FDA small business nutrition label exemption

21 CFR 101.9(j) states two different ways a food can be exempt from nutrition labeling. One is for a person who sells directly to consumers and stays within the $500,000 or $50,000 gross-sales tests. The other is for a low-volume product of a business with fewer than 100 full-time equivalent employees and fewer than 100,000 units of that product. Either exemption is lost when the food carries a nutrition claim or other nutrition information. This page quotes those paragraphs. It is not a determination that a particular food qualifies.

Text below is from the current eCFR page for 21 CFR 101.9. If you are building a label anyway, the label maker formats a draft Nutrition Facts panel.

Direct sales to consumers, 21 CFR 101.9(j)(1)

Food offered for sale by a person who makes direct sales to consumers (for example, a retailer) is exempt when annual gross sales made or business done in sales to consumers is not more than $500,000, or annual gross sales made or business done in sales of food to consumers is not more than $50,000. The regulation’s condition is that the food bears no nutrition claims or other nutrition information in any context on the label or in labeling or advertising. Claims or other nutrition information subject the food to section 101.9.

Low-volume products, 21 CFR 101.9(j)(18)

Paragraph (j)(18)(ii) says that, for food products other than the 1995–1997 phased products in (j)(18)(i), the product is eligible for an exemption for any 12-month period if, for the preceding 12 months, the person claiming the exemption employed fewer than an average of 100 full-time equivalent employees and fewer than 100,000 units of that product were sold in the United States. If the product was not sold in the preceding 12 months, fewer than 100,000 units must be reasonably anticipated to be sold in the United States during the period for which the exemption is claimed.

The opening of (j)(18) also requires that the labels, labeling, and advertising do not provide nutrition information or make a nutrient content or health claim, and that a notice is filed before the beginning of the period, except as (j)(18)(iv) provides.

Paragraph (j)(18)(iv) says the notice goes to the Office of Nutrition and Food Labeling (HFS-800), Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740. It lists the person’s name and address, the food products, the manufacturer if different, the number of full-time equivalent employees, the approximate units sold, and a signed certification. The same paragraph says that if the person is not an importer and has fewer than 10 full-time equivalent employees, that person does not have to file a notice for any food product with annual sales of fewer than 10,000 total units.

Paragraph (j)(18)(vi)(D) determines full-time equivalent employees by dividing the total number of hours of salary or wages paid directly to employees of the person and of all of its affiliates by 2,080 hours (40 hours × 52 weeks). Paragraph (j)(18)(iv)(D) uses that same 2,080-hour year for the average reported in the notice.

If, during the exemption, the employee count or the number of units sold exceeds the applicable number, (j)(18)(iii) gives 18 months from the date the product was no longer qualified as a low-volume product of a small business to comply.

Paragraph (j)(18)(i) states older thresholds (fewer than 300 full-time equivalent employees and 400,000 units, then fewer than 200 and 200,000) only for the periods 8 May 1995–7 May 1996 and 8 May 1996–7 May 1997. Current claims use (j)(18)(ii).

Questions

Who can use the $500,000 or $50,000 exemption?

21 CFR 101.9(j)(1) covers food offered for sale by a person who makes direct sales to consumers, for example a retailer, whose annual gross sales to consumers are not more than $500,000, or whose annual gross sales of food to consumers are not more than $50,000. The food must bear no nutrition claims or other nutrition information in any context on the label or in labeling or advertising.

What is the low-volume small-business test?

21 CFR 101.9(j)(18)(ii) makes a food eligible for any 12-month period if, for the preceding 12 months, the person claiming the exemption employed fewer than an average of 100 full-time equivalent employees and fewer than 100,000 units of that product were sold in the United States. A product not sold in that preceding period can qualify when fewer than 100,000 units are reasonably anticipated to be sold during the claim period.

When is a notice required?

Section 101.9(j)(18) requires a notice filed before the period for which the exemption is claimed, with the information in paragraph (j)(18)(iv). A person who is not an importer and has fewer than 10 full-time equivalent employees does not have to file a notice for any food product with annual sales of fewer than 10,000 total units. A nutrient content claim, a health claim, or other nutrition information removes the exemption.

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