FDA Reader
Simplifying Food Regulation

Blog

FDA Reader: Simplifying Food Regulation

Very Small Business Exemptions

Should I apply for a FSMA Exemption?

You should consider applying for a qualified facility exemption if you sell <$1mm of product per year

Several types of businesses are able to exempt themselves from major components of FSMA. The most common way to do this is by being a small business and applying for the “Qualified Facility” exemption. These “Qualified facilities” are subject to modified requirements (found in 117.201)


What is the Qualified Facility Exemption?

There are two paths that a business can take to apply for a qualified facility exemption. A business must satisfy the criteria of either path:

1st Path: “Very Small Business”

A “very small business” is one that produces less than $1 million (retail value) in product each year, averaged over 3 years. Included in this calculation is both product that is sold but also product that is made and not sold. For a business that exclusively holds food, the retail value of the food they hold must be less than $1 million per year.

2nd Path: Dual Criteria

  1. The average annual value of all food sold in the preceding 3 year period was less than $500,000

  2. Of your sales yearly value, at least half must have been sold to a “qualified end user”. A “qualified end user” must be:

  • An individual (not a business) or

  • A retail food establishment that is located in the same state as the manufacturer that is purchasing directly from the facility for sale directly to consumers.


What am I Exempt From?

If your business applies for the "Qualified Facility Exemption", then you are exempt from Subparts C and G. These two sections include comprehensive requirements related to record keeping and process control.  Small businesses will be delighted to avoid these provisions!

Here's what you can drop:

  • Subpart C - This section outlines the requirements for a food safety plan, a hazard analysis, and a recall plan. If you are exempt then you do not need to follow these requirements! See the FDA Reader Guide to Subpart C

  • Subpart G - Supply Chain Program. If you are exempt then you do not need to follow this section (although you should work with reputable suppliers. See the FDA Reader Guide to Subpart G


How do I Apply for an Exemption?

Check out our article on How to Apply for a Qualified Facility Exemption