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Challenge
The client has sought to develop its lines of functional soft beverages and expand further into international markets.
Solution
RSM helped the client in securing financing and government development incentives, as well as helping to support the development of its operational strategy and resource management plan.
Success
RSM in Italy tailored its financial advisory services to catalyse the client’s transformation, enabling it to leverage its heritage while embracing future opportunities in a competitive global market.
Client overview
RSM’s client in Italy is a family-owned company with a legacy that dates back over 125 years. The company operates in the alcohol and spirits industry, with a recent expansion into functional soft beverages. Led by the youngest generation of the family, the company specialises in producing liqueurs, spirits, and bottling denatured alcohol.
Background
The company has recently sought to develop a line of functional soft beverages and expand further into international markets. RSM was engaged to assist the client with securing financing and government incentives, as well as helping to support the development of its operational strategy and resource management plan.
Our project objectives
- Secure funding for new product development initiatives and internationalisation.
- Establish process for identifying and completing applications to tax credit schemes and public funding opportunities to support research and development.
- Achieve new validated products and company growth in terms of turnover and market size.
Our approach
RSM adopted a structured approach to achieve the project objectives:
- Strategic partnership: RSM facilitated a collaboration between the client and the pharmaceutical department of an esteemed university, creating a synergy between industry and academia. By strategically combining academic expertise with industry knowledge and securing appropriate financing, RSM helped the client to achieve significant growth, product diversification, and technological advancement.
- Government incentives: RSM reviewed the landscape of tax credits and public provisions applicable to the client’s activities, particularly focusing on research and development, digital integration, and business expansion. RSM aligned the client’s ongoing projects with eligible tax credit schemes and public funding opportunities and worked on preparing and submitting the documentation for credit claims and grant applications.
- NPD and expansion into functional beverages: RSM assisted in implementing R&D projects that resulted in new products with international market potential and helped to develop and validate six new lines of functional soft beverages, opening up new international markets. RSM also secured funding for the client to participate in international trade fairs, creating opportunities for the client to increase brand exposure on an international stage.
- In-house R&D capabilities: RSM helped the client to overhaul the company's lab, enhancing its research and development capabilities. A 4.0 chemical lab was established, positioning the client to perform R&D on demand for other companies.
- Digital integration: RSM supported the implementation of various digital integration initiatives, including digital business processes, training programmes to enhance digital skills and the implementation of TeamSystem software. This digital transformation supported the client's ability to innovate, expand into new markets, and respond more effectively to changing industry dynamics.
Challenges
- Unsuccessful product development: Some products did not pass the R&D phase, particularly due to poor taste for the market which could have wasted resources invested in research and development. By implementing a robust R&D tax credit system, RSM helped offset the financial impact of failed product developments.
- Entering new markets: As an alcohol and spirits company, our client sought to expand into the functional soft beverage industry which presented challenges in developing expertise in a new product category and adapting production processes and facilities. By securing significant funding through the I-Pro Med project and supporting the establishment of a 4.0 chemical lab, RSM helped to enhance the company's research capabilities for both traditional and new product lines.
How success was measured
- Significant funding secured: RSM secured more than €1,000,000 in co-financing for the client across three significant projects enabling the client’s expansion into the functional soft beverage industry, enhancing the client’s international visibility and improving the production facility’s energy efficiency.
- Successful R&D tax credit applications: RSM successfully applied for ~€400,000 in R&D tax credits over 6 years on behalf of the client. The tax credits were in support of digital transformation and training initiatives, new product development and plant expansion projects.
- New revenue stream: RSM helped the client to secure funding to improve its in-house research lab. With a fully equipped 4.0 chemical lab the client can now provide on-demand research and development services for other beverage brands, acting as a new source of revenue to complement its traditional streams.
- New product launches: RSM’s assistance in successfully introducing new products like the line of functional beverages has equipped the client to capitalise on changing consumer preferences and enhanced the client’s revenue base and international appeal.
Creating a unique offering
RSM in Italy tailored its financial advisory services to catalyse the client’s transformation, enabling it to leverage its heritage while embracing future opportunities in a competitive global market. Through careful financial planning, tax credit utilisation, and strategic project implementation, RSM in Italy helped the client to navigate the Covid-19 pandemic and emerge stronger, with enhanced research capabilities, a diversified product portfolio, and improved operational efficiency.
