Are you developing new products or processes for the future of food in Aotearoa? The Government’s R&D tax rebate is helping businesses large and small cut the cost of innovation by accessing R&D funding streams. In this article we explore how the food and beverage industry can benefit.
New Zealand's food and beverage industry is seeing a surge in innovation investment, with businesses across the country increasing their research and development (R&D) spending by 17% last year (Stats NZ). This double-digit growth reflects a broader national trend, as companies strive for a competitive advantage in the new realities of shifting consumer preferences and environmental challenges.
The Importance of R&D Investments
With high costs of labour, energy, and capital, the drive for innovation is not just about staying competitive; it's about unlocking new efficiencies across the supply chain. Now may be the perfect time for New Zealand businesses to strategically leverage this momentum, turning innovation into a catalyst for sustained growth and market leadership.
Yet for food and beverage businesses to develop new product formulations, enhance production processes, develop sustainable packaging solutions, or otherwise achieve an innovation edge, they need to pursue a significant program of investment.
Many NZ food and beverage businesses have not yet appreciated how recent improvements in government R&D funding make innovation investment much more attractive.
Packing Potential: An R&D Funding Success Story
Our NZ-based grant consultants have helped a fruit packing house use the R&D Tax Incentive (RDTI) to fuel innovation in their facilities and achieve a competitive edge. Our client operates a technologically advanced greenfield packhouse, providing orchardists and growers with a suite of post-harvest services to test, manage, and fully prepare their fruit for shipping to key international export markets.
With an eye to the future, the business decided five years ago to invest in a dedicated, multi-million-dollar program of innovation and technical enhancement to their equipment and facilities. This required the development of new and unique automation solutions due to the specific nature of the fruit handled, the required packing configurations, and the local conditions. Specific designs were drawn up, world-first systems set up, and extensive tests carried out over hundreds of hours through the off-season.
The R&D Tax Rebate in Action
The company used a 15% refundable tax credit from the R&D Tax Incentive (RDTI) to offset the costs of developing their new systems. This approach helped fund:
- Specialist contractors and consultants
- Time of technical staff to develop and test new systems
- Packing materials and consumables used for testing
- Depreciation of equipment and machinery during the testing
- A contribution to utilities, rent, insurance, and other overheads
By strategically investing in innovation, the company increased its efficiency and productivity, meaning it could achieve higher throughput over the time-limited season. These cost savings were passed on to their customers in the form of lower prices, helping the company achieve a clear competitive edge.
Finding an Innovation Partner to Secure Business Grants in NZ
The RDTI is a powerful tool for New Zealand's food and beverage industry, fostering innovation and helping businesses overcome the financial hurdles of doing R&D. But, it’s just one of several government R&D funds that are widely underutilised.
Additional tax refunds for up to 28% of the R&D investment are an option for many businesses who may not even realise they qualify. The recently improved New to R&D Grant now offers a 40% refund to businesses embarking on their first or most recent R&D investment. With careful consideration of each fund, some businesses can combine multiple NZ R&D tax rebates .
Get R&D Tax Incentive Guidance
For many SMEs, engaging an independent grant consultant is the best approach to ensure they unlock the full potential of NZ R&D funding. Since we launched our New Zealand arm in in 2022, we’ve become a trusted partner for many New Zealand businesses seeking advice and assistance to access government grants and incentives.
Our Christchurch-based consultants work with businesses across the food tech sector, including innovators in packaging, distilling, brewing, coffee roasting, nutritional supplements and more. Speak to an expert before embarking on your R&D funding application.
For more information on how BlueRock can help your business benefit from NZ R&D funding programs, submit the form below or contact Tom Moore, BlueRock’s New Zealand-based grants and incentives advisor, on +64 272 386 858 or by email at tom.moore@thebluerock.co.nz .
