Food Science Funding – How SR&ED Funding Works for Natural and Organic Ingredient Projects

As consumers have more information about where their foods come from, partially driven by the health and wellness industry, they are demanding more from their processed foods. In particular, they want to know how the base ingredients are grown, sourced, and processed. Scientific Research and Experimental Development (SR&ED) in food science may occur in relation to how foods are grown, genetically modified, sourced, processed, and integrated into new or existing products.

What is a Natural Ingredient?

“Natural” in regards to food claims has three specific criteria as defined by the Canadian Food Inspection Agency (CFIA):

1. Not to contain, or to ever have contained, an added vitamin, mineral nutrient, artificial flavouring agent, or food additive;
2. Not to have any part removed or significantly changed, except the removal of water (for example, the removal of caffeine); and
3. Not to have been submitted to processes that have significantly altered their original physical, chemical, or biological state (i.e. maximum processes, such as chemical additions).

Natural is not an indication of the quality or nutritional value of food.

What is an Organic Ingredient?

Organic refers to a specific, regulated way in which products are grown and processed. Organic does not indicate the health or nutrition of a given food. Foods must be grown on fields where no prohibited substances have been applied to soils for the past three years, and then certified through an approved regulatory body. This does not mean that fertilizer or processing aids have not been used. There is a list of approved substances from the Standards Council of Canada that are approved for soil amendment or processing aids. To label a product organic, it must contain 95% organic ingredients. To contain “organic ingredients,” a product must list the percentage of ingredients that are organic.

Genetically Modified vs. Genetically Modified Organisms (GMO)

Almost all modern foods have been genetically manipulated in some manner. This includes selective breeding for random mutations, cross-breeding, and splicing.

However, GMO refers to those foods modified in a highly controlled setting to target specific genes to improve yield, nutrition, insect resistance, or herbicide resistance. This allows for reduced land use, herbicides, and insecticides while producing a more reliable yield. It does not indicate the health or nutrition of a product.

There are very few GMO foods in the marketplace. They are the following: corn, soybeans, cotton, potato, papaya, summer squash, canola, alfalfa, apples, one variety of eggplant, pink fleshed pineapple, AquAdvantage Salmon, and sugar beets. Papaya would likely be extinct without the use of gene splicing to provide viral resistance.

How Shelf Life is Impacted Using Natural Ingredients

Shelf life traditionally relies on several methods and additives, both natural and more processed preservatives, to provide a long shelf life that enables greater flexibility in the supply chain of a product.

For example, being able to extend the shelf life of a bread or packaged meat by 2–3 days would allow more time for transportation to the grocery store. This would allow for centralized processing and for consumers to have more time to purchase the product off the shelf and keep it fresh in their home. A longer shelf life allows consumers longer time to store the product in their home without it going stale or rancid.

Traditional Natural preservatives may include salt, sugar, tocopherols, or citric acid. Examples of processed preservatives include sulphites, BHA, BHT, Nitrites, and Sodium Benzoate.

But What Does This Mean for SR&ED?

When assessing a project to determine if it meets the requirements of SR&ED, one must consider the why and the how: why was a project undertaken and how was the work performed?

For SR&ED to occur, the work must be conducted to achieve a scientific or technological advancement and must be conducted in a systematic manner.

As such, scientific/technological advancement may be required for the following:

• to understand how products need to get reformulated to utilize natural and/or organic ingredients,
• to maintain or improve the existing organoleptic/sensory properties, and/or
• to overcome processing challenges related to natural and/or organic ingredients.

Technological/Scientific Uncertainties also often arise when trying to remove the processed preservatives from goods without affecting shelf life, as the preservatives can also act as conditioning or processing aids.

Similarly, natural preservatives impart different taste profiles and dough conditioning. When investigation and experimentation is taken into how the preservatives behave in the given food matrix or how to change the processing to match an existing product, SR&ED may occur.

To learn the differences between the Scientific Research and Experimental Development (SR&ED) tax incentive program and the Industrial Research Assistance Program (IRAP) grant funding program, download our free IRAP vs. SR&ED slide deck to learn the difference between these two kinds of R&D funding programs, and how your business can stack their funding.