Question regarding Wisconsin Licensing / Registration

[Austin351]

I am making the "plunge" next season from a hobby producer, giving syrup to family / friends / co-workers to selling for ultimately a profit. Have been thinking over the past couple years how I have never really had any kind of a return on a hobby. Racing snowmobiles runs $500-$750 per weekend (assuming no breakage) , being a scuba diving Dive Master got me free air and some good pricing on gear but never actually made a nickel doing it. Motorcycle racing years ago was a complete drain on the checkbook. Happy I am out of hot rods as those really ate up the cash...

So... I am looking to lease / rent shelf space at some grocery stores in the midwest. They pay me for what is sold, not that they are buying syrup from me at wholesale and then selling for them. Wondering how the Wisconsin as well as USDA thinks of that?

Below is from the Dept of Agriculture / Trade / Consumer Protection website, per the Wisconsin Maple Syrup Producers Association. If I am not selling to the grocery store, rather leasing space for me to sell my product, how would this play out?

You do not need a license if:
You produce and sell your own maple syrup from any location directly to the end consumer. Regardless of whether or not you need a license, you are responsible for producing a wholesome safe product.

You need a registration if:
​You are selling maple syrup and/or concentrated sap to another processor for further processing, and your annual sales (between April 1 and March 31) are less than $5,000.

To register, fill out the Maple Sap Processor Registration form.

You need a food processor license with the department if any of the following apply:
You are selling maple sytrup and/or concentrated sap to another processor for further processing, and your annual sales (between April 1 and March 31) are more than $5,000.

​You obtain maple syrup from others for bottling, packaging, or processing.

You process your own or others’ maple syrup by adding color, flavors, or other ingredients.

You sell your bottled syrup to another business that will resell it.

You make your syrup into a food product, such as candy, maple cream, or another maple product.

If you need a food processor license, do one of the following:

Fill out this webform to start the licensing process (select "Food Processor" for the license type).

Contact DATCP by calling (608) 224-4923 or emailing datcpdfslicensing@wi.gov.

[Haynes Forest Products]

I'm thinking there is a question in your post. so I jump in. There are no rules in how you and your re seller decide to do business. I would recommend that you sell it to them at a price that is best for both of you. I also recommend that you don't front the syrup to them. If they want you to sell it on consignment I would negotiate a higher price than if they pay up front. They need to have skin in the game' plus any loss from theft or breakage is their loss.

[prairietapper]

what is the going rate in Wi. in a normal grocery store for pure syrup?
Down here there is Canadian Syrup on the shelf for 12~14 a qt. 7 a pint and 4 a half pint. I can see where if you are wood fired and running RO you might be willing to compete with that. But I sure would not want to.

[motowbrowne]

I'm thinking there is a question in your post. so I jump in. There are no rules in how you and your re seller decide to do business. I would recommend that you sell it to them at a price that is best for both of you. I also recommend that you don't front the syrup to them. If they want you to sell it on consignment I would negotiate a higher price than if they pay up front. They need to have skin in the game' plus any loss from theft or breakage is their loss.

I'm pretty sure the OP is asking if he can circumvent licensing requirements if rather than selling to the store (who then sells it to the consumer), he can "rent" a shelf at the store and then any syrup sold would be sold directly to the consumer from his rented property. Someone I know who sells honey recently suggested the same thing to me. He said that you need to get a bar code, which isn't cheap, and ideally you'd have your own display, but that stores are often interested in this type of arrangement. Personally, I think it's not a very good idea. Maybe I'm wrong and there's a good precedent out there, but if I had to guess, I think another producer who's either looking for retail markets or feeling the regulators breathing down his neck is gonna throw up a red flag.

About the price, prairietapper, around here I've seen quarts on the shelf at the store for everything from $15 to $27.

To the OP, the route I'd probably go to test the water without investing too heavily would be to buy a barrel of syrup from a licensed producer and a bunch of new decanters. Rent a licensed kitchen facility to bottle the syrup. If it sells well and you're making money, keep doing it and put the profits towards getting your own product saleable at that level. That's what I'd do anyway. The bulk price is pretty low. You could buy a barrel of whatever you want for $2.05-$2.10/# from any number of producers. Is little guys usually have more than that tied up into it by the time it's cooked. At those prices, there's a lot of room for the middle man. Of course it's the middle men who set the price, do there shouldn't be much surprise there...

[markcasper]

[QUOTE=Austin351;356615]

So... I am looking to lease / rent shelf space at some grocery stores in the midwest. They pay me for what is sold, not that they are buying syrup from me at wholesale and then selling for them. Wondering how the Wisconsin as well as USDA thinks of that?


You do not need a license if:
You produce and sell your own maple syrup from any location directly to the end consumer. Regardless of whether or not you need a license, you are responsible for producing a wholesome safe product.
[QUOTE=Austin351;356615]

You will not like my opinion in the matter, but you put it out here:

Notice that it says "You" sell your maple syrup from any location directly to the end consumer. Since the store will be handling the transaction and "you" will not be around, to me that would disqualify you from conducting this practice without a license.

At best it is a very shady gray area that you would be walking and you should get a the proper license and inspection. It looks as if you are attempting to get away without being licensed. No doubt if many people start doing this, there will be even more rules down the road. It may work for awhile until the bottom falls out. The same goes for those that buy equipment to lower the gross value to under $5,000. That too is a shady practice that is being done simply to get away without being licensed, involving more than one party. To me it is unethical and unfair to those that do follow the rules.

[Austin351]

Thanks for the responses. To be crystal clear, I am not trying to circumvent any rules / laws / requirements. I am simply trying to understand what registrations or licensing I need with this particular business case. If I choose to grow the business, so may the licenses / registrations.

Something that I didn't detail in my original post is that these are not chain grocery stores, they are all "mom and pop" businesses. There are no local (within hundreds of miles) syrup producers and they are far away from any interstate or tourist traps. I grew up in the area and know some of the store owners (or at least their parents that started the stores) Everyone needs a niche, I feel this mine.

Markcasper - Respectfully, I have to disagree with your statement: "The same goes for those that buy equipment to lower the gross value to under $5,000. That too is a shady practice that is being done simply to get away without being licensed, involving more than one party. To me it is unethical and unfair to those that do follow the rules." I'm sure you know the difference between net and gross sales so I'm not going down that road but, what you seem to imply is that if someone makes a business acquisition in equipment and identifies it as a business expense on taxes to lower their net income, that is unethical / unfair? Please correct me if I am wrong on what I think you are saying.

Motowbrowne - In these small town grocery stores, there is a respect and an understanding of how things should work, as opposed to how things may work elsewhere. I am sure you see the the differences between how things work between River Falls and Minneapolis. I would be selling myself first, with my brand second, not just a brand. Re-packaging would be out of the question.

I do have a full time job and have no intentions of giving that up. Just looking to make this hobby pay for itself.

[motowbrowne]

Thanks for the responses. To be crystal clear, I am not trying to circumvent any rules / laws / requirements. I am simply trying to understand what registrations or licensing I need with this particular business case. If I choose to grow the business, so may the licenses / registrations.

Something that I didn't detail in my original post is that these are not chain grocery stores, they are all "mom and pop" businesses. There are no local (within hundreds of miles) syrup producers and they are far away from any interstate or tourist traps. I grew up in the area and know some of the store owners (or at least their parents that started the stores) Everyone needs a niche, I feel this mine.

Markcasper - Respectfully, I have to disagree with your statement: "The same goes for those that buy equipment to lower the gross value to under $5,000. That too is a shady practice that is being done simply to get away without being licensed, involving more than one party. To me it is unethical and unfair to those that do follow the rules." I'm sure you know the difference between net and gross sales so I'm not going down that road but, what you seem to imply is that if someone makes a business acquisition in equipment and identifies it as a business expense on taxes to lower their net income, that is unethical / unfair? Please correct me if I am wrong on what I think you are saying.

Motowbrowne - In these small town grocery stores, there is a respect and an understanding of how things should work, as opposed to how things may work elsewhere. I am sure you see the the differences between how things work between River Falls and Minneapolis. I would be selling myself first, with my brand second, not just a brand. Re-packaging would be out of the question.

I do have a full time job and have no intentions of giving that up. Just looking to make this hobby pay for itself.

A few things I'll mention. I have seen plenty of stuff sold in the way you're referring too. Like the classic Lion's club mints at the checkout counter. Our hardware store has 3-4 displays like that, pickles, candy bars maybe, and so on. That said, I think you're doing the right thing being SURE that it's legit. Because if it's not, someone in Mark's position (I'm not by any means trying to say that you'd do this Mark, that's your business not mine) will call and draw attention to the practice. I know you said that there are no producers within hundreds of miles, but that's totally inaccurate. You may not know about them, but they're out there. Someone in Mark's shoes has to follow every letter of regulation on the books to get their syrup on the shelf. A guy like that has every right to be upset if they see someone doing what you're talking about, legal or not.

There are lots of guys trying to make a living doing this, or at least a part of their living. Being a small producer like you and me has advantages and disadvantages. We might only make 50-300 gallons a year, but we're allowed to bottle it and sell it with very few regulations. As long as it's directly to the consumer. To me that seems pretty fair. The guys who want to go big have to play by the rules, and that's their choice. But don't be surprised when they defend their turf.

We run into a similar situation as vegetable growers all the time. Someone with a full time job or a good pension wants to sell stuff at the farmer's market. Great, that's good for them. But then, since it's not really a business and they don't have any idea what their expenses are they will undercut the prices of those of us who depend on the income. If you want this hobby to pay for itself, I'd suggest putting an ad out to your friends on Facebook and let them know you've got great locally made syrup for sale. Flat rate shipping is pretty doable too for friends and relatives out of town. I wouldn't be surprised if you could sell 50 gallons that way pretty easily. Sales from that should cover your hobby expenses and then some.

But, if what you're talking about is a legitimate practice, then by all means, do whatever makes you happy. That's the beauty of this great nation, after all.

[jmayerl]

Simply put you will need.....

- state lisenced and inspected facility.

-FDA registration(they have been inspecting everyone separate from the state)

- business & product insurance

I will add that we sell to many grocery stores and distributors. The investment has been a lot of time and a lot of money. No stores food safety people will consider taking your product on unless you can show proof of having these.

[markcasper]

Markcasper - Respectfully, I have to disagree with your statement: "The same goes for those that buy equipment to lower the gross value to under $5,000. That too is a shady practice that is being done simply to get away without being licensed, involving more than one party. To me it is unethical and unfair to those that do follow the rules." I'm sure you know the difference between net and gross sales so I'm not going down that road but, what you seem to imply is that if someone makes a business acquisition in equipment and identifies it as a business expense on taxes to lower their net income, that is unethical / unfair? Please correct me if I am wrong on what I think you are saying.

You have brought issues into this that were never mentioned.....I never said or implied anything about the tax situation. Lowering your taxes that you owe is just good business sense as long as its legit. There are maple producers selling finished syrup to buyers that also sell equipment. The gross sales are then being deducted via the equipment purchases to get the value of the syrup to less than $5,000 to circumvent an inspection. Both parties are fully aware of what they are doing.

If you think you can do what your saying without an inspection, by all means go ahead, there is nobody stopping you. I am not a lawyer, but I practically guarantee you that one would be able to prove you in violation by attempting to do what you say. I still say you are walking on a bed of coals.

Remember....you put this out here for others to comment, good or bad. You are the one asking for advice.

[Austin351]

You have brought issues into this that were never mentioned.....I never said or implied anything about the tax situation. Lowering your taxes that you owe is just good business sense as long as its legit. There are maple producers selling finished syrup to buyers that also sell equipment. The gross sales are then being deducted via the equipment purchases to get the value of the syrup to less than $5,000 to circumvent an inspection. Both parties are fully aware of what they are doing.

If you think you can do what your saying without an inspection, by all means go ahead, there is nobody stopping you. I am not a lawyer, but I practically guarantee you that one would be able to prove you in violation by attempting to do what you say. I still say you are walking on a bed of coals.

Remember....you put this out here for others to comment, good or bad. You are the one asking for advice.

You are correct, I did put this out onto a forum for advice on how the state or fed's may interpret my plan / model. No where did I insinuate that I was trying to skirt the system.. There are grey areas here, there are grey areas in every regulation.