R&D Tax Credit for Food and Beverage Companies

Last reviewed October 12, 2026

Food and beverage companies develop new products, reformulate existing ones, and scale production processes — activities that often involve genuine experimentation and technological uncertainty. These may qualify for the R&D tax credit.

What qualifies

Food and beverage R&D qualifies when it meets the four-part test. The credit covers activities where your team faces uncertainty about formulation, process, shelf stability, or production scale-up and resolves that uncertainty through systematic experimentation.

Common qualifying activities

Product formulation

• Developing new food or beverage products where flavor, texture, stability, or nutritional profile outcomes are uncertain
• Reformulating products to eliminate allergens, reduce sodium or sugar, or meet new dietary standards while maintaining taste and quality
• Experimenting with alternative ingredients (plant-based proteins, natural preservatives, alternative sweeteners) where product characteristics are uncertain
• Developing products for specific functional claims where achieving target levels requires testing

Process development

• Scaling production from test kitchen to full manufacturing where equipment, temperatures, pressures, or timing produce different results
• Developing cooking, mixing, or fermentation processes where parameters must be determined experimentally
• Adapting production lines to handle new product formats (different viscosities, particle sizes, or packaging requirements)
• Engineering continuous-flow processes to replace batch production while maintaining consistency

Shelf life and stability

• Testing preservation methods, packaging configurations, or modified atmosphere approaches where shelf-life outcomes are uncertain
• Developing processes to extend shelf life without artificial preservatives
• Evaluating ingredient interactions that affect product stability over time
• Accelerated aging studies to predict product behavior under distribution conditions

Quality and safety

• Developing detection methods for contaminants, allergens, or spoilage indicators
• Engineering pasteurization, sterilization, or high-pressure processing parameters for new products
• Developing HACCP-related processes for novel food products where hazard points are not established

Packaging

• Developing packaging solutions that interact with food products in uncertain ways (moisture barriers, oxygen scavenging, modified atmosphere)
• Engineering packaging for new product formats where structural or functional performance requires testing

What does not qualify

• Routine quality testing using established methods
• Producing existing products with no formulation or process changes
• Taste panels and market research (social sciences exclusion)
• Cosmetic changes to packaging with no technical challenge
• Routine regulatory compliance where the testing protocol is prescribed

Qualifying expenses

Food and beverage companies often have QREs across all three categories:

• Wages — food scientists, process engineers, quality engineers, and production staff involved in R&D
• Supplies — ingredients, raw materials, and test batches consumed during development (not production quantities)
• Contract research — outside laboratory testing, ingredient analysis, or process engineering

Related pages

• What Qualifies — the four-part test in detail
• Qualified Research Expenses — what expenses count
• Documentation Requirements — what records to keep
• Estimate your credit — free calculator

Frequently asked questions

Do food companies qualify for the R&D tax credit?

Yes. Food and beverage companies qualify when they develop new products, reformulate existing products, improve shelf life, develop new production techniques, or scale recipes from bench to production. The work must involve technological uncertainty beyond routine quality control.

Does recipe development qualify as R&D?

It can. Developing a new recipe qualifies when there is genuine technological uncertainty — for example, achieving a specific texture with alternative ingredients, maintaining flavor stability over a required shelf life, or scaling a formulation to commercial production while maintaining quality.

Do food safety improvements qualify?

They can, if the improvements involve technical experimentation. Developing a new pasteurization process, testing novel preservation methods, or engineering solutions to eliminate contamination risks through systematic evaluation of alternatives can qualify.