Your salsa sells out at every farmers market. A regional grocery chain wants to carry it — and then the buyer asks for your Nutrition Facts panel, your allergen statement, and your facility registration. That jar that looked perfect on a folding table now has to survive federal labeling law, and a label that gets it wrong is not just embarrassing: under the Federal Food, Drug, and Cosmetic Act, a misbranded food is illegal to sell, and retailers will pull it rather than risk an FDA warning letter landing on their shelves too.
The good news is that the rules are knowable, and small producers get real breaks. Here is what has to be on your package, which exemptions you can actually claim, and the mistakes that cost small food businesses the most.
The Five Things Every Packaged Food Label Must Carry
FDA rules (21 CFR Part 101) require five elements on essentially every packaged food sold at retail. Think of them as two on the front and three on the back or side.
1. Statement of identity — on the front
This is the common or usual name of the food: "tomato salsa," "oatmeal raisin cookies," "cold-pressed apple juice." It goes on the principal display panel (PDP) — the part of the package most likely to be seen at purchase — in bold, prominent type. A fanciful brand name alone does not satisfy this. "Grandma June's Midnight Magic" is a brand; the statement of identity underneath it still has to say what the food actually is.
2. Net quantity of contents — on the front
How much food is in the package, stated in both U.S. customary and metric units ("NET WT 16 OZ (1 LB) 454 g"). It sits on the PDP in the bottom 30 percent of the panel, in a type size tied to the size of the panel. Count declarations ("12 cookies") are allowed alongside weight, but almost never instead of it. Short-weighting — declaring more than is actually in the package — is one of the oldest enforcement traps in the book.
3. Ingredient list — with allergens declared
Every ingredient in descending order of predominance by weight, using common or usual names. If your salsa is mostly tomatoes, tomatoes lead the list. Sub-ingredients of multi-component ingredients generally must be broken out in parentheses.
Woven into this list is the allergen declaration. Federal law names nine major food allergens — milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans, and sesame — and each must be declared in plain language. You can do it in the ingredient list itself ("whey (milk)") or in a separate "Contains" statement ("Contains: Milk, Soy"). Two details trip up small producers:
- Sesame counts now. The FASTER Act added sesame as the ninth major allergen effective January 2023, so "spices" or "natural flavor" can no longer hide it.
- Use the common name. Listing "casein" or "whey" without flagging milk, or "lecithin" without flagging soy, violates the rule — the allergen must be recognizable to an ordinary shopper.
4. Name and place of business
The name and address of the manufacturer, packer, or distributor. If you use a co-packer and put your own company name on the label, you must qualify it with "Manufactured for" or "Distributed by" so the label does not misrepresent who made the food. A street address can be omitted only if the business is listed in a current phone directory or similar public listing — most small brands just print the full address.
5. Nutrition Facts panel — unless you are exempt
The familiar black-and-white panel with serving size, calories, nutrients, and percent Daily Values. The format most shoppers know today comes from the 2016 overhaul: larger calorie counts, realistic serving sizes, "Added Sugars" as its own line, and updated Daily Values. If your panel still looks like the pre-2016 version, it is out of date.
For many small producers, though, this fifth element is optional. That is where the exemptions come in.
The Small-Business Exemptions From Nutrition Labeling
The exemption rules live in 21 CFR 101.9(j), and they offer three doors. Walk through any one of them and you may skip the Nutrition Facts panel — but read the fine print, because each door has a different lock.
Door 1: Small total business (no filing required)
If your business has annual gross sales of $500,000 or less — total sales, not just food — you are exempt, no matter how much of that is food. No notice to FDA, no paperwork. This covers most farmers-market vendors, cottage operations scaling into wholesale, and early-stage brands.
Door 2: Small direct-to-consumer food sales (no filing required)
If your retail food sales directly to consumers are $50,000 or less per year, you are exempt even if your overall business is larger. This door matters for businesses whose revenue is mostly non-food or wholesale but that sell a little packaged food on the side.
Door 3: Low-volume product (filing required)
If neither of the first two fits, a specific product is still exempt when the business employs fewer than 100 full-time-equivalent employees AND sells fewer than 100,000 units of that product per year in the United States. Unlike the first two doors, this one requires you to file an annual notice with FDA claiming the exemption — the one exception being businesses with fewer than 10 full-time employees and fewer than 10,000 units sold, which are excused from the filing.
What kills the exemption
All three doors slam shut the moment your label, labeling, or advertising carries any nutrient content claim, health claim, or other nutrition information. Print "low sodium," "good source of fiber," "sugar free," or even a heart-health claim anywhere — on the package, your website, or the shelf talker — and the product needs a full Nutrition Facts panel. Small brands lose their exemption this way constantly: the marketing copy outruns the compliance review.
What the exemption does not cover
This is the most misunderstood part. The small-business exemption excuses only the Nutrition Facts panel. The other four elements — statement of identity, net quantity, ingredient list with allergen declaration, and name and place of business — apply to you at any size, from your very first unit. There is no "too small to list ingredients."
Two related details worth knowing:
- Outgrow the thresholds and you get 18 months. Once you exceed 100,000 units or 100 employees, you have 18 months to add Nutrition Facts — a grace period, not a pass.
- Tiny packages get their own rule. If the total surface available for labeling is under 12 square inches, you may print an address or phone number where consumers can obtain nutrition information instead of the full panel — again, only if you make no nutrient claims.
Common Labeling Mistakes That Snare Small Food Businesses
Claiming "healthy," "natural," or nutrient content without meeting the definitions. Nutrient content claims ("low fat," "high fiber") have precise regulatory definitions with minimums and thresholds. "Healthy" now has an updated FDA definition tied to food-group equivalents and limits on saturated fat, sodium, and added sugars. If you cannot substantiate the numbers, leave the claim off — and remember that adding one forfeits your Nutrition Facts exemption.
Hiding allergens in collective terms. "Spices," "flavoring," and "coloring" are permitted collective names for many ingredients, but they must never conceal a major allergen. Sesame hiding in "spices" is now a violation, full stop.
Ingredient order errors. Ingredients must descend by weight as formulated. Reformulate to cut sugar and the order may need to change — labels must be re-verified with every recipe change, not just at launch.
Net quantity in the wrong place or type size. The front-panel placement and minimum type sizes are exact requirements, not suggestions. Designers who have never done food packaging routinely shrink or relocate the net weight for aesthetics.
Forgetting state and local layers. FDA rules are the federal floor. Cottage food laws, state registration, farmers-market permits, and weights-and-measures inspections each add requirements, and some states demand additional label statements. Selling across state lines also triggers FDA facility registration for most food businesses.
Treating the website as separate from the label. FDA treats your product web page, social posts, and advertising as "labeling." A claim made only on Instagram still counts for exemption purposes and still must be truthful and substantiated.
Track the Numbers That Protect Your Exemption
Here is where bookkeeping quietly becomes a compliance function. Your exemption status turns on figures you should already be tracking: annual gross sales (the $500,000 test), direct-to-consumer food sales (the $50,000 test), units sold per product per year (the 100,000-unit test), and full-time-equivalent headcount. If a retail buyer's compliance questionnaire — or an FDA investigator — asks how you qualify, "we're pretty sure we're small" is not an answer. Separate your food revenue from non-food revenue, track unit sales by SKU rather than only by dollar, and keep payroll records that support your FTE count.
Good records also smooth the transition when you outgrow an exemption. Brands that can pinpoint the month they crossed a threshold get their full 18-month runway; brands that discover it during due diligence for a retail contract end up rush-ordering label redesigns and lab analyses.
Simplify Your Financial Management
As you scale from market stall to retail shelf, maintaining clear financial records — revenue by channel, units by product, costs by batch — is what keeps both your taxes and your FDA exemption status defensible. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in. Get started for free and see why developers and finance professionals are switching to plain-text accounting.
