The R&D Tax Credit Aspects of Plant Protein Products

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        There has been a stronger desire for consumers to know more about the sources of their ingredients. People are becoming more educated about food and, in turn, their eating habits and diets are changing.

        Plant-based proteins play a huge role in human nutrition. Plants comprise of carbon, vitamins, minerals, protein, essential fatty acids, and energy for human food production. They are the main harvesters of solar energy, supplying people with the majority of their food energy intake and most of their protein needs.  Food intake rich with plant-based proteins is beneficial to people’s health and overall well-being.

         This article will present some of the recent and upcoming developments being made with foods rich in plant-based proteins and how companies must turn towards innovation to incorporate plant-based proteins into the human diet. R&D tax credit opportunities are available to support companies engaged in related innovation efforts.

The Research & Development Tax Credit

        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:

  • New or improved products, processes, or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation
        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 payroll taxes.

The Importance of Protein

        Proteins are a main source of energy for our bodies. They are crucial for healthy growth, as they serve as building blocks for our cells. Proteins are found in every single cell in the human body. Proteins affect people’s skin, muscles, tendons, cartilage, hair, and nails. Proteins help form enzymes, hormones, antibodies and new tissues. They replace old cells with new ones which carry important nutrients in and out of those cells.
        Proteins are made up of strings of molecules called amino acids. Amino acids are the building blocks of muscle, body tissue, the immune system, and hormones in the body.  Of the 20 amino acids that make up nutritional proteins, 9 are considered “essential”. This means that the body cannot produce these essential amino acids on its own, so they must be consumed through food. Eating a diet rich of plant-based proteins can help people get the proper nutrition their bodies need.
        Most foods contain small amounts of the 20 amino acids. Yet, they are only considered to be “complete” if each of the 9 essential amino acids are provided. Complete proteins help support bodily functions and keep people healthy.

Examples of Plant-Based Complete Proteins

        Soy is a complete protein as it contains all nine essential amino acids. Therefore, it has been a long standing ingredient in vegetarian diets. Besides being a source of complete protein, soybeans have also been shown to reduce cholesterol, help prevent prostate cancer, and even fight osteoporosis.

        Tofu, soy milk, and a wide variety of meat and dairy substitutes are derived from the soybean. Many companies are moving towards non-GMO (genetically modified organisms) soybeans for their products, as scientists and consumer and environmental groups have cited many health and environmental risks with foods containing GMOs. Simply look for the non-GMO Project verified soybean products and enjoy the health benefits they provide.

        Buckwheat, contrary to what its name sounds like, is actually not a type of wheat at all. It is related to the rhubarb plant. It is gluten-free. Studies have shown that have shown that it may improve circulation, lower blood cholesterol and control blood glucose levels.

        Quinoa is a popular healthy complete protein that is and a good source of calcium, iron, fiber, and phosphorous. Quinoa’s consistency and texture is much like a combination of rice and couscous. Some people eat it as a gluten-free alternative to rice.

        Hempseeds contain magnesium, zinc, iron, calcium. They are also rich in Omega-3 fatty acids, which are essential fatty acids vital to our metabolism. They can be eaten raw, ground into a meal, sprouted, or even made into hemp milk.

        Chia seeds are high in fiber, iron, calcium, zinc, and antioxidants. They are the highest plant source of omega-3 fatty acids. They are gluten-free and play an important role in regulating blood sugar in the human body. Due to their gel-like consistency when wet, some vegans use chia seeds in puddings, smoothies, and as an egg replacement. They can also be eaten raw.

        It is not necessary, however, to eat complete proteins as long as people are combining different plant-based protein sources. Combining whole grains with vegetables helps vegans and vegetarians get all essential amino acids their bodies need. Examples of plant-based proteins are as follows:

Examples of (Incomplete) Plant-Based Proteins

Pea Protein
        Pea proteins are vegan, non-GMO, non-allergen, and also have a low environmental impact. Pea proteins are becoming increasingly popular due to their non-GMO sourced material.

Rice Protein
        Rice protein contains all 9 essential amino acids. Rice protein is also allergen friendly, making it a good choice for people who have dairy, soy, and/or gluten allergies.

        Beans are high in fiber, B vitamins, iron, potassium, and are low in fat. Beans are high in antioxidants, which are a class of phytochemicals that incapacitate cell-damaging free radicals in the body. Phytochemicals are non-nutritive chemicals that have protective or disease preventive properties, which are derived only from plants.

        Microalgae is a microscopic form of algae that is produced using fermentation technology. It is a source of protein, fiber, healthy lipids, and micronutrients such as lutein and zeaxanthin. It has a strong nutritional profile. Additionally, microalgae are a planet-friendly, renewable resource.

Health Strides through Plant-Based Diets

        A plant-based diet can be beneficial for a person’s overall health. Plant-based diets are valuable in adults in preventing and possibly reversing heart disease. Obese children who begin a low-fat, plant-based diet may also lower their risk of heart disease through improvements in their weight, blood pressure, body mass index, cholesterol levels, and insulin sensitivity.
        There are different types of plant-based diets one could follow: vegan, lacto-vegetarian, and lacto-ovo-vegetarian:

  • Vegan
    • No animal products of any kind are consumed. No meat, eggs, or dairy are eaten.

  • Lacto-vegetarian
    • Dairy products are consumed, but no meat or eggs are eaten.

  • Lacto-ovo-vegetarian
    • No meat is consumed, but dairy products and eggs are eaten.

        Some people strive to follow a plant-based diet, but occasionally eat meat, poultry, pork, or fish. They refer to themselves as “flexitarians” or “semi-vegetarians”. A person who refers to themselves as a "pescatarian," would eat fish in addition to a plant-based diet. It is important that vegans and vegetarians make sure they are eating a variety of protein-rich foods.

Are Plant-Based Dieters Getting Enough Protein?

        This is probably one of the most commonly asked questions to people following a plant-based diet. Although protein is undoubtedly an essential nutrient which plays many key roles in the way the human body functions, people do not need huge quantities of it. Most Americans get more than enough protein each day, and may even be getting too much of this nutrient from animal sources, like meat, poultry, and eggs. Although important in the diet, an excessive amount of protein will not enable a person to build more muscle or make them stronger. When a person consumes too much of it, they likely take in more calories and fat than their body needs.

        Adults in the U.S. are encouraged to get 10% to 35% of their day's calories from protein foods. That's about 46 grams of protein for women, and 56 grams of protein for men. Vegetarians and vegans simply need to make sure they are eating a variety of plant-based protein products to get the proper amount they need. Companies, such as the ones discussed below, continue to innovate by incorporating plant-based proteins into their food products. This innovation may enable them to be eligible for R&D tax credits.

Plant-Based Protein Products

        Meat consumption has been declining in the United States, and more and more people have been gravitating towards plant-based protein alternatives. R&D teams have been working to create plant-based protein products with taste and textural properties of animal products such as beef and chicken. Americans are starting to understand that meatless, plant-based protein products are a great source of protein, and can be delicious too.

        Food scientists have been using new innovative techniques and cooking processes to develop plant-based protein products that behave like animal proteins. Developers of plant-based products are getting down to the molecular level to build burger and chicken alternatives that taste and, texturally, feel like meat. With the emergence of plant ingredients now available combined with current technology, plant-based products are becoming more prevalent in local supermarkets.

Beyond Meat
        A new plant-protein based company, Beyond Meat Inc., located in Manhattan Beach, California, is striving to redefine what meat is. Founder of the company, Ethan Brown, thinks of his protein-based products as real meat. Although meat is typically defined as food derived from an animal, Brown thinks his type of meat is better than animal protein varieties, which the term “meat” has been traditionally applied.

        Beyond Meat’s products are made using a proprietary extrusion process developed by University of Missouri professor Fu-hung Hseih. They use a gentle cooking process to create the plant-base products, where they use steam, pressure, and heat to partially cook the proteins. This way, the proteins unfold in a controlled way and then are cooled in a controlled way, causing the proteins to integrate and fold upon each other. This delicate process creates moisture and a distinct texture to mimic that of traditional animal meat.

        Beyond Meat’s R&D vice president, Tim Geistlinger, argues that “…animal meat and plant meat are one and the same. They’re all constructed of proteins, fats, nucleic acids, carbohydrates. All of these things exist in living things, and plants are living. Animals are living…” From an R&D perspective, it’s a matter of reconstructing what animal meat is and developing plant-protein based meats to be similar in terms of density, structure, and fiber. Beyond Meat believes that they are making real meat, it is just coming from plants instead of animals.

        They have also created a new burger, called the Beast Burger, formulated from a mixture of plant-proteins including pea, moringa, and hydrilla. This Beast Burger has a high nutritional value, having more omega-3s than a serving of salmon, more calcium than a glass of milk, more iron than a serving of steak, more protein than a beef burger, and more antioxidants than a serving of blueberries.  

Impossible Foods
        Impossible Foods, another California-based entrepreneurial venture, is working to perfect the taste of a plant-based burger. They want to make it so authentic that it “bleeds” like a real burger. They extracted roots from legumes to mimic the blood effect from a rare burger. Scientists from Impossible Foods bioengineered from the heme protein molecule found in hemoglobin. This is the compound in animal blood that gives animal red meat its classic “meaty” taste. Impossible Foods is looking to have this burger available in stores by the end of 2015, however, the challenge of its high production cost may result n a later date.

        Plant-based proteins can also be consumed through powder form. Some people prefer the powders, so they can control the amount of protein they ingest and what other foods they choose to combine it with. Some examples are as follows:

Quest Nutrition
        Quest Nutrition LLC, located in El Segundo, California, has several plant-based protein products coming to market. They have a new Brown Rice Powder, Coconut Oil Powder, and MCT Oil Powder which serve as protein sources for vegan and vegetarian diets. The Rice Powder is high in fiber, iron, manganese, magnesium, phosphorus, potassium and vitamin B. It also is an attractive option for people with gluten intolerances.  The Coconut Oil Powder and their MCT Oil Powder both contain essential fats for the human body. MCT provides the same feeling of satiety that standard fats do, but without the caloric load.

Nature’s Food
        Nature’s Food 100% Plant-Based Protein Powder is allergy friendly, being that it is vegan, non-GMO, soy-free, gluten-free, and lactose-free. It is formulated without any preservatives, artificial flavors, artificial sweeteners, or cholesterol. It contains essential amino acids, as it contains organic rice protein, organic alfalfa, and organic inulin.


        The food industry must be able to adapt to ever-evolving personal eating habits. The ability to innovate, creating new products and processes, is key for obtaining federal and state R&D tax credits that are available to support companies that utilize plant-based proteins in their products.

Article Citation List



Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.

Jennifer Reardon is a Project Coordinator with R&D Tax Savers.

Andrea Albanese is a Manager with R&D Tax Savers.

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