The frozen food industry faces steep competition in the U.S., and companies are always searching for the next new thing. Healthier, all-natural, and organic frozen meals abound in the supermarket’s freezer section, and plant-based protein entrees are gaining in popularity. All of these advancements require investments in research and development (R&D). If your company improves frozen food and novelties, or develops innovative technology to drive consumer engagement for its products, it may be eligible to claim the R&D Tax Credit. Companies can recoup costs associated with innovation by claiming federal and state tax incentives.
Employee wages, raw materials and supplies, cloud computing expenses, and third-party contractor costs associated with research and development activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.
Examples of qualifying activities:
- Improving the taste, texture, aroma profiles, and shelf life of existing frozen foods
- Experimenting with alternative recipes/formulations and packaging technologies to increase shelf life and flavor profile retention
- Developing food-delivery apps and websites for customers to order frozen goods
- Conducting nutritional analyses to detect nutritional properties
- Inventing and developing processing equipment to improve food quality or increase production efficiency (e.g. air blast, flash, or cryogenic freezing)
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Culinary Engineers
- Food Scientists
- Packaging Specialists
- Process Engineers
- Project Managers
- Refrigeration Specialists