FDA Food Labeling Exemptions Explained: What Small Businesses Need to Know
Over the years I’ve spent working with food manufacturers and producers, I’ve come to realize that the FDA’s rules for nutrition labeling are often confusing. A lot of people get tripped up on the rounding rules for the nutrition facts panel, others get confused about nutrient content claims, and some have trouble understanding label size requirements.
The one thing, however, that almost all food manufacturers struggle with is understanding the FDA food labeling exemptions. Not only have I seen a lot of confusion around the different types of exemptions and whether or not a specific company qualifies, I also see many mistakes when people fill out and submit the exemption notice form.
So, in hopes of helping you understand and successfully apply for a nutrition labeling exemption, I’m going to help you figure out whether or not your company qualifies for an exemption, walk you through filing the notice, and give you some helpful tips to make sure you do everything correctly.
Understanding the Types of Food Labeling Exemptions
Before we get into the nitty-gritty of how to apply for a nutrition labeling exemption, it’s important to differentiate between nutrition labeling exemptions for manufacturers and exemptions for producers. I’ve seen many food manufacturers get the two confused, so let’s make sure it is crystal clear.
The exemptions for food retailers apply only when that retailer has annual gross sales of $500,000 or less or annual gross food and supplement sales of $50,000 or less. In most cases, this exemption shouldn’t affect you, but it may if you intend to sell your product through such a retailer or are also a retailer yourself. In that case, it’s a good idea to check with a food labeling expert or to contact the FDA directly to ensure your product indeed does not need to be labeled.
The exemption that will affect you, however, is the “low-volume” product exemption. If you sell less than 100,000 units in a 12-month period and you have fewer than 10 full-time employees, then you qualify for this exemption. Unlike the exemption for food retailers, this exemption does require that you file a notice. The exception to this, however, is if you sell less than 10,000 units of your product annually and are not an importer. When you do exceed the 10,000 units or if you are an importer, you will need to file an exemption notice with the FDA.
Proceeding with a “Low-Volume” Food Labeling Exemption
If you do qualify for a nutrition labeling exemption, it’s time to submit your form. You may either do this electronically via your FDA account or by printing and mailing your form to the FDA.
Luckily, the form is not extensive, so it shouldn’t take you long to complete as long as you know what information is required. In addition to providing the name and contact information of your food company and identifying the type of company, (manufacturer, importer, etc.) the notice asks for the following information:
- The 12-month period you are claiming an exemption for.
- The average number of full-time employees for that 12-month period, including the owner.
- Note: You may use the following formula to determine the number of full-time employees: the number of hours of salary or wages paid divided by 2080.
- A report of the number of units sold.
- Note: If your business is new, provide an estimate of the units you expect to sell in the 12-month period. You may also include more than one product in one exemption form, so be sure to differentiate them in this section.
- The information for your distributor, importer, manufacturer, etc. if you have contracted out these services.
I always recommend using the FDA’s nutrition labeling exemption guidance to make sure you’ve filled everything out according to their standards.
Important Exemption Notice Considerations
Once you have filed your FDA food labeling exemptions notice, there are a few things you should know. First, an exemption notice must be filed annually in order for it to remain valid in the eyes of the FDA. I recommend setting a reminder for yourself about a month before your exemption expires so you can file another notice. The FDA doesn’t send out reminders notifying manufacturers when their exemptions are about to expire, so it is up to you to ensure it is filed in a timely fashion.
I also always make a point of telling food manufacturers to make a copy (or take a screenshot if submitting electronically) of your completed and submitted exemption notice and keep it somewhere safe. The FDA doesn’t notify manufacturers that they’ve received the exemption notice either, so you may need to provide proof of your exemption file if your notice doesn’t get processed for any reason.
Another thing you should be aware of is that the food labeling exemption only applies to the nutrition facts panel. You are still required to have certain mandatory information on your product package, including:
- A statement of identity (product name)
- The net quantity of package contents (the weight of your product before packaging)
- An ingredient statement/list
- The name, address, and contact information of the manufacturer, distributor, or packer
This information should, of course, comply with the FDA’s General Food Labeling Requirements. Note that if you do file an exemption notice, you are not permitted to make any nutrition claims on your product; all claims must be substantiated and accompanied by a nutrition facts panel.
The Nutrition Labeling Process
While being exempt from nutrition labeling can save you the money, effort, and time needed to create a nutrition facts panel, there are affordable, easy, and quick ways to obtain this information if and when you do need it. Online nutrition analysis software, like LabelCalc, allows you to make your own nutrition facts panels in mere minutes by simply creating an account and entering your recipe and serving size. In fact, once manufacturers discover this option, many choose not to file an exemption notice and instead provide nutrition information on their package to make their product seem more trustworthy and professional.
Ultimately, you have to make a decision based on what is best for your company and your consumers. There are undoubtedly benefits to labeling your product from the beginning. Not only will you be prepared for scaling up and increasing sales, but most retail stores only sell products with nutrition facts panels. What I’ve learned from working in this industry is that you just never know how quickly your product could take off—and if it does, it’s a good idea to be prepared.
At LabelCalc, we strive to make nutrition labeling as easy, affordable, and convenient as possible. To learn more about our user-friendly nutrition analysis software, contact us today.