As part of the Food and Drug Administration (FDA) Food Safety Modernization Act, FDA is making a concerted effort to register any business that qualifies as a food facility. Under FSMA, food facilities are subject to FDA regulation and inspections. If annual human food sales are less than $1 million annually, adjusted for inflation, the business would qualify as a very small business.” These businesses would gain extra time for compliance and ease of regulatory burdens.
The Retail Bakers of America is helping shed light on this issue to help bakeries know whether they need to register. The answer is in the FDA regulations. Here is the pertinent section from the FDA website.
Guidance for Industry: Questions and Answers Regarding Food Facility Registration (Fifth Edition). Who is Exempt from Registration?
10. Retail Food Establishments:
10.1
Q: Does a warehouse club that sells to both consumers and businesses need to be registered?
A: A warehouse club is exempt from registration as a retail food establishment if it sells food products directly to consumers as its primary function. A retail food establishment's primary function is to sell food directly to consumers if the annual monetary value of sales of food products directly to consumers exceeds the annual monetary value of sales of food products to all other buyers. Businesses are not considered consumers. Thus, if the annual monetary value of sales of food products directly to businesses exceeds the annual monetary value of sales of food products to consumers, the warehouse club must register (21 CFR 1.227(b)).
10.2
Q: If a supermarket has a bakery on the premises that bakes bread and sells it to other stores in the same chain, is the supermarket required to be registered?
A: The supermarket is exempt from registration as a retail food establishment (21 CFR 1.227(b)(11)) if its primary function is to sell food products directly to consumers from the supermarket. As explained in Question C.19 in this guidance, a retail food establishment's primary function is to sell food directly to consumers if the annual monetary value of sales of all food products directly to consumers exceeds the annual monetary value of sales of food products to all other buyers.
10.3
Q: Are retail food establishment storerooms, distribution centers, or warehouses considered "holding facilities" that are required to be registered?
A: If a facility is a "retail food establishment" under 21 CFR 1.226(c) and 1.227(b)(11), storerooms for the retail food establishment that are co-located with, and thus, part of, the retail food establishment, are not required to be registered. However, a distribution center or warehouse that is not at the same general physical location as the retail food establishment does not meet the definition of "retail food establishment" (21 CFR 1.227(b)(11)) because it does not sell food from the facility directly to consumers. Thus, the distribution centers and warehouses are required to be registered.
10.4
Q: If a retail food reaches its shelf life and is stored at the retail facility pending return to the manufacturing facility, does the retail store become a holding facility that must be registered?
A: No. The retail food establishment does not become a holding facility. This is considered a normal business practice of a retail food establishment.
10.5
Q: If a bakery primarily sells its food directly to consumers, but 40% of its annual sales are to wholesale facilities, does the bakery have to be registered?
A: No. The bakery is a retail food establishment and does not need to be registered. A "retail food establishment" is exempt from registration if the annual monetary value of sales of food products directly to consumers exceeds the annual monetary value of sales of food products to all other buyers (21 CFR 1.226(c) and 1.227(b)(11)).
Businesses that do not meet the definition of a retail business according to the FDA guidelines must register as a food facility by December 31 of this year. It is a violation of Federal Law not to register. The registration is valid for two years.
Businesses may register at www.access.fda.gov.
Bakeries need to manage their sales mix and structure with FSMA in mind. If a bakery is wholesaling more than they are retailing, the bakery must either increase their retailing or decrease their wholesaling to avoid registering in the future as a food facility. In addition, if the bakery or bakery owner has a subsidiary (1) that is wholesaling, (2) that fails to meet the retail/wholesale mix requirements outlined above and (3) that is not included in a qualified retail/wholesale sales mix of the bakery, it would appear that the subsidiary would need to register as a food facility with the FDA.
