Packaging is an indispensable aspect of every product's commercialization. From warehousing and transportation to sale and end use, packages are fundamental facilitators of handling, protection, and conservation of goods.
A number of innovation efforts are currently underway to optimize packaging practices, particularly concerning their effectiveness, safety, efficiency, and environmental impact.
This article will discuss examples of
innovation in the packaging industry and present the R&D
tax credit opportunity available for companies engaged in
Enacted in 1981, the Federal Research and Development (R&D) Tax Credit allows a credit of up to 13 percent of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
Eligible costs include employee wages, cost
of supplies, cost of testing, contract research expenses, and
costs associated with developing a patent. On December 18,
2015, President Obama signed the bill making the R&D Tax
Credit permanent. Beginning in 2016, the R&D credit can be
used to offset Alternative Minimum tax and startup businesses
can utilize the credit against up to $250,000 per year in
In recent years, the packaging industry has faced a number of challenges, from a difficult and uncertain macroeconomic context to mounting costs of energy and raw material. In this scenario, innovation stands out as a basic condition for success.
Potential for advances in the packaging industry is limitless. As a matter of fact, since its birth, this industry has been based on innovation. A few examples of groundbreaking products that changed the face of packaging in their times were the invention of moisture-proof cellophane in the early 1900s, the use of zipper bags for food storage in the 1960s, and the creation of modified atmosphere packages for meat conservation in the 1990s.
Currently, a number of aspects stand out as fruitful fields for innovation. Companies engaged in R&D activities regarding any of the following domains constitute strong candidates for Federal R&D tax credits.
Major companies from various economic sectors have established sustainability commitments aimed at reducing their environmental footprint, not only through changes on their own operations but also through the creation of new and stricter requirements for business partners. In most cases, the so-called supply chain sustainability programs present specific targets and requirements for packaging suppliers. The following table presents a summary of major companies' environmental policies:
A number of innovative packaging initiatives are currently underway. The following examples demonstrate the variety of promising R&D projects in the packaging industry.
Recent examples of innovative efforts in the packaging industry inspire hopes of a promising future. DuPont has taken on the difficult task of imagining the probable advances on a distant future. The fictional list can serve as inspiration for packaging companies committed to continuous innovation.
A water-purifying pouch containing dry food that can be tossed in any water to provide both safe food and clean water. This innovative solution would facilitate food delivery to disaster areas.
This novel design would contain hidden beneficial bacteria, used to protect food and cosmetics.
An innovative tool to avoid waste, this film package would reseal, shrink, and conform to its content whenever triggered by the consumer.
Printable micro-devices would keep the exact balance between oxygen and nitrogen in a package in order to keep food fresh for longer.
A multi-use pouch capable of emitting a microbe-killing gas to sterilize its contents. This innovative package would contribute to fewer contaminations from dirty health/medical instruments.
The packaging industry is a prospering field for innovation. The combination of the increase of environmental awareness, evolving technologies, selective consumers, and a highly competitive market make it crucial for packaging companies to engage in R&D projects. Federal R&D tax credits are available to support eligible activities.
Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.
Andressa Bonafé is a Tax Analyst with R&D Tax Savers.
Charles G Goulding is a practicing attorney with experience in R&D tax credit projects for a host of industries.
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