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Beverage Industry

R&D Tax Credits Available for Beverage Manufacturers

By Brenda O'Leary  Published On October 4, 2023

R&D TAX CREDIT IRELAND

Research & Development in the Beverage Industry

Introduced by the Irish government in 2004, the R&D tax credit incentive is designed to encourage innovation and global competitiveness by allowing companies to reclaim some of the money invested in qualifying research and development. 

Through Research and Development, innovative methods of brewing, crafting and distilling are generating opportunities for firms to remain competitive in the alcoholic drinks industry. Whether finding ways to increase efficiency, reduce alcohol content or discovering the perfect blend for that standout taste, R&D can help firms to develop their dominance in this industry. 

A line of glass bottles

Typical qualifying R&D activities for drinks manufacturers

Elimination of allergens and food additives

Experimentation with recipes using food science and testing to show scientific equivalence despite removal of additives or allergens.

Extending shelf life of goods or establishing extended shelf life in new products

Attempting to increase product shelf life whilst reducing the use of preservatives or changing the organoleptic profile of the food or drink in question. The company must have undertaken actual experimentation and not just simply removed a preservative and found that it worked ok. Some recipe reformulation work would be expected with external testing (or internal) as well.

Product development for specialist dietary requirements, low salt, sugar, etc.

Recipe reformulation using food science to achieve products that either do not contain gluten or meat or lactose or something similar.

Scalability

Issues associated with scalability: e.g., increasing from ‘one-off’ prototype to large volume manufacture.

Environmental improvements/sustainability

Improving environmental impact: e.g., reducing material usage, waste, emissions, energy consumption, etc.

Legislation

Complying and adapting to new legislation (reformulation for sugar tax for example). Investigating alternative chemicals or materials and integrating these within existing processes.

Resolving technical problems with production processes (e.g, seasonal variation in quality).

Undertaking in-depth research and experimentation to identify a matrix of knowledge as to how to vary the process for different seasonal variations.

Problems caused with variation in raw material quality, specification or strength

Like above, developing methodologies to be able to establish what raw materials can be used and establishing parameters that materials must fit within. Retaining the same look, taste and texture after changing ingredients or raw materials.

Component design

Development of complex geometry components for food manufacturing. Making products more durable, more effective, with improved performance, and / or efficiency Improving the environmental impact: e.g., reducing material usage, waste, emissions, and energy consumption.

Process improvement

Making the manufacturing process faster, more efficient, and safer through improvements to the underlying technology or the integration of components, machinery and / or processes. Undertaking investigations to prevent products deteriorating in transit. Developing new processing methods after the introduction of new equipment.

Possible activities that could qualify for R&D Tax Credits in Breweries

  • Elimination of artificial preservatives/additives
  • Investigation of new filtration methods
  • New Product Development: Trials with new raw materials (e.g. hops, barley, yeasts and sugars) & Trials with new production methods (new temperature regime)
  • Changing alcohol content of a product
  • Scale up to production of a new product
  • Extending shelf life of product
Some challenges companies face that force them to Innovate ​
  • Problems caused with variation in raw material quality/specification/strength
    Product/ingredient stability and performance (e.g., colourings, flavourings and additives,
    clouding)
  • Scale-up of batch processes
  • Poor shelf-life products
  • Poor production efficiency
  • Poor ingredient/ enzyme performance due to process changes

Possible activities that could qualify for R&D Tax Credits in Spirit Manufacturing

  • New yeast technology and cereal science
  • Pot and continuous still distillation including efficiency, flavour and toxicological studies in efforts to the control of ethyl carbamate formation in the distilled spirits.
  • Improving Process efficiencies and reduction of waste, not only in the primary production but also in the bottling and labelling
  • Investigation into the correct sweetness and mouth feel by experimenting with the fermenting and mashing
  • Distillation rate and its impact on flavour
Some challenges companies face that force them to Innovate
  • Problems with Yield, for example small changes in raw material input or distillation conditions can have a negative impact on yield in the process.
  • Plant commissioning problems.  A new plant is never plug and play, and requires an extensive period of commissioning to ensure that the plant operates to the specification outlined by the quality department.
  • Problems with quality and consistency of flavour, for example variations in the raw
    material input have significant impact on the overall product, yet the customer demand to recognise the taste, flavour and colour of a particular malt.

How Braithwaite can help you with your R&D Tax Credits claim

If any of the above applies to your business and your finance team could benefit from a personal review for R&D Tax Credits, please contact us today for a No Obligation Complimentary Assessment to identify less obvious activities and assess their eligibility for the Credit/Refund.

Get in touch with us to find out more: [email protected]


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