Food waste is, for various reasons, one of the main challenges that companies in the food industry are currently facing. Many businesses in this sector are heavily investing in the development of novel solutions and the improvement of manufacturing processes to reduce wastage.
Let’s explore how R&D tax credit relief can support food companies in reducing wastage, enabling them to recover a substantial portion of the costs associated with said projects.
Why is reducing waste critical for companies in the food sector?
It shouldn’t come as a surprise that reducing manufacturing wastage is one of the priorities for businesses in the food industry. From an economic standpoint, wastage represents a huge cost for food companies.
Looking at wastage from a different angle, consumers are increasingly demanding to stop food waste to protect the environment, putting pressure on businesses. With around 9.5 million tonnes of food going to waste every year, the UK is registering an increasing level of wastage produced per year, which is contributing to the overcrowding of landfill sites and becoming a reason of concern for the country.
On the bright side, food companies are developing innovative solutions to tackle food waste and improve the efficiency of their manufacturing processes.
How are food manufacturing companies responding to waste reduction during manufacturing processes?
Developing packaging able to extend the shelf life of food products has a significant impact on food wastage. There are various factors influencing food’s freshness: air, light, temperature, microorganisms, and enzymes just to name a few. When developing packaging, companies need to consider all of these factors and come up with solutions able to minimise their impact on food. The modification of atmosphere packaging and the use of barrier packaging are some common examples of ways to extend food shelf life.
However, packaging is not the only factor when it comes to tackling food waste. The implementation of tracking systems in manufacturing processes becomes crucial for companies to cut costs and reduce the environmental impact associated with their wastage. The Internet of Things is emerging as a very effective solution to reduce waste through the monitoring of raw materials and inventory.
With the integration of The Internet of Things in internal processes, food companies can track areas like stock and receive real-time data to guide orders of ingredients and supplies, avoiding unnecessary waste. Further, this technology offers other advantages in terms of tracking environmental factors, such as humidity and temperature in warehouses, ensuring optimal conditions for food.
How can R&D help food companies reduce waste?
With over £39 billion readily available from the UK Government, R&D tax credit relief presents an enormous opportunity for companies in the food industry. However, every year many eligible companies miss the opportunity to recover their costs through the incentive due to numerous misconceptions surrounding eligibility.
If we take the development of new packaging as an example, if the company is aiming to do something new/unique with the packaging, or improve the function/performance of existing packaging, and there is an element of trial error, it’s likely to be eligible for R&D relief. Many business owners believe the incentive is designed only for projects aiming to develop new-to-the-world products or solutions, but this is not the case.
The incentive extends to all the projects striving for innovation. Even if other competitors utilise packaging solutions similar to what a business is trying to develop, this could still be eligible; if the development processes for achieving something is not of the public domain and require an investment of time and money, it’s likely that the business is doing R&D!
We’ve only scratched the surface of innovation and R&D tax credits in the food sector; should you wish to learn more, or if you have any questions, feel free to get in touch.