The Scientific Research and Experimental Development (SR&ED) tax credit is a valuable financing resource for Canadian firms, but SR&ED for the food and beverage industry is commonly overlooked by companies who don’t believe their work qualifies. The name itself can be misleading, as it implies work must be done in a lab by scientists, and commercialized products are excluded. The food and beverage industry is constantly innovating to more effectively and efficiently make their products and deliver them to customers.
The food and beverage industry across Canada is thriving – Ontario is the 3rd largest food cluster in North America, with over 100 craft beer breweries in the province and the established wine region in Niagara; Atlantic Canada is internationally recognized for the quality and innovation of their seafood industry; and British Columbia is rated in the top five worldwide for its greenhouse vegetables industry, which is both high tech and highly successful. The industry is constantly innovating, and there are a few types of projects that companies can claim SR&ED credits on.
Developing new products and recipes
If your company is experimenting with using a new combination of ingredients or discovering new ways to make your food products more nutritious and delicious, you are likely conducting experimental development work. The use of new natural ingredients continues to be a major focus for food and beverage companies. Extensive experimentation can be required to develop effective recipes and processes that utilize these new raw materials. One example is if a company is attempting to develop a line of frozen pastries that, when thawed, wouldn’t experience a reduction in quality and taste.
Improving shelf life and durability of products
Being able to properly transport and increase the shelf life of products is a key challenge for companies looking to increase profits, and it can lower prices for consumers as well. As a result, there is significant experimental development work being performed related to innovative packaging solutions. Improving shelf life of products, while at the same time reducing the use of stabilizers and preservatives, is a primary example of work that may be eligible for SR&ED. One key instance is for meals that need to be mass produced and shipped long distances without the use of a refrigerated truck.
Improving food safety checks and processes
Food safety is one of the most highly regulated aspects of the food and beverage industry. It can often require significant technological advancement related to automation, cleaning processes and isolating processes from the manufacturing environment.
At BeneFACT, we help eligible food and beverage companies uncover, claim and maximize their SR&ED tax credits. Our reputation, knowledge and successful track record are widely recognized by our food & beverage clients and the Canada Revenue Agency. To learn more, call us toll free at 1-855-TAX-BACK (829-2225).