In recent years within the food and drink industry, there has been an undeniable shift in the way business’s creative concoctions are viewed. Today, as consumers, we not only want products to taste good, but also need reassurance that they’re actually good for us, too.
So, to stand a fighting chance of competing against the giants in this Jamie Oliver generation, you need to make sure your food product or beverage has it all: taste, nutritional value and killer branding. Sounds easy right? Sure… if you’re a big business with bags of spare cash to throw at your development plan.
Luckily for smaller businesses, there are options, too! Getting your hands on tax credits via a research and development (R&D) claim will give you the incentive you might need to invest in the nutritional development of your product - whether this is an existing best-seller or the start of a brand new idea.
To do this right, let’s look at some qualifying nutritional development projects and how food and drink brands can add value to their products through R&D tax credits.
Reducing sugar content
The Soft Drinks Industry Levy (known to us regular folk as the sugar tax) was launched in 2018 and was designed to pressure drink companies into reducing the amount of sugar in their products.
While this new move was largely welcomed, small drinks businesses would have to take a big hit in order to change their recipes to meet the new guidelines. Thankfully, businesses could (and still can!) claim tax credits back for working on eliminating these nasties from their drinks while ensuring their products retained the same refreshing taste.
Not only does this type of development ensure the long-term sustainability of your business by meeting government regulations, but it also helps you to look after your beloved customers’ welfare.
Swapping artificial preservatives for natural alternatives
Another type of project that allows you to claim back R&D tax credits involves adapting your recipe in favour of natural ingredients as opposed to artificial alternatives.
In recent years, many drinks businesses have begun to adapt their products according to the latest consumer trends (yep - that’s right Mr Avocado, we’re talking about you).
A focus on ‘clean living’ has inspired the public to start watching what they put into their bodies - meaning that the demand for healthy food and drink has skyrocketed. Research and development tax credits are playing a key role in helping businesses discover how to use natural ingredients in their products - keeping brands relevant and their customers healthy and happy.
Developing allergy-friendly products
Creating healthy, Instagram-worthy food and drink products isn’t the only reason you should start to look into R&D within your business. Turning your attention to making your products available to be consumed by all is an inspiring way of tapping into a niche market.
For some, the very thought of having a nice cold pint at the weekend turns their stomach. And no, it’s not just because of a nightmare hangover whose lasting memory has kept them awake at night - it’s because of the ingredients lurking within.
Whether it’s gluten intolerance or alcohol flush your customers are trying to combat, by developing products that can be consumed by everyone through introducing gluten-free ingredients or reducing alcohol content, you could claim R&D tax credits back and help your business succeed.
When it comes to changing your existing drinks products in line with government guidelines or introducing new recipes to tap into an emerging market, it’s well worth investing in research and development to help your brand reach its full potential.
So, to find out if your food or drink brand is eligible to claim for R&D tax relief, get in touch with Lumo today and we’ll let you know whether you could claim tax credits on your latest innovation.