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COVID-19: How The Food And Drink Industry Is Adapting

Where there’s a will, there’s a way

Back in “normal” times, long before we’d ever heard of COVID-19, the food and drink industry was already a buzzing hub of innovation. From stirring up exciting new flavours of our snacking favourites to caffeine/gluten/fat-free drinks alternatives, over the decades it’s been a sector that doesn’t stand still.

While the pandemic feels like it’s been with us forever bringing misery and economic uncertainty in its wake, for many industries it’s been a time of reflection and innovation; and the food and drink industry is certainly no exception. Like all businesses, food and drinks companies have looked to reduce their costs, improve their product ranges and stay competitive in a highly volatile market.

But this kind of innovation doesn’t come cheap. Plus, with the public tightening their purse strings, hospitality venues closing their doors and revenue streams often drying up completely, companies are turning to any and all of the government funding support on offer - including the very generous R&D Tax Credits scheme (more on this later).

In this article we’ve looked a little more closely at how companies in the food and drink sector are adapting in these most difficult of times, and how their work is attracting the relief.

Providing a takeaway service

When lockdown hit, many businesses needed to work out how to get their food and drink products to customers at home. This took many shapes, but one important hurdle was in finding packaging that was leak proof and would keep the products hot (or cold). After all, there’s no point in creating a delicious own-recipe dish or perfect cup of coffee if it doesn’t survive the journey to the customer. This meant that quirky ceramic dishes and glass containers were swapped for polystyrene or plastic, plus more delivery drivers were needed too.

With the pandemic rumbling on and winter fast approaching, the hospitality industry particularly will need to continue innovating in this way to maintain their revenue streams through any future lockdowns.

Making premises “Covid secure”

The lockdown also provided businesses with the chance to make their premises Covid secure. This typically involved reducing capacity, and adding in sanitiser stations. Indeed the pandemic has made all of us look at hygiene in a different way, and even food and drinks companies have gotten in on the act.

In the early days back in the spring, hand sanitiser was in extremely short supply leading to some alcoholic drinks companies getting creative. Gin distilleries took on the innovative task of using their ingredients and machinery to devise hand sanitiser for public use for example.

Expanding outdoor seating capacity

The warm summer weather provided the perfect opportunity for the food and drink sector to welcome back punters by offering Covid-safe outdoor seating. Many bars, restaurants and breweries are continuing to refurbish their outdoor spaces to allow the maximum number of people in safely. Where this hasn’t been possible, or where suppliers have looked to take control, many brands have instead “gone mobile”, bringing their food and drink to their customers using catering trucks and vans.

Getting marketing on point

Fewer people are out and about these days so there’s much less browsing menus in windows or being sold the latest cocktail by a smooth-talking barman. Instead, customers are browsing venues on social media, checking to see what food and drinks are available and finding out about their COVID-19 security efforts. This has meant companies have had to make their marketing top notch in a way they’ve perhaps not done before.

Going forward, food and drinks brands and hospitality venues will need to continue investing in online marketing to keep their brand name strong. From devising attention-grabbing social media campaigns to researching and developing new and improved packaging, now’s the chance to adapt and thrive.

Food and drink innovation funding, thanks to R&D Tax Credits

COVID-19 has been tough this year, but innovation can hold the key to success. And the good news is, if your business is involved with any of the following areas then you could claim R&D Tax Credits to help with the costs.

Find out more about R&D Tax Credits.

What type of work might attract R&D Tax Credit?

Developing new product lines, flavours, textures etc. is a big one. But there’s a broad range of R&D activities that qualify for R&D Tax Credits including:

Making products more nutritional by reducing fat, salt or calories

• Improving an existing product’s stability and/or shelf life
• Adding more protein into products to make them more filling
• Reducing or eliminating artificial colours, flavourings or dyes
• Modifying appliances, equipment or food processing procedures
• Reducing the number of products containing common allergens like nuts
• Designing, constructing and testing new prototypes
• Carrying out experimental and/or investigative work to solve a particular technical problem (this should be over and above any usual troubleshooting activities if R&D Tax Credits are to be claimed)
• Developing new and improved food production processes or techniques to make sure the product meets health and safety standards
• Solving issues around the scaling up of a product

This is by no means an exhaustive list, but it gives you an idea of the kinds of eligible R&D that food and drinks are typically awarded R&D Tax Credits for. If you’re not sure whether your project or your company qualifies, contact our team for advice.

Ready to kick-start your claim? Use the Tax Cloud portal

Tax Cloud is an online, Cloud-based portal that allows UK businesses to create and submit their R&D Tax Credit claim quickly and simply. It’s free to sign up and enter your own figures and calculations, plus the portal will also guide you through the writing of your technical narrative. The success only fee structure means you'll only be charged should your claim be successful.

And of course, our team of R&D tax experts and advisors are on hand if you need us. We even review everything on your behalf before submission, and will offer constructive feedback where required.

The claiming process for R&D Tax Credits can be very complex, and applications are scrutinised thoroughly by HMRC - so why go it alone?

You might also find our recent blog on what makes Tax Cloud different useful too.

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