Cadbury Schweppes is making inroads into the low-sugar sweets and chocolate market as the number of health-conscious consumers continues to rise.
The troubled firm, which last week announced it would be cutting jobs as part of a global shake-up of its confectionery arm, will boost investment in science and technology from £78 million to £126 million as part of the drive, reports suggest.
It will concentrate on developing artificial sweeteners, flavourings and the reformulation of existing products.
The company, which is on the brink of launching low-calorie versions of its Maynards Wine Gums and Bassetts Allsorts,
intends to lift its investment from one per cent of total confectionery revenues, which stand at £7.8 billion, to 1.5 per cent by 2009 when they are expected to reach £8.6 billion. This will result in more than £500 million invested into research over the next five years. The announcement came as the head of the UK's largest unit trust attacked Cadbury's decision to split its operations.
Andrew Bolton, fund manager for Fidelity Special Situations Fund, said the firm had bowed to pressure from minority shareholders.
In a comment piece for a national newspaper, Mr Bolton criticised the influence on Cadbury from US hedge fund Trian, cofounded by US investor Nelson Peltz.
Trian bought a three per cent share in Cadbury on March 13. On March 15, the firm announced it would be separating its Americas drinks arm from its confectionary business.
Since then Cadbury has seen a flurry of restructuring activity. Last week the firm announced a ten per cent cut in its 100-strong senior management team as part of the reorganisation of its confectionery business.
It is due to announce more redundancies and job losses globally along with a trading statement on June 19.
The UK Cadbury Bassett unit, which includes the historic Bournville plant in Birmingham, is not expected to be affected.
Over the weekend Cadbury was also reported to be putting its 70-year old Butterkist popcorn brand up for sale.