Building a fundable case for a food manufacturing scale-up

What was broken

A chef-led packaged-food brand with early revenue needed growth capital to expand distribution.

What we did

CapEasy structured the seed grant application — traction and unit-economics framing, a utilisation plan, and projections — and aligned the proposal to the scheme’s eligibility rules.

A seed grant approval is the reviewing committee’s sanction; actual disbursement follows the scheme’s due-diligence and compliance milestones and is not guaranteed.

Where it landed

The brand secured a public seed fund approval.

Two funding tracks for an Australian food manufacturer: the R&DTI and everything else

The R&D Tax Incentive (R&DTI) is the piece that runs every year rather than opening in a named round. It is jointly administered — the Department of Industry, Science and Resources registers the R&D activities, the ATO processes the expenditure claim — on a self-assessment basis, and registration is due within 10 months of the end of the income year the activity happened in. Under the current rates, a company with aggregated turnover under $20 million gets a refundable offset equal to its corporate tax rate plus an 18.5% premium; a company at or above that turnover gets a non-refundable offset, at a lower premium on R&D expenditure up to 2% of total expenditure and a higher premium above that. Claimable R&D expenditure caps at $150 million a year, and the offset only applies once notional R&D deductions reach a $20,000 minimum for the year. The government’s 2026–27 Budget announced changes to the scheme starting 1 July 2028 — details to confirm with your registered agent as the date approaches, not something to plan a 2026 claim around.

Sector-specific grants sit on top of that and behave nothing like it. The Manufacturing Modernisation Fund — which lists food and beverage among its priority areas — is closed to new applications. The Industry Growth Program — whose priority sectors include agriculture, forestry and fisheries value-add, which is where food manufacturing sits — is currently paused pending a program redesign. None of that is a reason to wait: it is the reason to check the business.gov.au grants and programs finder for what is actually open before a scale-up plan gets built around a program that has since closed or paused.

What counts as R&D on a food production line — and what doesn’t

business.gov.au’s agrifood sector guide draws the line most food manufacturers get wrong on the shop floor. Routine testing "does not meet the requirements of a core R&D activity" because it "does not aim to resolve a technical uncertainty" and involves no hypothesis-led experiment — shelf-life monitoring, nutritional testing and contaminant testing are named as ineligible on their own, however necessary they are to running a compliant food business day to day. Anything that runs on the production line faces a second test, because it doubles as making the product: the guide asks you to show the dominant purpose of the activity is resolving a technical uncertainty, not producing the batch.

The guide’s own worked example is the one that trips up scale-up work specifically — a formulation trial is ineligible when "the outcome could be determined from current knowledge, information or experience," even where the precise result still varies batch to batch, because the relationship is already well established. The same trial becomes eligible core R&D when the outcome genuinely "cannot be determined in advance from current knowledge" and reproducing a published method, or running a comparative trial to confirm what the literature already shows, does not clear that bar on its own — it validates existing knowledge rather than generating new knowledge.

• Routine QA and shelf-life, nutritional or contaminant testing — ineligible by default, no matter how essential to the business
• A scale-up or reformulation trial confirming a known, well-established relationship — ineligible
• A trial where the outcome cannot be predicted from current expert knowledge, run as a genuine hypothesis-led experiment — eligible
• Any activity on the production line needs a stated dominant purpose — resolving the uncertainty, not producing the saleable batch

The project-accounting record set a claim or an application needs

business.gov.au’s record-keeping guidance for the R&DTI is explicit that records "should be created at the time the activity is conducted," must be kept for five years after the expenditure is claimed, and must include "documents that support any apportionment methods used" — not just what the total R&D spend was, but which specific activity each dollar relates to. For a food manufacturer that means separating ingredient cost, line time and lab or QA hours spent on an eligible trial from the ordinary cost of running that same line, on the same shift, for saleable production — coded differently depending on which activity it actually served, decided as it happens rather than reconstructed the week before the 10-month registration deadline.

The same discipline carries into a sector grant application: a utilisation plan tied to the modernisation or scale-up milestones, unit economics that hold up against the projections, and a cost allocation the reviewer can trace — exactly the traction, unit-economics and projections framing this engagement built for a seed-fund application. CapEasy’s part is that plan, the schedule and the ledger tied to the activity, month by month. The eligibility call on which activities qualify as R&D, the registration with the Department, and the lodgment itself are prepared for your registered BAS or tax agent, working from the Department’s and the ATO’s guidance — R&DTI is a self-assessment program, and registration confirmation is not an eligibility finding.