Supermarket Secrets - an intriguing insight into R&D in the food and drink sector

July 2017

We recently watched a fascinating programme on BBC1 about the way supermarkets in the UK compete for our cash. Supermarket Shopping Secrets, hosted by MasterChef presenter Greg Wallace, gave a real insight into the level of research and development undertaken by the retailers.

It appears that all the players, from the premium to the low-cost, are spending millions to make our food and drink safer, healthier and more convenient. Whilst some of this investment is required by regulation and Government initiatives the rest is commercially motivated.

Big bucks in burgers

big bucks in burgers - Fiscale Ltd

The burger market in the UK is worth a juicy £3 billion per year and we consume 800 million burgers a year, making them the nation's favourite junk food!

One of the programme features documented how frozen food retailer Iceland set about creating a healthier burger. Their mission was to reduce the level of salt whilst retaining the flavour using a secret ingredient. The team at the Iceland Experimental Kitchen were replacing the majority of the salt in the burger with Miso powder. Miso, made from fermented soy beans, gives a salty flavour without salt.

The burger produced in the Experimental Kitchen passed Greg's taste test but that was just the first step of the journey. As any food technologist knows taking your product from a prototype in the kitchen and scaling it up to a mass produced product that consumers will buy is fraught with uncertainty. Understanding the science behind food, getting the right mix of ingredients and the right production set up requires expertise and investment in equipment whether you are a household name like Iceland or a small independent artisan producer.

Who funds R&D in the food and drink sector?

According to a report issued by The Institute of Grocery Distribution (IGD) food and drink manufacturing is worth £96 billion and accounts for around 19% of UK manufacturing. The majority of the companies operating in the sector are SMEs and micro businesses. The Food and Drink Federation (FDF) believes that three quarters of the SMEs in the industry will be self-funding their R&D as they are unaware of the support that can be accessed through the Government. Cue R&D Tax Credits...

Time for change

Since the Small and Medium Enterprise (SME) R&D Tax Credits was introduced in 2000-01 to the 2014-15 financial year 39,360 different companies had made claims under the scheme. With just a fraction of the 5.4 million SMEs operating in the UK benefiting from the incentive it really is time for change.

Products, processes, packaging...

The food and drink sector plays a major role in our economy; innovation is fundamental to the success of the sector. That innovation can take many forms and spans products, processes and packaging.

Whether you are developing new or improved recipes, creating new strains of disease resistant grain, figuring out how to reduce sugar levels in fizzy drinks to avoid the Government's sugar tax or improving the sustainability of your packaging you are innovating. If what you are doing involves a degree of uncertainty then there is a high probability that you will be eligible for R&D Tax Credits.

The average first claim value of a typical client is £42,000 and it is tax-free. Imagine what you could do with that level of extra investment within your business? You could invest in new equipment, an additional member of staff or use it to fund further research and development. All you need to do is establish if you are eligible.

Operating in the Food and Drink sector and want to know if are eligible for R & D tax Credits?

If you do not know whether your business activities are eligible for R&D Tax Credits then please give us a call on 01440 708333 for a no obligation chat.

 

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