Food subscription boxes are becoming more popular day by day. From meal kits to ready-to-eat food, to coffee and groceries, customers are now opting for subscription boxes.
Food subscription boxes offer convenience, ease, cost benefits, and many other benefits to customers, which explains their growing popularity and preference.
At the same time, customers expect nothing less than perfection in their food subscription boxes. From freshness to quality to data protection to compliance with legal regulations, there are a lot of considerations for food subscription boxes that businesses must consider.
In this blog, we focus on all that — from food safety regulations to shipping and packaging to insurance and supplier agreements. If you’re starting a food subscription box business, this is your go-to guide.
Let’s get started!
Regulatory framework for food subscription boxes
When it comes to food and safety, there are various aspects that need consideration. From packaging to labeling, license to permit, there’s a long checklist. Let’s look at some factors of the regulatory framework necessary for food subscription boxes.
Food safety regulations
The Food and Drug Administration (FDA) is responsible for assuring the safety of a food product, its wholesomeness, and proper labeling. Here are some of the key factors to consider:
- Food packaging: Packaging material that comes in contact with food can affect food quality. Hence, how you pack your subscription boxes is extremely important. Not only should the packaging prevent greasing and leakage, and preserve the freshness of food, it should not react chemically with food or harm it. The FDA food packaging analysis process analyzes toxicology of the material, etc.
- Labeling: Food labeling must include aspects such as ingredients, measurements, sources of ingredients, date of packaging and expiration, among other information. The FDA has its own definition of specific terms even though they are not defined by law and food businesses are required to follow those specifications.
- Handling: Another key factor is the handling of your subscription boxes. Delivery is a critical factor. When planning your subscription box business, ensure you have considered delivery partners that are equipped to deliver foods. For example, perishable food items may require temperature-controlled trucks.
Permits and licenses
Just like any other food business – a restaurant or food cart or a food manufacturing unit – food subscription box businesses require many permits and licenses. For instance, some of the basic permits and licenses required for food businesses are registration of business name, business license, certificate of occupancy, foodservice license, employer identification number, food handler’s permit, and building health permit, among others.
Subscription businesses must secure these permits and licenses before launching their business to avoid any penalties or lawsuits against them. Moreover, food businesses may also require sustainability certificates, organic food certificates, fair trade certificates, etc.
Product compliance and labeling requirements
While regulatory compliance, permits and licenses take care of the business aspect and legalities, the food you pack in your subscription boxes also requires you to follow a lot of rules and regulations. In this section, we look at regulations for ingredients, labeling, and packing and shipping factors for food safety.
Ingredient disclosure
Food allergies affect many people around the world. To ensure customers have access to information about food ingredients that may cause allergies, the FDA requires food companies to include a list of ingredients on the package labeling.
Labeling standards
Food brands are required to follow rules and regulations when it comes to labeling on food packages. Here are some of the rules and laws:
- Ingredient disclosure: Labels must include general information about ingredients. It should also have information about allergens and colors used. Alongside, it should also have the net quantity of each ingredient used. Apart from this general information, the label should also have information about nutrition claims such as nutrient content. Ingredient disclosure is required for customer safety and to build trust.
- Labeling standards: Every food package must have the most basic information on the labels. For instance, the name of the food, quantity of contents of the package, information about the ingredients, allergens, additives, color, etc. Other information required on the labels is serving size, how to prepare, packaging and expiry date, how to store, etc.
Packaging and shipping considerations
No matter how well-prepared, fresh, and high-quality the food in your subscription box, if it is not packaged or shipped in the right manner following the correct practices, it might harm your food subscription box business.
Packaging materials
When it comes to food safety and freshness, the other important factors to consider are the packaging material and shipping. The FDA has set rules and regulations for materials that come in contact with food content. Many packaging materials have benefits such as a prolonged shelf life, but they are harmful as they can be potential carriers of chemicals and toxins. The FDA has a list of approved materials, including plastics, paper, and other eco-friendly materials that can be used for food packaging.
Shipping regulations
Shipping is a critical factor for subscription box compliance. Food products that are perishable and have a short shelf life have to be shipped and transported correctly to keep the food quality and freshness intact. For instance, temperature-controlled delivery vans and storage facilities, and considering the transit time are a few of the factors to take into account.
Shipping long distances might also have stopovers, which would require suitable storage facilities for the subscription boxes. Apart from these, factors such as weather conditions and related solutions during shipping and delivery are key factors to be considered.
Liability and insurance coverage
Another key requirement for food subscription box business is liability and insurance coverage for the business. Businesses need to be prepared for any risks, unforeseen incidents, and events. Insurance not only protects businesses financially, but also helps to maintain business reputation. Let’s look at product liability and business insurance compliance practices for food subscription box businesses.
Product liability
When it comes to food, subscription brands should be extra cautious. Even though brands take all the necessary precautions, there may be unforeseen events and risks with the safety of the food. That’s where product liability insurance comes in. It gives subscription businesses the necessary insurance coverage to protect themselves when there’s an incident. Product liability insurance covers the cost of legal fees, compensation arising from customer claims, etc. Having this insurance in place can help subscription businesses avoid losses and safeguard their reputation.
Business insurance
Businesses require many different types of insurance in order to run their business. For instance, general business insurance, worker’s compensation insurance, professional liability, commercial property, cyber insurance, etc. Food subscription box businesses should particularly consider these insurance types: business owner’s insurance, spoilage insurance, food contamination insurance, business interruption insurance, general liability insurance, worker’s compensation insurance, equipment breakdown insurance, and cyber liability insurance, among others.
Contractual agreements and terms of service
Your food business is nothing without your suppliers, vendors, and customers. And you must consider contractual agreements and terms of service for these stakeholders. For instance, to ensure smooth functioning, you must engage into a formal agreement with vendors and suppliers. To build trust with customers, make them read the terms of service and ask them to sign an agreement. Let’s explore more of these factors:
Supplier agreements
Subscription box businesses often partner with third-party suppliers and vendors. For instance, vendors for ingredients, packaging boxes, shipping, storage, etc. Following legal considerations for food subscription boxes, follow best practices by entering into agreements with suppliers. You must consider clauses related to quality control, delivery terms, and indemnification.
Terms of service for customers
Just as your subscription business will sign contracts and agreements with vendors, your subscribers, too, may form agreements with you. Most times, these are digital agreements. Customers signing up for food subscription boxes may enter into long-term contracts with businesses and hence, it is in the best interest of the business and the customer to have a formal or semi-formal agreement between them. It is a good practice to lay out terms and conditions and get customers to read them before they sign up for the subscription box.
Handling customer data and privacy
Legal considerations for food subscription boxes also involve businesses following data protection regulations. Customers are often wary of sharing their personal details with online businesses due to concerns of data theft and misuse of their personal information. Food subscription businesses are required to follow data protection laws such as GDPR and CCPA, which help protect customer data from unauthorized access.
To ensure that your subscribers’ data always remains secure, you must follow good practices, such as letting customers know that their information is secure with you. This builds trust and loyalty.
Conclusion – Legal considerations for food subscription box
We’ve covered all important areas of legal consideration for food subscription box businesses. Starting a food subscription box business requires thoughtful deliberation of many factors. A great practice is to conduct thorough research of the regulatory requirements of starting a food business in your region.
To ensure you do not miss out on any important regulations, it is best to seek legal guidance from a professional entity. This will help you launch and safeguard your food subscription box business in the long run.
If you’re looking for a suitable subscription app that will help you follow all the previously mentioned practices for legal compliance and regulations, consider Appstle Subscriptions App for your Shopify business.
