Food manufacturing’s best kept secret is its own innovation
Shenal Wijetunge, Partner at Dow Schofield Watts Tax Advisory, challenges the common assumption that innovation happens only in laboratories, technology companies, or formal R&D departments.
Ask the owner or finance director of a food manufacturer whether their business is doing anything innovative, and the answer is often surprisingly modest: “Not really, we just make food.”
Speak to the technical, production and engineering teams, and a very different picture emerges.
They may have spent months reformulating a product to reduce sugar or salt without compromising taste, texture or shelf life. They may have adapted an automated line because standard equipment could not handle the product or hygiene requirements. Or developed new traceability systems to give greater visibility across increasingly complex supply chains.
This is highly complex technical problem-solving, often hidden within the day-to-day operation of a food business.
Having previously worked as a Process Development Engineer in the food industry, including at Heinz, I saw first-hand how much development can sit behind even the most familiar products.
Take something as established as a can of tomato soup. Ingredients, nutritional requirements, processing conditions, equipment and packaging can all change. Manufacturers have to adapt while ensuring the consumer still gets the taste, texture and quality they expect.
Food manufacturing is also a demanding environment for innovation. Changes can have implications for safety, consistency, shelf life, traceability and production efficiency, meaning seemingly routine problems can require significant technical development.
NPD teams, development kitchens and production trials are obvious places to look, but some of the most interesting innovation begins with an unexpected operational problem.
CASE STUDY: When a difficult crop uncovered a bigger opportunity
One major UK food manufacturer experienced this following an exceptionally hot and dry summer, which changed the characteristics of the wheat entering its production process.
Initially, it was viewed as a supply issue. But the wheat began behaving differently during manufacturing. Technical teams had to understand what had changed, run trials and adapt processing conditions while maintaining throughput, quality and production volumes.
The consumer, of course, still expected exactly the same product.
Looking more closely at the problem uncovered a wider programme of technical development across the business.
The activity contributed to more than £600,000 of benefit through R&D tax relief. A patentable element within specialist packaging technology was also identified, contributing to more than £1 million in corporation tax savings through Patent Box, while the crop-quality work supported an application for sector-specific innovation funding.
None of this had originally been described internally as innovation. It was simply the work required to solve problems and keep production moving.
That pattern is repeated across food manufacturing.
Reformulation can require repeated trials to maintain shelf life and sensory characteristics. Automation may involve adapting machinery or controls because standard systems cannot cope with a particular product. Traceability projects can mean connecting software and production systems never designed to work together.
Very few of these projects begin with someone saying: “Let’s innovate.” More often, they begin with: “We have a problem. How do we solve it?”
For leadership teams, that’s the important question. Where have products or processes had to change? Where have technical teams encountered problems without an obvious solution? Where has the business had to experiment, test and adapt?
Those questions can reveal where innovation is happening and the value being created as a result.
That value might be realised through R&D tax relief, Patent Box, grant funding or other innovation support. But the bigger opportunity is recognising the innovation already taking place and using it to support future investment and growth.

Tax Advisory Partner