The Research and Development process normally includes some or all of the following types of activities, projects or programs: new product, packages and/or process development, technical procedure development, product improvement, technology advancement, productivity improvement and product line extension. The activities relating to line extension, productivity improvement, and product, package and/or process improvement may involve a wide variety of formulation alterations, manufacturing modifications, and ingredient substitution and may include considerations for packaging and equipment design changes. These activities may sometimes be achieved by standard practice, but may also involve technological uncertainty leading to technological advancement. In all cases, the key consideration in determining whether a project qualifies, is the fulfillment of the three criteria.

The science and technology involved in the development of product formulations and manufacturing process specifications usually requires SR&ED. Science and Technology as practiced by the industry, refers to the development of products and processes that meet consumer needs and are designed to extend shelf life and survive the transportation and distribution conditions that are experienced as foods and other consumer packaged goods are marketed and sold throughout worldwide geographical locations and temperature zones. Product stability, consistency in quality, flavor, texture, form, extended shelf life and safety are some of the key attributes which this industry designs into its products. This is accomplished by developing specifications for formulations and manufacturing parameters. (F.I.M.S. is the terminology used to describe this activity).

Extensive experimentation and testing is often required to establish F.I.M.S. and critical process control points. Such experimentation is necessary to establish product consistency, product quality, process control procedures, regulatory compliance data and the development of final formulations and specifications. In cases where such work involves a SR&ED project, those activities that directly contribute to the resolution of the technological uncertainties, qualify as SR&ED support activities. Accordingly, the maintenance of records or other suitable evidence to establish this linkage is necessary.

Materials used by the food and consumer packaged goods industry in its wide range of products are primarily derived from agricultural or chemical sources which tend to exhibit chemical and physical variability. In the case of those materials derived from agricultural sources, this variability is largely caused by factors such as time of harvest, change in species variety, growing location and conditions, seasonal climatic variation, water availability, stress factors etc. In the case of other materials used for foods and consumer packaged goods (including preservatives, flavors, binders, fragrances etc., manufacturing or other source-specific factors may introduce differing degrees of material variability. Typically using standard practice based on pure model systems, the interaction of these raw materials with other ingredients, when processed, may produce the expected results. This would not be SR&ED. However, due to the inherent variability of a wide variety of the materials used in producing food and consumer packaged goods, unanticipated and unacceptable results can occur, creating technological challenges that cannot be resolved using standard practice or knowledge available to the claimant. This may result in the performance of a SR&ED project to resolve the scientific and technological uncertainties encountered.