The food and beverage industry, which encompasses everything from restaurants to bakeries, breweries, distilleries, and soft beverage producers, to commercial kitchens and food producers, is an exciting, diverse, and highly innovative industry. For companies in this space, claiming SR&ED tax credits presents a unique opportunity. Many do not consider filing SR&ED for food and beverage innovations because they do not believe or even know that they qualify.
While it is true that simply altering or developing recipes in and of itself does not constitute SR&ED, many commercial manufacturers, restaurants, bakeries, and breweries do have eligible projects and expenses to claim. Businesses in these sectors invest heavily in research and development to make their products stay fresher longer, or contain non-standard ingredients (such as gluten-free, dairy-free, vegan, or allergen-free products) as a way to get ahead of their competition. Companies may also test automation technologies, new bottling processes, or improvements to packaging efficiency and design to stay competitive.
Consumers are becoming increasingly aware of how their product choices affect the world around them and their health long term. This means that there are massive opportunities for companies that support sustainable and “green” initiatives, as well as those who are interested in producing items showcasing alternative ingredients for consumers who prefer vegetarian, vegan, gluten-free, or ketogenic diets.
Simply developing a “unique” product isn’t enough. Success in claiming SR&ED for such work requires being able to demonstrate and describe your work in terms the CRA requires. Your claim needs to describe how your product development process is non-standard or less than standard in some way, how the experimental process either produced the results you were looking for or failed to do so and why.
Did your company:
- Develop new products or recipes using non-standard ingredients or process methods, and/or packaging
- Experiment to improve the shelf life and longevity and stability of existing or new products
- Experiment to increase nutrient factors (i.e.: protein, certain vitamins) or decrease certain other components (i.e.: sodium, sugar, carbs)
- Alter processes, packaging, storage requirements, or ingredients to improve food safety
- Produce samples for sensory evaluation
- Experiment to improve the speed of production processes while maintaining consistent product quality
- Experiment with scaling up production
- Attempt methods to reduce food waste
- Worked to meet myriad regulations (Health Canada, the FDA, HACCP, etc.)
…you may be eligible to receive up to a 35% refundable tax credit to offset any corporate taxes owed when applying with qualifying person-hours and wasted material expenses.
Is your company producing oat milk that heats well and foams up for cappuccinos but doesn’t compromise on taste?
Are you a bakery trying to make a gluten-free hot dog bun that bakes up light and fluffy but doesn’t fall apart for celiac sufferers?
Is your brewery experimenting with new bottling processes for kombucha or preserving the scoby for longer periods of time?
We would love to talk about your food and beverage projects!
“When it comes to the Food Services Industry, SRED Unlimited knows how to sort the strongest claimable activities from a year’s worth of projects. The SRED Unlimited team shows expertise in the areas of food science and mechanical engineering, and I can always count on them to deliver good results.”
~Cucina Foods
Even companies who don’t work directly with food items but are looking to increase food security, diminish ongoing supply chain issues for fresh food and produce, or reduce food waste may have SR&ED-eligible projects! Contact us for a free consultation and our team of experienced food and beverage consultants will be happy to have a confidential discussion on how we can submit your SR&ED application.
SR&ED tax credits can be a crucial part of your successful financial future and overall financial success strategy. By not applying for SR&ED, you could miss out on thousands of dollars in tax credits. We can save you many billing and productivity hours by doing the leg work of the application preparation process for you. You need the expertise of SRED Unlimited to maximize the tax credits to which you are entitled to for your valuable work.
