home based food business in California. While it was always likely that Brown would sign the bill, it was not a foregone conclusion. The bill faced strong opposition from public health organizations who believe home based food businesses pose a potential health risk despite the safeguards built into the 626 in the form of home health inspections and permitting.

In the end, however, these voices of opposition weren’t enough to keep Brown from making AB 626 law.

The news is probably bittersweet for the founders of COOK Alliance, the advocacy organization which worked with lawmakers to shepherd 626 through the California state legislature.  The group was created by the founders of Josephine, which they shut down earlier this year in large part due to the difficulty of running a marketplace for home cooked meals in states like California where it wasn’t legal to do so.

And while it may be too late for Josephine, other entrepreneurs have been working on platforms to connect would-be home food entrepreneurs with hungry customers. One company, DishDivvy, launched their app this summer and is operating in California.

California Senate Greenlights Home Based Food Businesses With Passage of AB-626

This week marked an important milestone for aspiring chefs looking to build a home-based food business: the Homemade Food Operations Act (AB 626) was unanimously passed by the California state senate on Wednesday and will become law barring an unlikely objection by California governor Jerry Brown.

The new law will legalize the sale of home cooked food in California.  It’s an important step forward in making home cooked food the potentially next big sharing-economy opportunity following the rise of ridesharing and short term home stay marketplaces over the past decade.

As I wrote in June:

The reason this is interesting to me is a) California often leads the country when it comes to forward-leaning legislation and if AB 626 passes it could open the door for nationwide legalization and give a framework for home food entrepreneurs (also known as the ‘cottage food’ industry), and b) I think home cooking is the next big micro-entrepreneur space to open up, much like home sharing and ride sharing did over the past decade.

Just as with craft brewers, aspiring food entrepreneurs often get started in their own kitchens. With the passage of AB 626 in influential California, it’s easy to see how the cottage food business could act as a catalyst for bigger food businesses in the future. As we learned this week from Eric Rivera, home cooking businesses can be a gateway for future restaurant innovators and operators.

The passing of AB 626 is also a big win for the folks behind COOK Alliance, the organization formed by a cofounder of the now-defunct cottage food sharing platform Josephine. Former Josephine co-CEO and COOK Alliance founder Matt Jorgensen has made it his mission to advocate for the legalization of cottage food industry, in large part because he sees it as a significant economic opportunity for low-income populations without any startup capital other than a home kitchen and cooking know-how.

From Jorgensen’s own blog post in July:

We believe home cooking helps build healthy, resilient communities and create economic opportunities for the people that need them most. Outdated food codes criminalize informal homemade food sellers, resulting in fines and misdemeanors for entrepreneurs who are most typically low-income women, immigrants, and people of color.

From here the bill goes to the desk of Governor Jerry Brown and once passed, home cooks with permits can start selling food to their hungry neighbors.

Yes, The Cottage Food Market Might Be Uberized, But That’s Not A Bad Thing

Most fresh food made at home (outside of canned and baked goods) is illegal to sell commercially in many states, including California.  Because of this, some in California have been working on creating momentum for a bill called the 2018 Homemade Food Operations Act (AB 626) in hopes that it will pass through the California legislature this year and become law.

The reason this is interesting to me is a) California often leads the country when it comes to forward-leaning legislation and if AB 626 passes it could open the door for nationwide legalization and give a framework for home food entrepreneurs (also known as the ‘cottage food’ industry), and b) I think home cooking is the next big micro-entrepreneur space to open up, much like home sharing and ride sharing did over the past decade.

While you’d think most would be on board, not everyone is. As can be seen from this excerpt from a guest column in the LA Times by Christina Oatfield, policy director of the Sustainable Economies Law Center in Oakland, some see a darker side to AB 626:

If AB 626 becomes law, the homemade food market would likely become dominated by big companies like Airbnb and Uber. The trajectory of these businesses is rapid growth fueled by venture capital and aimed at disrupting and then monopolizing a market. They disregard important public safety laws and worker protections by treating the workers as independent contractors. They could easily overwhelm the homemade food economy just as they have ride hailing, delivery services and vacation rentals.

Oatfield, who once operated an underground kitchen out of her apartment, seems to believe that once big platform players like Airbnb or Uber get involved in the market, they will inevitably treat home food workers as commodities and take outsized commissions from home cooks when listing their goods on their marketplaces.

While I think it’s good to be suspicious of any large platform player, I’d suggest Oatfield’s suspicion is overblown. Not only are the public safety concerns she lists specifically addressed by a compliance framework for home cooks within the proposed legislation, but I also wonder where her suspicions about the shadowy forces behind AB 626 come from. As far as I can tell, the primary advocates for AB 626 and legalization of cottage food businesses have been the C.O.O.K Alliance, a group founded by the same people who started Josephine, a now-defunct startup lauded universally for the way they treated the cooks on their platform.

And even if Uber or Airbnb did eventually swoop into the home meal sharing market with a platform and charge 15% fees, I would say this: so what? As long as legislation requires that food safety is the paramount concern, I do not doubt that an online marketplace like an “Airbnb for home cooks” would likely open up much more market opportunity than many small food entrepreneurs would otherwise have.

I’ll never forget when I met a woman named Majda, a former Josephine home cook, who told me about her dream of opening a home-based food business so she could retire from her day job at a casino. You see, Majda had trouble standing all day at her casino job and with Josephine, she had the beginnings of what seemed to be a flourishing home food business that would give her greater control over her time and allow her to stay at home. Or at least she did until Washington State forced Josephine to shut down.

While Majda probably would have liked to not pay any transaction fees to Josephine, my guess is that she probably had a much better shot at building a home food business with a platform that matched buyers of home food with home cooks like herself. Now she doesn’t have any way to reach her consumers other than through underground sales of her food.

So, does the cottage food industry need to guard against aggressive tactics by platform providers? Yes, of course. But just as with ride sharing, home sharing, and creator marketplaces, opportunities like this need platforms to match the sellers with the buyers. These platforms need to be built by companies with resources and experience building communities and marketplaces. Without them, the opportunities will never arrive and, as a result, the Madjas of the world will never have a chance to chase their dreams.

Bottom line: the home cook market will have the best chance of flourishing with the combination of a strong legal framework that ensures  both the consumer and entrepreneur’s interests are protected and a platform that brings together buyers with sellers. We’ve all seen the market building power of platforms – whether it’s those made for digital creators like Patreon, artisanal crafters like Etsy or, yes, gig economy workers like Uber – and the lesson learned is these platforms help to create markets that would otherwise stay dormant without them.

Josephine, The Uber for Home Cooking, Shuts Down

Josephine, the startup that gave home cooks a platform to sell their own food, is shutting down. According to a Medium post by Josephine CEO Charley Wang, the last date for meals on the platform will be March 30.

From that post:

We knew that Josephine was an ambitious idea from day one and, as you all know, there have been many highs and lows over the years. At this point, our team has simply run out of the resources to continue to drive the legislative change, business innovation, and broader cultural shift needed to build Josephine.

The company had faced legal ups and downs as the service rolled out across the country as so-called cottage food laws are a patchwork nationally, varying from state to state.

Josephine scored a victory last year when the California Health Committee voted yes to send the “2017 Homemade Food Act (AB 626)” on to the state house, though it looks like the bill is still being amended. But Washington state was slow to create a pilot program for cottage food sales, forcing Josephine to shut down operations there this past December.

The Spoon’s own Mike Wolf was a fan of Josephine (and the peach cobbler he ordered through it). As he wrote earlier:

“Because of the win-win nature of Uber models, it was only a matter of time before they ended up in the home kitchen. Not only are companies aspiring to give grannies and wannabe chefs a way to share their home cooking, but large appliance companies are beginning to explore ways to enable buyers of their products to share them via an Uber-like marketplace.”

But strict regulations are not always bad, especially when it comes to making sure the kitchen making your clam chowder is a clean one. Josephine had raised more than $2 million from Kapor Capital and angel investors. From Josephine’s post, it sounds like the company couldn’t find more money to get over the hurdle where buying someone’s home cooked meal went from weird to a new normal.

And while Josephine is shutting its doors, there are others still searching for that perfect pairing of home cooking and the sharing economy. One such company is Feastly, which matches hungry diners with chefs who serve meals in their own homes. Pull Up A Seat is a service similar to Josephine that fashions itself as the ‘Etsy for home cooks’. Then there’s Eatwith and Mealsharing, both Airbnb-like marketplaces for home cooks to sell ‘meal experiences’ to travelers. And finally, there’s Airbnb itself, where some enterprising hosts are using the company’s “experiences” platform to offer home-cooked food.

So don’t give up yet. Perhaps there’s still a chance for you to find that delicious peach cobbler from someone in your own neighborhood or on the other side of the world.

Josephine, The ‘Uber for Home Cooks’, Suspends Operations In Washington State

Josephine, a platform that allows cooks to sell home made meals, is suspending operations in Washington state on December 22nd.

The suspension, which was announced via email to Josephine customers within the state, is the result of Washington’s Department of Health dragging their feet on creating a pilot program for cottage food sales, a necessary step for the state to develop a regulatory framework for the sales of home cooked meals through platforms like Josephine.  Company cofounder Matthew Jorgensen also indicated that a ‘letter of concern’ from local health regulators has prompted inquiries from other Washington agencies.

On one hand, it makes sense that health regulators would want to regulate the sale of home cooked meals. No one wants to eat at a restaurant that has a rat problem, and the same goes for food cooked in the home. Foodborne illnesses are not fun.

One the other hand, this is a bummer because the a) I’ve ordered some really tasty food with Josephine and b) the suspension of the home food marketplace takes away a platform that allows home cooks to become budding entrepreneurs.

Take Majda. I had a chance to order a meal from her last spring and it was delicious. (Seriously folks, if you live in Washington and want the best peach cobbler you’ve ever tasted, remember Majda if and when Josephine gets going again). When I picked up my food from Majda’s home, I sat down and talked to her about why she cooked for Josephine. She told me she had always liked to cook, and that she saw Josephine as a potential new career for her, one that would eventually allow her to leave her day job.

Basically much in the way Uber created opportunities for tens of thousands of budding entrepreneurs by allowing them to drive people around for money, Josephine allows those with a kitchen and a little cooking ability to pursue a new way to pay the bills.

In his letter, Jorgensen said that Washington State is the only state where they are currently experiencing problems (the company has found a more receptive audience among state legislators in California, where a cottage food bill was passed earlier this year). He also indicated they plan to eventually resume operations in Washington state and asked customers to send a letter to Governor and Secretary of Health.

You can read the entirety of the letter from Jorgensen below:

Hi Michael,

I hope you’re well. Today, I have a regulatory update to share that includes some unfortunate news for our community. Due to regulatory pressure, we will be temporarily suspending all Josephine operations and platform sales in Washington State starting on December 22nd. We know that this decision greatly impacts many people, including you and other Josephine customers in Washington, so we want to explain why we are taking this course of action and how you can help us resume operations. 

Although we’ve been engaged in a state-level “Home Cooking Task Force” since August, the Washington State Department of Health still hasn’t determined if/when they plan to move forward with a proposed pilot program, which would test a regulatory framework for cooks who use our platform and other means to sell safe home-cooked meals. In the meantime, a letter of concern from local health regulators has prompted inquiries from other state agencies. We believe our decision to pause operations is in the best interest of members of our cook community. 

We also believe that there is a real opportunity in this unfortunate circumstance to elevate the voices of our community. Share your own story to encourage officials in Washington to consider expediting a formal pilot program or food code update to allow Josephine to continue operating in 2018. Like other sharing economy companies that have had to temporarily suspend their operations (e.g. Lyft, Airbnb), we hope to demonstrate the unique impact of our business in support of a case for change. 

Hearing from you is how we’ll make changes happen! Please consider: 

If you want to encourage your network to take action, please share: actnow.io/washingtoncooks 

We know that the impact of this news varies for each of our Cooks and we are here to be as personally supportive as possible. If you have any questions or comments, please don’t hesitate to reply directly to this email. Thank you for your support— we will continue to fight for a future where talented home cooks can both legally and safely share meals with their neighbors. 

With care,

Matt

***

Synopsis: 

  • Josephine will be totally suspending operations in Washington State on December 22nd, but will work closely with you to push aggressively to resume operations in 2018
  • We believe this is our best opportunity to push for an expedited pilot process 

FAQ: 

What does “totally suspending operations” mean? 

Cooks in Washington State will no longer be able to publish or accept payment for any meals using the Josephine platform. Cooks and Customers will still be able to access their accounts to view historical data including meals and orders. 

What will happen to my Josephine credit? 

Please use your remaining Josephine credit (from promotions or refunds) before 12/22. After 12/22 this credit will be frozen until we resume operations in Washington. If you purchased credit in our recent holiday promotion, we will refund your credit card for the purchase.

When will Josephine resume operations in Washington? 

We will resume operations as soon as we can reach an agreement with regulators. Our goal is to advocate for a pilot program or food code update that reflects this new type of peer-economy activity. 

Why can’t Cooks keep using Josephine to manage their Food Truck, CFO, or Catering business? 

Our legal and advisory team believe that completely suspending operations is in the best interest of our cook community as we continue to push for a regulatory framework that works in Washington.  

Is Josephine changing its operations in other States? 

At this time, we are not encountering these types of regulatory issues in other States, and therefore do not expect to change our operations elsewhere. 

What can I do to help? 

Please send a message like this to your network. Public support is our most powerful tool for advocating for change. 

Hi there,

You may have heard that Josephine—the private network for home cooked meals— has been advised to temporarily suspend Washington operations for regulatory reasons. I’d love to keep buying home cooked food for my family and am really hoping the situation changes quickly. 

The Josephine folks are pushing hard for food code changes in Washington and hearing from all of us is super important. If you have a moment to send an email to the Governor and/or share a story about why home cooking matters please go to actnow.io/washingtoncooks. 

Thank you again for your support— I hope to see you again soon! 

California Health Committee Approves Homemade Food Act, Further Opening Door For Cottage Food Platforms

Yesterday I wrote about a piece of legislation before the California Assembly’s Health Committee, the “2017 Homemade Food Act (AB 626)”.

After yesterday’s vote, it looks like California may be on its way to allowing entrepreneurial home cooks to start selling their food to neighbors, opening the door to “Uber for Home Cooking” platforms like Josephine.

The 15 member Health Committee saw 12 yes votes and zero no votes (there were three no responses), voting the bill out of committee on a bipartisan basis. The bill is on track for a summertime vote by the full legislature, and if the bill passes a house vote, it would mean Josephine could resume operations in the Bay Area by this summer.

Nationally, Josephine is pursuing similar efforts in other states to have local legislatures reevaluate antiquated cottage industry food laws that restrict home cooks from selling their food as a business. Some states – such as Wyoming – have very permissive laws, while others are similar or more restrictive than California’s.

I think home cook sharing economy platforms make sense. As I wrote yesterday:

“Just as how Uber, Airbnb and other sharing economy platforms gave entrepreneurial folks a marketplace to rent their underutilized assets – whether that be a car, apartment or a person’s own time and labor – it’s logical that there’d also be demand to do so with home cooked food. In fact, it would be hard to argue there isn’t a large potential market of people on both sides of the equation – those who can cook and need to make some extra money, and those who like to eat – to make a marketplace like Josephine successful in the long run.”

Josephine Looks To Change Cottage Food Laws In Effort To Expand Home Cooking Marketplace

Today’s a big day for Josephine, the startup behind the ‘cottage food’ sharing platform and marketplace that enable home cooks to sell food to their neighbors.

That’s because today is the day a bill is being considered by the Health Committee of the California state legislature called the 2017 CA Homemade Food Operations Act (edit: the bills name was changed to “AB 626—The 2017 Homemade Food Act” in the form it went before the committee). The bill, which Josephine management helped craft and introduce, would expand California’s current cottage food law to allow aspiring home-based food entrepreneurs to sell home cooked meals to neighbors.

(Ed Update: The bill passed out of assembly on April 25th. You can read our story here). 

That’s naturally of interest to Josephine, which has built a platform which can more or less be described as an “Uber for cottage food” (although it should be noted the company resists the negative connotations associated with platforms like Uber). The problem for Josephine, which is based in Oakland, is that the sale of home cooked meals to neighbors is not allowed under current California law. As a result, about a year ago home cooks using Josephine received cease and desist letters, which eventually led the company to shutting down operations in the east Bay area.

The company, which has investments of about $2 million from Kapor Capital and angel investors, believes home cooks with the proper licensing should be able to sell food to their neighbors. And why not? Just as how Uber, Airbnb and other sharing economy platforms gave entrepreneurial folks a marketplace to rent their underutilized assets – whether that be a car, apartment or a person’s own time and labor – it’s logical that there’d also be demand to do so with home cooked food. In fact, it would be hard to argue there isn’t a large potential market of people on both sides of the equation – those who can cook and need to make some extra money, and those who like to eat – to make a marketplace like Josephine successful in the long run.

I caught up with Josephine cofounder Matt Jorgensen to ask him about Josephine’s efforts to change California’s cottage food law and also get a little backstory about Josephine.
You can keep up with the status of Josephine’s efforts and the California Homemade Food Operations Act at their blog.

When was Josephine forced to halt operations?

Jorgensen: In April of 2016, several of our cooks were served Cease and Desist warnings from local health regulators, which lead us to halt operations in the East Bay. This ultimately led to our good faith collaborations with State health regulatory coalitions in CA

With the Homemade Food Operations Act (Editor Note: Bill name was changed to “The 2017 Homemade Food Act:), when is a vote expected on this bill?

First the Bill must pass through Health Committee next Tuesday April 25th, and we expect the legislature to vote at some point in the early summer.

How does California compare to other states in terms of legality around cottage food as a business?

Jorgensen: California is essentially on par with the 30+ states that have passed Cottage Food laws.

Like many states, certain California cooks with the access and means can apply for cottage food permits as hobbyists, but the law doesn’t allow for the sale of most financially viable/ culturally relevant products… instead it’s focused on certain shelf-stable foods (jams, granolas etc). So we haven’t seen CA yet push beyond others in terms of the available food types. Several states go further, with Wyoming’s “Food Freedom” law being the most open.

Do you see this bill as the first in a push towards national rolllout? (And will other states follow suit)?

Jorgensen: We’re taking a different advocacy approach in each state– while we’re supporting Garcia’s legislation in CA, we’re actually looking at various administrative paths in other states. In Portland for example, we have strong support letter from the Mayor for a proposed pilot program. In other states like Wyoming the low-risk behaviors we are proposing are already legal.

How does Josephine business work? Is it similar to other sharing economy services that take a % of the overall bill? Charge a flat service fee?

Jorgensen: There’s no cost to set up a cook account or post meals. For each meal cooks serve, they keep 90% of your total sales and 10% of your sales will go toward covering credit card fees and the cost of our services. We also partner with values aligned non-profits for no cost.

How does Josephine find new cooks?

Jorgensen: Mostly through word of mouth and through offline communities. Many cooks are already partaking in the types of activities we support before choosing to partner with Josephine.

How does Josephine ensure people are going to be quality cooks? I assume getting a “cottage cook” license (as permitted by the bill) would be one step. But are there other things you do?

All cooks go through a vetting process from the masters of public health on our team and have access to our knowledge base before posting their first meal. We work with them to ensure a quality first experience, but all meals are also reviewed by customers (built-in accountability).

Is Josephine the only cottage cooking platform app, and if so why hasn’t this market taken off (is it legal restrictions, or something more as well).

Jorgensen: Some other companies have tried to make this business work, but we believe we are still in the early days of building the cook confidence and public trust necessary for this business to succeed.

How big is Josephine and what is your funding?

Jorgensen: We have a few hundred cooks across the country, a staff of 10 in Oakland, CA, and funding from a handful of different impact, angel, and venture capital investors. We’ve raised a little over $2m so far from angel and impact investors including Kapor Capital.