The food industry would have to innovate to survive in a growing global competitive environment, the managing director designate of Avonmore Waterford Group said yesterday.

Mr Ned O'Sullivan, who was addressing a Publicity Club function in Dublin, said the industry was going through profound change and faced immense challenges with the Agenda 2000 proposals for EU reform.

"We are living in a very regulated, protected and subsidised environment at the moment. That will change and we will be much more open to world prices. That will force Irish businesses in general to innovate or we will not be there," he said.

Managers would have to become astute in reading the international markets, in developing new markets and in promoting product development.

He said AWG's new name, Glanbia, which is to be approved by shareholders, was adopted to leave behind "the pain and grief and suffering" of the merger rationalisation process. It would also promote the group as a whole by moving away from the multiple subsidiary companies it operated under.

Glanbia would stand for innovation, agility, sharpness and market performance in five years, he predicted.

The group had come together to achieve economies of scale, market presence and provide resources for research and development. It had a £2.2 billion turnover and employed 7,000 people.

But it would be difficult for companies to achieve price increases for the foreseeable future.

"We as consumers have reached a collective consciousness that we are not any longer willing to pay higher prices for essentially the same products," he said.

To achieve greater revenues, companies would have to go back to manufacturing.

They could expect the trend towards pre-prepared meals to continue. Ireland was following the lead of the US where the average time spent preparing a meal was now 20 minutes, compared to two hours 20 years ago.

Consumers were looking for variety, taste, safety and newness. "They are looking for innovation," he said.