Food and Beverage Industry

The food and beverage industries have made great advances in various areas over the last several years. These areas include new and improved products, a variety of dietary options, product packing development to improve both the qualify and prolong shelf life, new and improved manufacturing processes related to limiting food contamination and bifurcating food production for allergies.

So the big question is what can a company in the food and/or beverage expect to receive as a credit? Well there are many variables that dictate the amount of credit a company may receive. In most cases, the head count and salaries related to both the technical and support employees that contribute to the development effort typically drive the amount of credit. The technical and support backgrounds may include the following, but are not limited to: food scientist, chemists, processing and engineering, nutritionists, sensory analyst, master brewers, and mixologist. Given the varying amounts of head counts and salaries that could exist in any company and to help simply the answer to the question above, below are some of the latest statistics provided by the IRS for companies in the food and beverage industry that claimed Federal R&D Tax Credits:

Industry                                  # of Clients Filed               Avg. Credits

Food manufacturing                          234                                     $106,684

Beverage and tobacco product         22                                       $21,113

• New or improved product development related to formulations, ingredients and recipes
• Packaging and bottling development (e.g., eco-friendly, recycling, increase shelf life)
• New and improved manufacturing processes related to efficiencies and product redesign
• The cost of supplies used in batch, barrel or prototype testing of new or improved formulations
• Sensory testing (supplies used in testing and/or 3rd party costs performing the tests)
• Software development activities related to e-commerce, logistics, and/or the manufacturing process