Starting a Cottage Food Business in the UK: What You Need to Know

The cottage food industry in the UK has grown significantly in recent years. Homemade jams, sourdough, chutneys, candles, bath products, and artisan confectionery are finding ready markets at farmers' markets, online platforms, and through word of mouth. The barriers to entry are genuinely low — but there are legal requirements that catch out many new sellers, and pricing mistakes that make the business unsustainable before it starts.

This guide covers what you actually need to know before you start selling food from home.

Do You Need a Licence to Sell Food from Home?

In England, Wales, and Scotland, you must register your food business with your local council at least 28 days before you start trading. This applies even if you are selling occasionally — a few times a year at a market counts. Registration is free and cannot be refused.

Registration is different from a licence. Most home food businesses register rather than applying for a formal licence. However, certain activities do require additional approvals:

• Selling meat products — requires an approved food establishment under EU-derived UK law in most cases
• Products containing alcohol — requires a personal licence
• Dairy products — raw milk sales are restricted; processed dairy requires additional approvals

For baked goods, preserves, confectionery, sourdough, candles, and soap — registration with your local authority is all that is typically required.

Food Hygiene Requirements

Registered food businesses are subject to inspection by their local Environmental Health Officer. Your home kitchen will be assessed on:

• Cleanliness and layout — separation of raw and ready-to-eat foods
• Pest control
• Temperature control where relevant
• Food safety management system — this does not need to be complex, but you need a documented approach
• Personal hygiene practices

The Safer Food Better Business pack from the Food Standards Agency is the standard tool UK home food businesses use. It is free to download and provides a ready-made food safety management system.

A Level 2 Award in Food Safety (available online for £20–£50) is strongly recommended before you start. It is not legally required for home producers in most cases, but it demonstrates competence to inspectors and gives you a solid foundation.

Labelling Requirements

Food labelling rules in the UK are specific and mandatory. Pre-packed food sold directly to consumers must include:

• Name of the food
• Ingredients list (in descending order of weight)
• Allergen information — the 14 major allergens must be clearly highlighted
• Net quantity
• Best before or use by date
• Any special storage conditions
• Name and address of the food business (your name and town is sufficient)
• Country of origin (for certain products)

Allergen labelling is the area where small food businesses most commonly fall foul of regulations. Every product containing any of the 14 allergens — gluten, dairy, eggs, nuts, sesame, soya, celery, mustard, fish, shellfish, molluscs, lupin, sulphites — must declare this prominently. Selling unlabelled food containing undeclared allergens has serious legal and safety consequences.

Pricing Your Products Correctly

The most common reason cottage food businesses fail is not competition or marketing — it is pricing. Most home food producers significantly undercharge, working effectively for below minimum wage without realising it.

The full cost of a homemade food product includes:

• Ingredients — at actual purchase price, not bulk estimate
• Energy — oven, hob, fridge running costs
• Your time — preparation, active cooking, cooling, packaging, labelling, selling
• Packaging — boxes, jars, bags, labels, tissue, stickers
• Overhead — market fees, vehicle costs, equipment depreciation, insurance, registration
• Platform fees — Etsy transaction fees, market commission if selling through an agent

Labour is consistently the most underestimated element. A loaf of sourdough that takes 90 minutes of active time to produce — at UK minimum wage — has £18.32 of labour in it before a grain of flour is counted. If you are selling that loaf for £8, you are paying to give it away.

The Tools That Make It Manageable

Running a small food business involves a surprising amount of calculation — ingredient costs per batch, cost per unit, pricing at different margin levels, tracking which products are profitable. Doing this accurately in your head or on scraps of paper leads to the pricing mistakes that end businesses.

For candle and soap makers, the same principle applies — wax weight, fragrance load, container cost, and labour per unit are all variables that need tracking per batch, not estimated once and forgotten.

Where to Sell

The main channels for UK cottage food businesses, with their respective advantages and costs:

• Farmers' markets and craft fairs — direct relationship with customers, immediate cash flow, good for testing what sells. Stall fees typically £30–£100 per day.
• Etsy — large audience for handmade products. Factor in 15–20% in fees on each sale. Good for shelf-stable products that can be posted.
• Farm shops and delis — wholesale relationships. Typically buy at 40–50% of your retail price. Requires a cost structure that supports this margin.
• Social media direct sales — Instagram and Facebook allow direct ordering. No platform fees, but requires consistent content and audience building.
• Local delivery — many cottage food businesses build profitable local subscription boxes and regular delivery rounds with minimal marketing costs.

Start with one channel and do it well before expanding. Trying to manage a farmers' market, Etsy shop, and wholesale account simultaneously before you have a production process that runs reliably is the fastest route to burnout.