Formulations, shelf-life & fermentation
Estimate your credit →Developing new formulations, extending shelf life, and engineering processing methods require systematic experimentation to meet sensory, safety, and nutritional targets.
The credit is calculated on qualified research expenses (QREs) — primarily wages for engineers and technical staff who spend time on qualifying activities, plus supplies, cloud/compute, and 65% of qualified contract research.
The table below lists the business components that most often qualify, a common example, and the technical uncertainty that makes each one defensible.
| Business component | Example | Technical uncertainty |
|---|---|---|
| New product formulation | New beverage or plant-based product | Will the formulation meet taste, texture, and nutrition targets? |
| Shelf-life & preservation | Clean-label preservation or barrier packaging | How to extend shelf life without compromising the product? |
| Fermentation & process development | New strain or fermentation process | Which conditions yield consistent output? |
| Reformulation / substitution | Sugar, sodium, or allergen reduction | Can we match the sensory profile with new ingredients? |
| Processing equipment & methods | New processing line or automation | Which parameters preserve quality at scale? |
| Packaging innovation | Sustainable or active packaging | Will it protect the product and meet regulatory limits? |
| Ag tech & crop science | Pest-resistant crop, precision irrigation | Will the approach improve yield or resilience? |
| Food safety & testing methods | New contamination-detection method | How to detect hazards faster and more reliably? |
Wages for time spent on qualified research may count toward your credit. Percentages depend on facts and must be documented.
Illustrative example using sample figures. Your actual credit depends on your facts; see Form 6765 and consult a tax professional.
The IRS requires qualifying research to satisfy four tests. Here's how they typically map for this industry:
The activity aims at improving a product, process, software, or technique used in the business — not just a business outcome.
The work relies on principles of engineering, computer science, biology, chemistry, or another hard science to resolve uncertainty.
There was genuine uncertainty at the outset about whether — or how — the component could be built or improved.
The team evaluated alternatives: A/B tests, prototypes, benchmarks, simulations, or iterative design-build-test cycles.
Most companies underestimate what they can claim. Our study covers every qualifying role, every component, and every year still open for amendment.
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