FDA nutrition labeling: when a small food maker needs a Nutrition Facts panel

When FDA nutrition labeling applies to a small food maker

The federal rule is simple to state: packaged foods and dietary supplements must carry nutrition labeling unless they qualify for an exemption. The Nutrition Facts panel is the box that lists serving size, calories and nutrients. Every exemption in FDA's nutrition labeling rule then carves out a group of foods or sellers, and almost all of them carry the same condition: the food carries no nutrition claims or other nutrition information on the label, in labeling or in advertising.

For a small food business, three groups of exemptions matter most. The sales exemption covers small sellers that sell to consumers. The low-volume exemption covers products that sell in small numbers, made by a business with few employees. The product-type exemptions cover foods such as tiny packages and food made and sold in the same shop. The table lists the ones a small maker is most likely to use.

Each exemption is lost as soon as the label, a sign or an ad makes a nutrition claim. Words such as low fat, high protein or sugar free, or a partial list of nutrients, bring the full Nutrition Facts requirement back.

The small business nutrition labeling exemption based on sales

The sales exemption is aimed at small businesses that sell directly to consumers, such as a bakery counter or a market stall. It has two tests, and passing either one is enough: annual gross sales of not more than $500,000, or annual gross sales of food to consumers of not more than $50,000. FDA's Food Labeling Guide sets out the result in a chart, and a business is not exempt only with $50,001 or more in food sales and $500,001 or more in total sales.

Sales are measured over time, not in a single good month. FDA counts the most recent 2-year average of business activity. A new business that has sold for less than that period uses a forecast instead: reasonable estimates must show that annual sales will not exceed the limits.

There is nothing to file for this exemption. FDA's guide says each company keeps its own records, such as tax returns, and FDA will not maintain them. Keep the records that show your sales in case a buyer, an inspector or a retailer asks.

Example: a candle and jam shop sells mostly candles, and its jam is a small share of total sales. If the jam sales stay within the food limit, the jam is exempt even if total shop sales are above the total limit, as long as the jars make no nutrition claims.

The low-volume exemption for products that sell in small numbers

A maker that does not meet the sales test can still look at the low-volume exemption. The low-volume exemption looks at each product and at the size of the business instead. It applies to a business with fewer than an average of 100 full-time equivalent employees when the product has fewer than 100,000 units of the product sold in the United States in a 12-month period. FDA adds that low-volume products that carry nutrition claims do not qualify.

Three definitions decide the count. A unit is the package, or the form the food is sold in if there is no package. The business is the business together with all its domestic and foreign affiliates, so a sister company's staff count too. Full-time equivalent employees are paid hours divided by 2,080 hours of work a year, so part-time staff add up.

The exemption runs product by product. One product can be exempt while a best seller from the same kitchen needs a Nutrition Facts panel. If a product outgrows the limits during the year, the business has 18 months from the date the product stopped qualifying to add a compliant label.

How to file the FDA small business nutrition labeling exemption notice

The notice applies only to the low-volume exemption. Businesses using the sales test file nothing, and a business that is not an importer with fewer than 10 full-time equivalent employees, for a business that is not an importer files nothing for a product with annual sales of fewer than 10,000 total units of the product.

1. Check each product against the limits

   Count units sold in the United States over the period FDA uses and your average full-time equivalent staff, including affiliates. Each product needs fewer than 100,000 units of the product sold in the United States in a 12-month period.

2. Gather what the notice asks for

   The notice lists your name, address and a contact, the names of the food products, including brand names, the maker or importer if different, the average number of full-time equivalent employees, counting affiliates, and the approximate number of units sold in the United States in the preceding 12-month period.

3. File before the period starts

   FDA accepts the notice through a web-based submission process for the annual notice, or by mail or fax, using FDA's model form. It must be filed before the start of the period the exemption is claimed for, and it must be signed by a responsible individual who can certify the information.

4. Renew every year

   The low-volume exemption needs a notice filed with FDA every year. FDA says eligible firms get an electronic reminder when it is time to resubmit. In the signed notice, the business also states that the business will notify FDA if its staff or unit sales go over the limits.

How to make a Nutrition Facts label

Once a product needs a panel, the work is finding the nutrient values and laying them out in FDA's format. FDA does not pre-approve labels for food products, so the maker carries the result.

1. Fix the recipe and the serving size

   Nutrient values only hold if the recipe and package size stay the same. By law, serving sizes must be based on amounts people actually eat, so pick the serving size from FDA's reference amounts, not from what you think a portion should be.

2. Get nutrient values from a lab or a database

   FDA does not set one method: there is no prohibition on using average values from databases. If you use a database, validate database calculations by comparing them with laboratory analyses. FDA does not approve or recommend specific laboratories, so choose a lab yourself.

3. Do not copy another product's panel

   FDA's guide warns that a competitor's data is not assured to be valid for another product. Recipes, ingredient suppliers and moisture differ, and the numbers on the panel must match your own product.

4. Lay out the panel in the current format

   Use the format FDA adopted in 2016, with the nutrients in the required order and the current Daily Value footnote. Label software can format the panel, but the company is responsible for the accuracy and compliance of the label.

5. Keep the data behind each number

   FDA checks a label by testing a composite of 12 units of the product. Keep your lab reports or database calculations so you can show where each value came from.

FDA nutrition facts label requirements for the panel itself

The current Nutrition Facts panel dates from the update FDA made in 2016. Smaller makers had until January 1, 2021, for manufacturers with less than $10 million in annual food sales to switch, so any label printed today must use the updated format.

The panel must list added sugars, in grams and as percent Daily Value. For vitamins and minerals, vitamin D and potassium are required, and calcium and iron are still required. Vitamins A and C are no longer required, but can be listed voluntarily. The footnote explains percent Daily Value and states that 2,000 calories a day is used for general nutrition advice.

Package size changes the layout. Some packages that could be eaten in one sitting or several need dual-column labels showing both per serving and per package amounts. Very small packages and private label products have their own rules: for private label food, the company whose name is on the label provides the nutrition information.

What the exemption does not cover

An exempt product still needs the rest of a food label. FDA's guide states that the exemptions apply only to nutrition labeling, not to other labeling rules. The other required parts of the label, such as the ingredient list and allergen statement, still apply, and the food label guide linked below covers them.

State and local rules also apply. Cottage food laws, which let people sell some foods made at home, are state laws and can set their own label wording. Rules vary by state and city, so check with your state agriculture or health department. This page is general information about the federal rule, not legal advice.

Where Nation fits

Questions about FDA nutrition labeling and the small business exemption