Regulators are cracking down on health claims on food, which can be a powerful marketing tool and allow firms to charge more for products with apparent nutritional enhancements.

"Our clinical development work ultimately provides the scientific evidence as to whether our ingredients, new products and reformulations are effective in delivering consumer benefits," Nestle technology chief Werner Bauer told a news conference.

"We are not trying to copy pharma here. We are extending the range and the role of food into the next century."

Nestle, which makes much of turnover from sweet treats like ice cream, KitKat bars and Nesquik chocolate milk, is trying to reinvent itself as "the world's leading nutrition, health and wellness company" to sell more high-margin "functional food".

"We clearly see a faster growth of the products that are positioned as nutrition, health and wellness products," said Thomas Beck, director of the Nestle Research Centre, which employs 700 scientists, including 40 at the new unit.

But food companies face a challenge to convince regulators of their health claims.

The U.S. Food and Drug Administration ruled in 2009 that Nestle had made misleading claims about the health benefits of some of its drinks for children, while European authorities have rejected a claim by French food giant Danone that its top-selling Actimel dairy drink reduced the risk of diarrhea.

The European Commission last month approved a list of 222 health claims on food based on scientific advice, but rejected 1,600 others and gave the food industry until the end of the year to remove misleading claims.

Rafael Crabbe, head of the new unit who used to work in the pharma industry, said Nestle scientists were following the same standards and methodologies for trials as drug companies although it was often harder to prove heath claims for food.

"When it comes to showing specific health benefits, food is a complex environment. The benefits of food are more subtle, more complicated," he said.

RESEARCH INTO HEALTH, TASTE

Crabbe's unit is coordinating more than 100 clinical studies worldwide involving more than 20,000 people, examining health problems such as obesity, diabetes and osteoporosis as well as the impact of sports nutrition on healthy people.

The unit is due to work closely with the Nestle Health Science company and research institute set up last year that is pushing a drive into medical foods at a time of growing overlap between "Big Pharma" and "Big Food" as many drug companies are investing in non-prescription products including nutrition.

The new building, accredited as a health facility, has the white walls and white coats of a hospital and includes equipment for testing patients' metabolism during exercise and rest as well as scanners for measuring bone density and fat mass.

However, unlike a hospital, it also has sensory booths for sampling food products, heat-measuring equipment for monitoring the mouth's response to spices and scanners for measuring electrical activity in the brain during taste tests.

David Bailey, a nutrition expert who helped the British cycling team prepare for the Beijing Olympics, is working on trials of a Nestle PowerBar snack which contains two types of carbohydrate designed to help athletes' performance.

"This is unique because we can deliver these two channels rather than one," an out-of-breath Bailey told journalists as he continued to pedal on an exercise bike.

Consultancy PriceWaterhouseCoopers has forecast that sales of "functional food" could grow at as much as 20 percent per year, well ahead of the rest of the industry.

Daniel Brelaz, the portly mayor of Lausanne who cut a red ribbon to open the new unit, joked that he would not be so out of shape if he ate more healthy food.

Asked whether the best contribution Nestle could make to improving health would be to sell fewer of the KitKats and chocolates on offer at its news conference, Beck said the company had long been trying to cut sugar and salt in its products but consumers' tastes only adjusted gradually.

"What happens if we reduce sugar too dramatically or too fast is that consumers aren't going to use our products anymore and that won't have any health benefits. Or consumers re-add sugar," said Beck, a biochemist by training.

"For both diabetes and obesity, it is not the individual food product, it is very often the whole diet ... So an individual product like a KitKat can play a very good role in a healthy diet."

(Editing by Mark Potter)

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