The paper examines the determinants of product and process innovation in small food manufacturing firms. Small food manufacturing firms are generally viewed as operating in a mature and low technology area, where R&D activities are limited and patenting is rare. This research is based on an in-depth survey among 177 firms located in six rural areas in the EU. Four groups of firms are identified: non-innovators, traditionals, followers and leaders. Multiple logistic regression is developed to identify the drivers of product and process innovation in the firms. The results highlight the key role of the skills of the workforce, the firm's investment in know-how and the use of external sources of information. There is, however, no evidence of a significant relationship between the characteristics of the entrepreneur and the firm's innovation performance.