European food processors must consolidate and innovate to survive, according to a survey of EU fmcg suppliers by KMPG Corporate Finance. Senior executives from 80% of the 90 European food manufacturers questioned by KMPG said global retail consolidation was swinging the balance of power in favour of retailers and exerting downward price pressure on manufacturers. Successful companies would be those focusing on core business areas and developing these either organically or through acquisitions, said KPMG head of consumer markets Neil Austin. The UK Food and Drink Federation said that innovation would be key to survival. "There is always scope for innovation," said a spokeswoman. "The industry has already become incredibly responsive to consumer demand." Increased own label penetration, EDLP, pan European and global pricing, and higher transport and material costs were also hurting processors. The Food and Drink Federation said there had always been downward price pressure in the supply chain but suggested consumers were now driving this process. Manufacturers will increasingly have to cut out costs through economies of scale and improving supply chain efficiency by adopting new technology. {{NEWS }}