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The R&D driving the free-from food revolution

Director & Head of Policy
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Root vegetables highlighting R&D in free-from foods

The UK retail free-from market was about £652 million in 2020. Dairy-free and lactose-free sales reached £455 million and more than half the population purchased free-from products. It is predicted that this will continue to grow. There is something of a revolution taking place.

According to Kantaar WorldPanel, the UK retail free-from market was about £355 million in 2014. More than half the population purchased free-from products. It is predicted that this will grow to £538 million by 2018. There is something of a revolution taking place.

Supermarket shelf space is being taken over. Journalists are churning out the column inches. Novak Djokovic, Gwyneth Paltrow and Victoria Beckham are waving the banners. In the USA, free-from is happening at an even faster pace – about 25% of all new food launches have gluten-free claims.

Gluten probably leads the way as the main free-from product type, but there are 14 allergens in total including celery, eggs and mustard. And let’s not forget other dietary choices that exclude food types such as vegetarianism and veganism, fat-free and sugar-free. This last one took on an extra prominence with the introduction of a sugar tax on soft drinks.

Among all that we can draw out three drivers of the free-from movement: regulation, lifestyle and allergies.

In reality, it is not as black and white as this – these drivers interact with one another. So, now regulations say that all allergens should be listed on pre-packaged and loose packaged food. Some people are completely intolerant to some food stuffs, but others are just sensitive or are keen to follow a certain lifestyle choice and so on. Nevertheless, these are a good starting point for understanding the momentum behind free-from food, and the motivation for companies to invest millions of pounds in research and development (R&D) in this area.

What kind of R&D is there in free-from food production?

A starting point for free-from R&D may be focused on simply getting a ‘functioning’ product out there. Taking gluten as an example, it is made of two protein groups – gliadin and glutenin – which bond when flour is mixed with water to make dough. As a function it gives food structure and stretch properties. So when making a food that is free from gluten, compounds may need to be developed that will fulfil this function, and therefore R&D activity will reflect this.

As a free-from market matures and becomes more competitive, the R&D may shift, looking to make improvements that differentiate a free-from product from its competitors. Now we may see extensive experimentation with ingredients and process to work on elements such as the nutritional content, shelf life, taste, texture, appearance and cost. R&D could also involve production equipment too, making use of new technologies like 3D printing for example.

How start-ups have disrupted the food industry with free-from products

It’s not often that the little guy has an advantage over the big corporates. Yet in this sector, a lot of the innovation comes from SMEs. They may not have the multimillion-pound R&D budgets, but neither do they have huge production plants geared up to produce mainstream products that could contain contaminants for free-from food (how often do we see ‘may contain nuts’ warnings in products that have no nuts as ingredients!). What the little companies do invariably have is a passion for developing free-from products. Maybe driven by a founder’s own food intolerances, or maybe by their specialist knowledge of a particular food type.

Scotland-based Pulsetta is one such company. The founder is lactose intolerant and gluten sensitive, and was disappointed by the lack of alternative breads available. He started experimenting at his kitchen table at first and eventually tried baking with flour derived from milled pulses. He was on to something and after bringing in the support of many organisations struck upon a winning formula.

Pulsetta bread is gluten-free, egg-free, dairy-free, counts as one of your five-a-day and is high in fibre. Now Pulsetta have expanded to offer sweet and savoury biscuits, snacks, rolls and other baked goods all produced with the same philosophy. They ship throughout the UK and even export to Germany and Austria.

The image of the kitchen table in such stories is quaint but perhaps belies the R&D that could be going on. Experimenting with formulations and recipes including ingredients, quantities, cooking temperatures and cooking times could all count as valid areas for R&D tax credits. To produce a successful product, hundreds of iterations may be required. And things like the ingredients, any staff or sub-contracting costs, heating, lighting, electricity and water could all count as qualifying costs in an R&D tax credit claim.

R&D produces ice cream that is dairy-free, cholesterol-free and soy-free

Whether it is for lifestyle reasons or a health necessity, dairy and cholesterol free ice cream will be a wish come true for some people. Dutch-based Frank Foods, a grains and legumes company, has developed a Lupin-based protein compound called FRALU-CPS that can be used as a creamy dairy substitute in the production of ice cream.

Experimenting with the properties of compounds is a key area of R&D in the food industry. We are talking about going back a level before recipe formulation to develop specialist ingredients that can be used in the recipes. It is particularly relevant to the free-from sector where lost properties and flavours need to be emulated.

In this case Lupin has useful characteristics such as emulsion and viscosity and its natural yellow colouring means that artificial colouring is unnecessary. It is also appealing as the foundation for an ingredient, as it is 100% vegetable based and has sustainable credentials, unlike soy for instance, which has been linked to genetic modification, rainforest destruction and poor treatment of farmers.

Eating free-from in restaurants

The free-from food movement is becoming increasingly relevant to restaurants who see the need to appeal to the growing proportion of the population for whom free-from options are essential or desirable. For a long while most restaurants have had vegetarian options whilst some serve vegetarian or vegan food exclusively. Now, particularly in larger cities, we are seeing restaurants serving gluten-free food and other free-from menu items.

As we observed earlier, it is not just about eliminating a certain ingredient from a dish. Taste, cost, texture, appearance and many other things need to be got right and that will normally happen in a development kitchen. Just as with pre-packaged food production, this could very well qualify for R&D tax credits. Staff costs, utilities like energy and water, equipment, and ingredients all likely to be qualifying costs that could see a restaurant owner achieving a reduction in their corporation tax bill.

Free-from and virtual taste

We all love the taste of salt in our food. Unfortunately, too much of the stuff can raise blood pressure, which puts strain on the circulatory system. This can lead to all kinds of serious health problems including heart attack, stroke, dementia and kidney disease. Therefore, we are all advised to watch our salt intake, and for some a low-salt diet is essential.

While there has been plenty of research put into developing salt-free or low salt seasonings, scientists from Japan appear to have come up with a more shocking solution! Doctor Hiromi Nakamura and her team have developed an electric fork that transfers a very mild electric current to the tongue whilst eating that simulates the flavour of salt. They call it augmented gustation or virtual taste. The current can be regulated with a slider to deliver a stronger or weaker taste of salt with each mouthful. It is supposedly completely harmless: Dr Nakamura has been eating electric food for several years and she is still alive and well to tell the tale. It goes to show the huge range of innovative angles that can be taken in the free-from food industry.

Interestingly, it is said that one of the pioneers of electricity – Johann Sulzer – discovered the taste of electricity 250 years ago when he placed his tongue between a piece of silver and a piece of lead. His discovery was one of the inspirations for Alessandro Volta who invented the battery.

More consumer facing free-from tech

Sticking to this technological theme, what other consumer-facing tech is helping people stay free from various ingredients?

Nima is a pocket-sized gluten sensor for people who need to be extra careful with their gluten intake. It’s essentially a portable testing lab for checking whether food they have been served contains gluten. Pop a sample of food in one of its capsules, load it in the machine, and let it do its thing – if there are more than 20 parts per million of gluten you get a sad face on the digital display, less than that and it’s a smiley face and you are good to go – tuck in.

Of course the R&D that would go into producing a machine like this is completely different to developing foodstuffs. There could be engineering work to design an end product small enough to carry about, reliability testing, software, and user experience development. While these fields are different from those in food production, the areas of qualifying costs for R&D tax credit purposes could be similar – staffing, utilities, materials…

Nima is useful when you are at the table with food in front of you, but what about when you are menu planning or buying your ingredients in the shop? For that, enter Spoon Guru, a mobile app. You load your personal food profile based upon a wide range of free-from criteria and other food types, and it will provide you with a feed of recipes and products that match your profile. For consumers, as well as the physical discomfort or danger of eating something they are allergic too, living a free-from life comes with a whole heap of hassle: “Can I eat this?… Where can I find that?” Spoon guru uses technology to solve that. You can even use it to scan barcodes in the shop to give you quick answers to those questions you have.

Firms developing digital tech often don’t realise that their innovations can qualify for R&D tax credits. But coding, algorithms, data and big data processing, APIs, and UX development that improves a product, process or service are all fertile ground for an R&D tax credit claim.

Are you innovating in the free-from food market?

Whether you are responding to regulatory change, allergens or lifestyle trends, if you are developing ingredients, experimenting with recipes or working on technological solutions that help consumers with their free-from experience make sure you explore R&D tax credits. Your competitors may well already be doing so.

The government wants to help innovative companies and does this through the R&D tax credit system which can be worth more than 30% of your qualifying costs. ForrestBrown can help you maximise the impact of R&D tax relief so you can continue innovating.