US biotechnology firm Senomyx has signed a two year collaborative research and license deal with Cadbury Adams USA for the discovery and commercialisation of new flavour ingredients in the gum confectionary area.
Cadbury will pay Senomyx research funding and specified payments on "the achievement of milestones" during the collaborative period.
And on hitting the market, the biotech firm will receive royalty payments based on sales of products using the new flavour ingredients.
After a string of bolt-on acquisitions Cadbury Schweppes is now the number two chewing gum player, behind the world's biggest producer of chewing gum Wrigley. But competing in saturated US and European markets merits intense R&D efforts to create innovative market-grabbing products.
In recent years the sugar-free gum trend has rescued flat sales for the gum industry.
In Spain alone a recent survey by market analysts AC Nielsen revealed that in 2001 sales of chewing gum rose by 10 per cent year-on-year to €121.9m in 2001, compared to sales of sugar confectionery that increased by 6.3 per cent year-on-year.
But there are signs that the next cash-generating trend could be functional foods.
In February this year Danish chewing gum maker Gumlink claimed to have formulated the world's first gum enriched with vitamins. The patent-pending product has two layers - chewing gum combined with a non-chewing gum layer that allows it to add ingredients that cannot support traditional gum manufacture processes.
While details of the Senomyx - Cadbury link-up have not been shared, the disclosure that the agreement will focus on discovering new flavour ingredients hints at functional food direction.
Last year, Wrigley used an essential oil to flavour one of its chewing gum brands: they claim the product can tackle the bacteria that causes bad breath.
"Our study shows that chewing gum can be a functional food, having a significant impact on oral hygiene over the short term, if it contains antimicrobial agents such as cinnamic aldehyde or other natural active compounds," said Christine Wu, professor of periodontics at the University of Chicago and lead author of the study.
The announcement this week from Senomyx is the latest in a string of research link-ups the biotech firm has succeeded in setting up with leading food makers, such as Nestle and Kraft.
"Our goal is to continue to leverage our discovery and development capabilities by establishing additional collaborations with market leading companies seeking to improve the nutritional profile of their products," Kent Snyder, chief executive officer of Senomyx said recently.