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? |
Food scientists vary culture temperature, pH, and barrier packaging in pilot batches to find a shelf-life approach that preserves safety and texture. Comparing results may qualify if the outcome was technically uncertain.
Scaling a proven recipe as written, recurring food-safety checks, and ordinary seasonal crop monitoring generally are not qualified experimentation. Grant-funded projects require review of who bears the research risk and retains rights.
Find your own job titles below. Each row shows the wage category a role usually falls under and the kinds of work that typically do and do not count. Titles alone never make wages eligible; the activity must meet the four-part test.
7 of 7 roles shown
| Role | What they do | Wage category | Typically qualifies | Typically does not |
|---|---|---|---|---|
| Tests recipes and processing methods against measurable technical requirements. | Direct research | Shelf-life formulation experiments, Stability and texture trials +1 more | Consumer preference surveys, Routine recipe duplication +1 more | |
Typically qualifies
Typically does not
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| Develops a workable production method for new products. | Direct research | Experimental thermal-processing methods, Pilot-line parameter trials +1 more | Routine batch operation, Standard sanitation +1 more | |
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Typically does not
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| Tests how packaging protects a product during storage and transport. | Direct research | Barrier-material experiments, Seal-integrity development +1 more | Label artwork, Known packaging substitutions +1 more | |
Typically qualifies
Typically does not
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| Runs controlled trials to resolve crop and growing-process questions. | Direct research | Comparative agronomic experiments, Uncertain growing-process development +1 more | Routine crop monitoring, Standard field operations +1 more | |
Typically qualifies
Typically does not
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| Prepares trial batches and records experimental measurements. | Direct support | Producing experimental samples, Measuring trial outcomes +1 more | Commercial production, Routine quality checks +1 more | |
Typically qualifies
Typically does not
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| Runs tests that help resolve a development team's technical questions. | Direct support | Experimental validation measurements, Trial-specific test preparation +1 more | Routine safety inspections, Compliance paperwork +1 more | |
Typically qualifies
Typically does not
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| Directly guides scientists and engineers through development trials. | Direct supervision | First-line supervision of experiments, Technical review of trial alternatives +1 more | Marketing plans, Staff reviews +1 more | |
Typically qualifies
Typically does not
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Wage categories follow IRC Section 41. Only the portion of time spent on qualified research counts, and the percentage 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.
Take these into a 15-minute conversation with your team.
The last question matters most. Customer-funded work and work performed outside the US are generally excluded. Funded work is excluded to the extent your business does not bear the financial risk or does not retain substantial rights in the results.
Potentially, when development resolves technical uncertainty about factors such as stability, performance or manufacturing. Taste preferences, styling and market research alone are not qualified research.
They may count if they test technical alternatives for a new or improved product or process. Routine quality testing using an established method is different.
Some controlled agricultural experiments may meet the research requirements. Routine farming, ordinary monitoring and repeating a known growing method are not automatically eligible.
Nondepreciable ingredients and materials used in qualified research may be eligible supplies. Separate experimental consumption from ordinary commercial production and equipment costs.
A portion of eligible U.S. contract research expenses may count if you meet the risk and rights requirements. Standard production fees and routine testing services are not automatically qualified research.
Keep formulation revisions, pilot-batch logs, trial protocols, test results and supported employee time. Identify what was uncertain and why competing alternatives were tested.
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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