SAPPORO HOLDINGS LIMITED
Annual Report 2015
Taking
the Next Step
“As an intrinsic part of people’s lives,
Sapporo will contribute
to the evolution of creative,
enriching and rewarding lifestyles”
Management Philosophy
The Sapporo Shining Star is a motif representing a polestar. The Group has used this logo since its predecessor, the Kaitakushi (the national government Hokkaido development commission) Brewery, was established in 1876. It is a symbol of the pioneering spirit in which the Group was founded. About the Group’s corporate logo, the Sapporo Shining Star
The Sapporo Group strives to maintain integrity
in corporate conduct that reinforces stakeholder trust and
aims to achieve continuous growth in corporate value.
Fundamental Management PolicyStatements in this annual report with respect to the Company’s plans, strategies, forecasts and other statements that are not historical facts are forward-looking statements that are based on management’s judgment in light of currently available information. Factors that could cause actual results to differ materially from our earnings forecasts include, without limitation, global economic conditions, our response to market demand for and competitive pricing pressure on products and services and currency exchange rate fluctuations.
Forward-looking Statements
All figures in this annual report are rounded to the nearest applicable unit.
01 Profile
02 Our History of Development
over 140 Years
Taking the Next Step
04 Our Business
06 Financial Highlights
08 To Our Stakeholders
13 Value Creation for the Future
14 Performance Review and Plan
14 Japanese Alcoholic Beverages
16 International
18 Food & Soft Drinks
20 Restaurants
21 Real Estate
22 CSR Activities
28 Corporate Governance
32 Board of Directors and Audit &
Supervisory Board Members
34 Financial Section
69 Corporate Data
Tak ing
th e N
ex t S
te p
140 th
The Sapporo Group has been brewing beer since
1876. Throughout its history, the Group has diligently
created products using only carefully selected
ingredients. In the areas of food and surroundings,
the Group continues to provide products and services
designed to satisfy customers in Japan and overseas,
especially North America and Southeast Asia.
Sapporo Group
The Group posted consolidated net sales of ¥533.7
billion, up 2.9% year on year. The result mainly reflected
higher sales volumes in the Food & Soft Drinks segment
and the new consolidation of Country Pure Foods, Inc.
in the International segment. These factors outweighed
a year-on-year decline in sales volumes of beer-type
beverages in the Japanese Alcoholic Beverages
segment. Consolidated operating income declined
5.3% year on year; however, all operations achieved
profitability for a result of ¥14.0 billion.
2015 Business Results
1876
Founded
7,484
(Consolidated)
Numberof employees
117
(Parent company)
Consolidated subsidiaries and equity-method affiliates
54
Consolidated
subsidiaries
2
Equity-method
affiliates
¥ 533.7 billion
Net sales
( +2.9 % YoY)
¥ 14.0 billion
Operating income
( –5.3 % YoY)
The Sapporo Group has marked
140 years since its foundation.
The Group will continue to
leverage the qualities of its
founding DNA to maximize
Group synergies and strive for
sustained growth.
Taking the Next Step
1985: Renamed Sapporo Beverage Co., Ltd. 1957: Established
Kokusai Inryo Co., Ltd., which later became Sapporo Beverage Co., Ltd. Citron remains popular today.
The launch of Citron (Soda) marked the Sapporo Group’s entry into the soft drinks business.
Started manufacture
and sales of Citron
1906
1993: Completed construction of the Sapporo Factory on the former site of SAPPORO BREWERIES’ Sapporo Brewery
1994: Completed construction of Yebisu Garden Place on the former site of SAPPORO BREWERIES’ Ebisu Brewery
Provides real estate services starting from real estate development of former factory sites. Provides a stable base that contributes significantly to the Group’s growth
Established Seiwa
Real Estate Co., Ltd.
1988
1890: Launched Yebisu Beer
1964: Company name changed to SAPPORO BREWERIES LIMITED
Established
the Kaitakushi
Brewery
1876
Established
Japan Beer
Brewery Company
1887
1877: Launched Sapporo Lager Beer, the first product
1956: Revival of Sapporo Beer The Kaitakushi Brewery
was launched in Sapporo as a government-operated brewery of the Hokkaido Development Commission.
Japan Beer Brewery Company was established in Ginza, Tokyo.
1979: Changed Company name to SAPPORO LION LIMITED 1934: Opened the Beer Hall
Lion Ginza 7-Chome, now the oldest existing beer hall in Japan The highly modern beer hall has flourished
since its opening. More than 100 years have passed since it was opened in Ginza. Its history of continued development is also a history of continuing support from customers.
Opened YEBISU BEER HALL,
Japan’s first beer hall
1899
SAPPORO BREWERIES started overseas expansion in this year. Later, it expanded sales channels throughout North America and Southeast Asia, creating a foundation for further growth.
Began exporting beer
to the United States
1964
1984: Established SAPPORO
U.S.A. INC. and strengthened the foothold for business expansion in North America
Food & Soft Drinks
2011: Made POKKA CORPORATION a wholly owned subsidiary
2013: Integrated business with POKKA CORPORATION and started operations as POKKA SAPPORO Food & Beverage Ltd.
2014: Completed construction of the new POKKA Malaysia Factory following the main factory in Singapore, and started operations
Real Estate
2014: Completed construction of Ebisu First Square
June 2016 (Scheduled): Complete construction of Ginza Place
Japanese Alcoholic
Beverages
2006: Entered the shochu business
2010: Opened the Museum of Yebisu Beer in response to continued support
2012: Opened the Grande Polaire Katsunuma Winery, eyeing the growing market for fine wines
Restaurants
2009: Opened the first YEBISU BAR jointly developed with SAPPORO BREWERIES in the Ginza Corridor district
2013: Opened the first GINZA LION BEER HALL in Singapore, using the strength of the beer hall format for overseas development
International
2006: Made SLEEMAN BREWERIES LTD. into a consolidated subsidiary and focused on strengthening the SLEEMAN brand
2010: Made SAPPORO VIETNAM LIMITED into a consolidated subsidiary and expanded business in Southeast Asia
Started operation
under a holding company framework with SAPPORO HOLDINGS LIMITED as a pure holding company
2003
“Creating value in food” means providing a wide range of food products with genuine value
tailored to customer demand, in line with the key principles of safety, security and health. “Creating
comfortable surroundings” means providing relaxed and appealing venues as part of the general
urban fabric comprising restaurants and bars, commercial precincts, office buildings and residential
districts. The Group’s businesses are divided into five segments: Japanese Alcoholic Beverages,
International, Food & Soft Drinks, Restaurants, and Real Estate. The Japanese Alcoholic Beverages and
Real Estate segments are positioned as stable earnings pillars, while the Group also promotes the
International and Food & Soft Drinks segments as future growth drivers.
Business segment
Operating income
(billions of yen) YoY
Strength, market, etc. Net sales
(billions of yen) YoY
Business overview
Creating value in food
The core domain driving the Group’s dynamic growth
Pillar contributing stable earnings
Japanese Alcoholic
Beverages
Growth driver
International
With a vision of “Seek No. 1 by accumulating one-of-a-kind products,” the Group is focused mainly on the beer business, but is also involved in other areas, including the wine and spirits business and the Japanese liquors business. The Group will continue to propose products and services that represent the distinctive Sapporo value.
Main Brands
Beer and beer-type beverages: Yebisu Beer, Sapporo Draft Beer Black Label, Mugi to Hop The gold, Goku Zero Wine: Grande Polaire, Penfolds Champagne: Taittinger
Shochu: Shochu Kokuimo (Imo Shochu) Spirits: Bacardi, Dewar’s
273.7 (2.6)%
8.6 (15.3)%
The Group operates the International business offering alcoholic beverages and soft drinks, mainly in North America and Southeast Asia. In the North American market, we are aiming to take another leap forward, while working to expand our beer business in Vietnam and use it as a base for strengthening our exports to surrounding countries.
Main Brands
SAPPORO PREMIUM, SLEEMAN Main Sales Areas
North America, Canada, Vietnam, South Korea, Australia, Singapore
70.5 41.9%
0.2 (10.8)%
Creating comfortable surroundings
The business domain expected to contribute stable profits backed by prime properties Share
of consolidated sales
3.9
%5.1
%25.4
%51.3
%13.2
%1.1
%Japanese Alcoholic Beverages International Food & Soft Drinks Restaurants Real Estate Other
¥ 533.7
billion
Net sales
Food & Soft Drinks
To become a third pillar for the Group
Pillar contributing stable earnings
Real Estate
Contact point with customers
Restaurants
The Group operates its Food & Soft Drinks business primarily in Japan and Southeast Asia. It will carefully nurture the bonds it has built up with customers as it continues to create a stream of delicious new products that enrich and brighten people’s lives.
Main Brands
Soft drinks: Kireto Lemon, Ribbon, GEROLSTEINER (natural mineral water), aromax (canned coffee)
Soups: Jikkuri Kotokoto
Lemon-based products: Pokka Lemon 100 Restaurants: Café de Crié (coffee shop)
Number of Café de Crié Outlets 189 (as of December 31, 2015)
Main Sales Areas
Japan, Singapore, Malaysia, Indonesia, Myanmar
135.7 1.7%
0.4 258.5%
The Group operates Japan’s largest beer hall chains, GINZA LION and YEBISU BAR, along with various restaurants. In addition to providing delicious draft beer, we will continue to develop menus based on the theme of “safety, security, authenticity, and health.”
Main Brands
GINZA LION BEER HALL, YEBISU BAR Number of Outlets
178 in Japan, 14 overseas (As of December 31, 2015)
27.0 (0.5)%
0.5 72.2%
The Group’s Real Estate segment includes leasing, management, operation, and development. We operate and manage three commercial complexes—Yebisu Garden Place, Sapporo Factory, and GINZA PLACE (scheduled to open in summer 2016)—as well as office buildings and others. We will continue to maintain high occupancy rates and strive to increase rent levels.
Main Facilities
Yebisu Garden Place, Sapporo Factory Main Areas
Ebisu, Ginza, Sapporo
20.9 (3.0)%
8.3 7.6%
Millions of yen
Years ended December 31
2007 2008 2009 2010
For the Year:
Net sales
Including tax ¥449,011 ¥414,558 ¥387,534 ¥389,245
Excluding tax 309,794 284,412 264,604 269,874
Operating income 12,363 14,685 12,896 15,403
Operating income before goodwill amortization 13,232 15,553 13,923 16,576
EBITDA 37,759 37,158 36,470 39,080
Net income 5,509 7,640 4,535 10,773
Capital expenditures (cash basis) 19,884 27,342 21,910 19,801
Depreciation and amortization 24,527 21,605 22,547 22,504
Goodwill amortization 870 867 1,027 1,173
Cash flows from operating activities 30,691 22,292 12,454 27,431
Free cash flows 17,196 39,148 (19,773) 24,836
At Year End:
Net assets 125,189 116,862 118,591 126,645
Total assets 561,859 527,287 506,875 494,798
Financial liabilities 212,464 189,252 196,794 181,335
Other Indicators:
Overseas sales ratio 9.0% 8.8% 8.5% 9.4%
Operating income to net sales
Excluding tax 4.0% 5.2% 4.9% 5.7%
Excluding tax; before goodwill amortization 4.3% 5.5% 5.3% 6.1%
Debt-to-equity ratio (times) 1.7 1.6 1.7 1.4
Equity ratio 22.3% 22.1% 23.4% 25.3%
ROE 4.6% 6.3% 3.9% 8.9%
ROE (before goodwill amortization) 5.3% 7.0% 4.7% 9.8%
Note: Yen amounts have been translated into U.S. dollar amounts at the rate of ¥120.54=U.S.$1.00, the exchange rate prevailing on December 31, 2015.
(¥ Million)
389,245 387,534 414,558
449,011 449,453
492,491509,835 518,741533,749
0 100,000 200,000 300,000 400,000 500,000 600,000
2015 2014 2013 2012 2011 2010 2009 2008 2007
(¥ Million)
269,874 264,604 284,412 309,794
336,838
379,793395,377 401,814418,320
0 100,000 200,000 300,000 400,000 500,000
2015 2014 2013 2012 2011 2010 2009 2008 2007
Net sales (including tax) Net sales (excluding tax)
Thousands of U.S. dollars
2011 2012 2013 2014 2015 2016
(forecast)2015
¥449,453 ¥492,491 ¥509,835 ¥518,741 ¥533,749 ¥565,400 $4,427,981
336,838 379,793 395,377 401,814 418,320 445,208 3,470,381
18,884 14,415 15,344 14,729 13,950 21,100 115,730
21,993 18,294 19,330 18,493 18,103 25,000 150,186
46,477 44,100 44,388 42,974 42,327 49,000 351,149
3,165 5,394 9,452 340 6,109 10,500 50,679
13,423 53,870 13,769 19,133 20,340 19,500 168,739
24,482 25,805 25,059 24,481 24,224 24,000 200,963
3,109 3,879 3,985 3,764 4,153 3,900 34,456
22,313 29,618 32,862 22,284 35,266 37,100 292,565
(28,579) (29,868) 19,594 5,055 25,510 9,500 211,632
124,775 134,947 155,367 160,005 163,822 — 1,359,072
550,784 597,636 616,753 625,439 620,388 — 5,146,740
219,168 257,647 247,828 247,557 234,742 227,100 1,947,417
11.0% 14.1% 18.3% 19.2% 22.6% 23.5%
5.6% 3.8% 3.9% 3.7% 3.3% 4.7%
6.5% 4.8% 4.9% 4.6% 4.3% 5.6%
1.8 1.9 1.6 1.5 1.4 1.3
22.4% 22.1% 24.6% 25.0% 25.5% —
2.5% 4.2% 6.7% 0.2% 3.9% 6.5%
5.1% 7.3% 9.5% 2.7% 6.5% 8.9%
(¥ Million)
16,576 13,923 15,553 13,232
21,993
18,294 19,330 18,493 18,103
0 5,000 10,000 15,000 20,000 25,000
0 2 4 6 8 10 (%)
Operating income to net sales (excluding tax) Operating income
2015 2014 2013 2012 2011 2010 2009 2008 2007
(¥ Million)
10,773
4,535 7,640 5,509
3,165 5,394
9,452
340 6,109
(%)
ROE Net income
0 3,000 6,000 9,000 12,000
0 3 6 9 12
2013 2012 2011 2010 2009 2008
2007 2014 2015
Operating income and
Operating income to net sales (excluding tax) Net income and ROE
Note: Figures are before goodwill amortization. Note: ROE is before goodwill amortization.
As we mark the 140th anniversary
of our founding, we, the Sapporo
Group, are looking ahead to our
150th anniversary, aiming to grow
even further over the next ten years
and increase our presence
as a distinctive food company group.
Tsutomu Kamijo
President, Representative Director
and Group CEO
A New Start Leveraging the Qualities of Our Founding DNA
Profit Growth and Profit Management
(Consolidated Operating Income) (¥ Billion)12.012.9 12.4
12.5 13.5
14.7
13.5 15.4
18.018.9 20.0
14.4 15.3 15.3 15.0 14.7 16.3
14.0
Initial target Result 0
5 10 15 20
25 Impact of competitive sales
promotions within the industry in reaction to the earthquake disaster
Current fiscal year
2015 2014
2013 2012
2011 2010
2009 2008
2007
Steady profit growth
after the financial crisis
At Sapporo Holdings, we look forward to marking our 140th anniversary in September 2016.
The roots of our company stretch back to 1876, with the construction of the Kaitakushi
Brewery by Hokkaido development commission. Since then, we have continuously researched
selective breeding and improved cultivation methods of barley suitable for brewing beer.
This was the origin of the Collaborative Contract Farming System that we operate today, and
it is also our DNA. We created a number of hit products beloved by customers, such as Yebisu
and Black Label. We have also provided leading products for their times, such as Hokkaido
Namashibori and Draft One. Since entering the new millennium, we have continued to
expand our overseas operations aggressively in North America and Southeast Asia. In 2011,
we expanded our presence in the food industry through a business integration with POKKA
CORPORATION, aiming to consolidate our position as a distinctive food company group.
Looking back over a long, 140-year history, I feel profoundly moved and have a great sense
of responsibility as the Group CEO. As we move forward, we will make every effort to achieve
steady growth, leveraging the qualities of our founding DNA.
This year is the final year of our New Management Framework, which we announced
in 2007. Under the Group’s strategy of creating high-value-added products and services,
we are investing in the Japanese Alcoholic Beverages segment and Real Estate segment,
which produce stable income. We are also making investments for future growth in the
International segment and Food & Soft Drinks segment, and are increasing our investments
in R&D to foster future growth.
Right now, we aim to be a group of companies that is essential for customers to enjoy rich
lives throughout the world by continuing to create and supply new products and services, in
an effort to become No. 1 in the market. To this end, we are currently formulating our next
long-term management framework targeting 2026, the year of our 150th anniversary. We
plan to announce this in autumn.
In fiscal 2015, the Group achieved operating profitability in all of its segments for a second
consecutive year and strengthened its business portfolio. Consolidated net income also
recovered, and we recorded ROE of 6.5% (before goodwill amortization). This is the successful
result of concentrating our resources on our strengths in each segment. In the Japanese
Alcoholic Beverages segment, we continued to invest in our core brands. In particular, we
renewed our mainstay brand Sapporo Draft Beer Black Label, which was a growth driver
alongside our Yebisu brand. Growth in lemon-based products with the expansion of the
Kireto Lemon lineup in the Food & Soft Drinks segment, and high occupancy rates at our main
rental properties, such as Yebisu Garden Place, in the Real Estate segment also contributed to
the overall outcome.
As a result of these efforts, the Sapporo Group posted consolidated net sales of ¥533.7
billion in fiscal 2015, up ¥15.0 billion, or 2.9%, from fiscal 2014. Consolidated operating
income declined by ¥0.8 billion, or 5.3%, to ¥14.0 billion. Consolidated net income was ¥6.1
billion, up ¥5.8 billion, partly reflecting a gain on sales of property, plant and equipment of
¥7.5 billion, which was offset by a loss on impairment of property, plant and equipment of
¥6.0 billion and a loss on devaluation of investment securities of ¥1.8 billion.
In an effort to develop our future strategies, we also made an effort to grasp the issues for
each segment and took our first steps towards overcoming them. For example, to promote
product diversification in the Japanese Alcoholic Beverages segment, we strengthened our
Japanese wine and imported wine brands. In the beer business in Vietnam, we conducted a
product renewal with the aim of moving to the next growth stage.
Fiscal 2015—Achieved Operating Profitability in All Segments
for a Second Consecutive Year
Operating Income 2013–2016
Note: Assumed exchange rates: 2016: US$ = ¥126.00, CAN$ = ¥96.00
2013 2014 2015 2016 (forecast)
Japanese Alcoholic Beverages
¥ 9,902 ¥10,193 ¥8,635 ¥11,100
International
1,208 173 154 900
Food & Soft Drinks
(1,483) 121 434 1,700
Restaurants
415 303 523 1,300
Real Estate
8,686 7,696 8,282 10,000
(¥ Million)
Outlook for 2016
The Company is forecasting consolidated operating income of ¥21.1 billion for fiscal 2016,
with consolidated net income of ¥10.5 billion. Looking ahead, we plan to continue achieving
consolidated operating income at the ¥20.0 billion level and consolidated net income at the
¥10.0 billion level. We are confident that we will be able to maintain this level by expanding
as a distinctive food company group in the food sector as well as in alcoholic beverages, and
achieving further growth centered on the North American and Southeast Asian markets.
If there is one challenge to be met, I believe it is securing human resources for our growth
areas. One measure for this is to promote diversity. We will establish systems for developing
global personnel through our plan to promote personnel exchanges among our local
subsidiaries in countries around the world.
Our outlook for each segment is as follows:
In beer and beer-type beverages, for the first year of our campaign to strengthen beer, we aim to bolster the brand value of our core Sapporo Draft Beer Black Label and Yebisu Beer brands in line with our vision of “Seek No. 1 by accumulating one-of-a-kind products.” We are also expecting to widen the circle of new-genre and happoshu consumers by developing and nurturing products that meet customers’ needs. We have already conducted a renewal of Mugi to Hop The gold, which is seeing strong shipments. We will promote our product diversification strategy in the Japanese Alcoholic Beverages segment, strengthening our range of fine wines, such as the Japanese wine Grande Polaire, and leveraging the brand power of Penfolds imported wine, Taittinger champagne, and others to increase profitability.
Japanese Alcoholic Beverages Segment
In North America, we will strengthen our premium brands for the Canadian market, and look to sustain growth of the SLEEMAN brand. In the U.S. market, we will focus on enhancing the presence of the SAPPORO PREMIUM brand for the Asian-American market.
In the Vietnamese market, we will maximize the favorable impact of the Sapporo Premium relaunch, bolster our brand strength, and expand our sales area.
International Segment
2016 Targets Based on Current Businesses
Note: Assumed exchange rates: 2016: US$ = ¥126.00, CAN$ = ¥96.00
(¥ Billion) 2016 New Management
Framework
2014 2015 2016 forecast
Net sales (including liquor tax)
¥518.7 ¥533.7 ¥565.4 ¥600.0
Operating income
14.7 14.0 21.1
Operating income (before goodwill amortization)
18.5 18.1 25.0 40.0
Net income
0.3 6.1 10.5 —
Debt-to-equity ratio (times)
1.5 1.4 1.3 around 1.0
ROE
0.2% 3.9% 6.5% 8.0%
or higher
ROE (before goodwill amortization)
2.7% 6.5% 8.9%
In this segment, we are planning to strengthen our mainstay brands in lemon-based products and soups, for instance by launching new products offering unique value from the Kireto Lemon brand. We are also developing a foundation for growth and reforming our cost structure by ensuring low-cost operations.
Food & Soft Drinks Segment
We will seek to improve store efficiency in Japan and overseas, while also aspiring to be the world’s No. 1 beer hall chain by delivering 100% satisfaction to customers. In Japan, we are currently opening new outlets, with a primary emphasis on GINZA LION and YEBISU BAR outlets, including the reopening of our large-scale flagship outlet which had been closed for two years. Overseas, we will examine expanding into new regions of operation centered on the GINZA LION BEER HALL format.
Restaurants Segment
In the Real Estate segment, we will continue to enhance the corporate brand by increasing the value of our properties, and will work to maintain a high occupancy rate and bolster rent levels. At GINZA PLACE, we are steadily making preparations for the start of operations in the summer of 2016, with plans to contribute to revenues from an early stage.
Real Estate Segment
Providing appropriate returns to shareholders is one of our key management priorities. Our
basic policy is to maintain a stable dividend. For fiscal 2015, we paid an annual dividend of ¥7
per share, the same as in fiscal 2014. For the dividend from surplus for fiscal 2016, we aim to
pay an annual dividend of ¥7 or greater per share by steadily executing our management plan,
while making strategic investments and strengthening our financial foundation.
Japanese stock exchanges aim to consolidate 100 shares of common stock of listed
domestic companies into single trading units. To comply with this aim and adjust its trading
unit to an appropriate level, Sapporo Holdings has decided to change the trading unit of
its shares to 100 shares from July 1, 2016, and simultaneously conduct a consolidation of its
common stock at a ratio of one share for five shares. In conjunction with this, the per-share
dividend is expected to become ¥35.
In 2026, the Sapporo Group will mark its 150th anniversary. We are taking steps to prepare
for this milestone and to realize our vision for the kind of company we should be. We will strive
to strengthen corporate governance even further; position CSR-focused management as one
of the key strategies for realizing the sustained growth of the Group; and promote initiatives on
“quality of food and spaces,” “fair and just dealings,” “conservation of the global environment,”
“harmonious coexistence with society,” “development of human resources and enhancement
of the working environment,” and “sound corporate management.” In particular, as a food
company group, we will attach importance to “CSR in quality of food and spaces,” aiming to be
a company that provides security and safety while delighting customers.
As we accelerate our growth investments and progress to 150 years, 160 years, and further
into the future, we will strive to increase our presence as a distinctive food company group.
We kindly ask for your continued understanding and support.
To Our Shareholders
Sapporo Innovation Labo A Group-wide R&D Framework
Create new value
Seek out the origin of delicious tastes
Create delicious tastes Learn
about customers
Guarantee delicious tastes Sapporo Breweries
Research and
Development Institution for Alcoholic Beverages Bio resources Research and
Development Department Product and Technology
Innovation Department
Sapporo Holdings Frontier Laboratories for
Value Creation
POKKA SAPPORO Product R&D Lab Advanced R&D of
Fundamental Technology Lab
We will continue to innovate and create,
aiming to bring happiness to customers through food.
Value Creation for the Future
The Sapporo Group will accelerate R&D activities and merge the current R&D assets and new technologies under the initiative of Sapporo Holdings. To execute R&D activities across Sapporo Group companies like POKKA SAPPORO Food & Beverage Ltd. or Sapporo Breweries Ltd., we established Sapporo Innovation Labo in March 2014. Subsequently, in March 2015, we established a new R&D group named the Food Value Development Group under the Group R&D Strategy Department in Sapporo Holdings to execute unconventional R&D. In April 2016, we established new laboratories named “Frontier Laboratories for Value Creation.” We will evolve our group R&D and promote “New food-value creation” for the future.
In 2001, we discovered the barley with no LOX-1 in collaboration with Okayama University and started using it for barley breeding. We encountered many issues while attempting to cultivate new barley varieties, but finally succeeded in developing the first LOX-1-less barley variety in North America, named CDC Polar Star, while collaborating with the University of Saskatchewan in Canada in 2008. Sapporo Breweries has been using “fresh- tasting, long-lasting” CDC Polar Star malt in our flagship Sapporo Draft Beer Black Label since 2011. In 2015, Sapporo Breweries received the Japanese Society of Breeding Award for its R&D and distribution of LOX-1-less barley varieties as a member of the LOX-1-less barley breeding group. We will keep improving our R&D capabilities and cultivating value-added barley varieties.
In 2015, Sapporo Breweries received the JSBBA Award for Achievement in Technological Research for its efforts in beer foam improvement.
* POKKA SAPPORO also received the JSBBA Award for the development of its high electric field alternating current sterilization method for juice products. This is the first time for two companies in the same group to receive this award.
One of the main causes of deterioration in beer quality is lipoxygenase-1 (LOX-1) in barley which catalyzes lipid oxidation. Sapporo Breweries has been focusing on cultivating LOX-1-less barley.
Development of new barley varieties to improve the flavor and foam stability of beer
Group R&D Organization Chart
Net sales
(¥ Million)
200,000 220,000 240,000 260,000 280,000 300,000
268,189 269,948274,909 281,032
273,652 288,000
2016 (Plan) 2015 2014 2013 2012 2011
Operating income to net sales Operating income
(¥ Million) (%)
9,305 7,522
9,902 10,193 8,677
11,100
2016 (Plan) 2015 2014 2013 2012
0 2011
2,000 4,000 6,000 8,000 10,000 12,000
0 1 2 3 4 5 6
Operating income and Operating income to net sales
Note: Figures are before goodwill amortization.
Beer Business
In the beer category, we increased our presence in the household market by renewing Sapporo Draft Beer Black Label. Along with Yebisu, these two core brands led a 1% year-on-year growth in domestic sales volume of beers. On the other hand, in new-genre beer and happoshu, sales volumes declined year on year as Mugi to Hop The gold and Goku Zero faced increasingly intense competition. As a result, overall sales volume in the beer and beer-type beverages category fell 5% from the previous year.
RTD Beverages
In the RTD category, sales also declined year on year, despite solid performances by Sapporo Otoko Ume Sour, a mid-to- upper price range product, and the Nectar Sour series.
Wine and Spirits Business
In the wine business, sales volume of our flagship Japanese wine Grande Polaire expanded sharply amid a growing market for fine wines. We also strengthened our imported wines by adding Penfolds from Treasury Wine Estates and Taittinger champagne. In the spirits business, we achieved In the Japanese beer market, we estimate that total demand
for beer and beer-type beverages fell about 1% year on year in 2015, largely due to the negative impact of unseasonable weather during the summer. Under such market conditions, in the beer category, strong sales of canned Sapporo Draft Beer Black Label led to the first year-on-year increase in overall Black Label brand sales volume in 21 years. Our core Yebisu brand also fared well. In growth fields outside of beer and beer-type beverages, we continued to promote product diversification by starting to handle global brands of imported wine and other measures. Despite these efforts, net sales in the Japanese Alcoholic Beverages segment declined by ¥7.4 billion, or 2.6%, compared with the previous year to ¥273.7 billion, and segment operating income declined by ¥1.6 billion, or 15.3%, to ¥8.6 billion.
Segment operating income before goodwill amortization declined by ¥1.5 billion, or 15.0% to ¥8.7 billion.
Japanese Alcoholic Beverages
Fiscal 2015 Overview
“Seek No. 1 by accumulating
one-of-a-kind products” and
strengthen cultivation of brands
in each field
Key Strategies under Sapporo Group Management Plan 2016
■ Beer business: As the “first year of a new period of growth in the beer business,” increase the value of the core Black Label and Yebisu Beer brands.
■ Japanese liquor business: In addition to the strong- performing blended shochu Imo Shochu Kokuimo, we will continue initiatives to attract new customers with liquors made exclusively from Japanese ingredients.
■ Wine and spirits business: Strengthen fine wines* and expand profitability. Propose new ways to enjoy Bacardi.
* Wines priced at or over ¥1,500
solid sales of many major international brands such as Bombay Sapphire, Dewar’s, and Martini.
Japanese Liquor Business
In the Japanese liquor business, overall sales declined from the previous year despite continued strong sales of Imo Shochu Kokuimo, Japan’s No. 1 selling blended imo shochu.
We expect the market for our Japanese Alcoholic
Beverages segment to remain challenging, mainly because of a decline in the drinking population. Nevertheless, we have designated fiscal 2016 as the “first year of a new
■SAPPORO BREWERIES LIMITED
■SAPPORO WINES LIMITED
■YEBISU WINEMART CO., LTD.
■TANOSHIMARU SHUZO CO., LTD.
■SAPPORO ENGINEERING LIMITED
■STARNET CO., LTD.
■SHINSEIEN CO.,LTD.
period of growth in the beer business,” and will work to further enhance the value of our core brands, Black Label and Yebisu, and promote efforts to create new value for beers such as craft beer. We also plan to aggressively expand sales of our RTD, wine, shochu, spirits, and Japanese liquor offerings, driving product diversification in the Japanese Alcoholic Beverages segment to expand earnings capabilities. In particular, we will continue to strengthen fine wine brands, including the Japanese wine Grande Polaire and our imported wines. We will also continue to propose new ways to enjoy the world’s No. 1 rum brand, Bacardi, and intensify our development of collaborative products for increasing unique value in RTD beverages, such as Otoko Ume Sour.
Outlook for 2016
The Sapporo Group started activities to support recovery in disaster-affected areas immediately following the Great East Japan Earthquake that struck on March 11, 2011. In 2012, Sapporo Breweries set up the “Tohoku Future Project” inside its Tohoku Headquarters and has since been engaged in support activities to meet the needs of the affected areas under three priority themes: (1) promoting consumption of local products, (2) disseminating information, and (3) raising the next generation. In 2015, Sapporo Breweries launched sales of Sapporo Draft Beer Black Label Tohoku Hop 100%, which uses hops solely from Tohoku produced through the Collaborative Contract Farming System. The product was only sold in the six prefectures of the Tohoku region, and part of the proceeds were donated to the Smile Tohoku Project, which aims to grow flowers in disaster-affected areas.
Sapporo Breweries will continue to engage in support activities to bring smiles to the faces of people in disaster-affected areas.
Activities Supporting Recovery in Tohoku
ESG TOPIC
Promoting consumption of local products
We support the economy and lifestyles of the Tohoku region by promoting consumption of products produced in Tohoku.
Disseminating information We disseminate information to enable people throughout Japan to always be aware of Tohoku.
Raising the next generation We support the young generation that will carry the future for Tohoku.
Three priority themes for support activities
Developing a strong presence
in the premium markets
of North America and Southeast Asia
Key Strategies under Sapporo Group Management Plan 2016
■ North America: Strengthen premium brands of SLEEMAN in the Canadian beer market and sustain growth.
■ Strengthen the SAPPORO PREMIUM brand of Sapporo U.S.A. by increasing focus on the Asian-American market.
■ Southeast Asia: Maximize the impact of the renewal of SAPPORO PREMIUM at Sapporo Vietnam, bolster brand strength, and expand the sales area.
■ Pursue synergies with Silver Spring Citrus and Country Pure Foods in the U.S. soft drinks business.
Net sales Operating income and Operating income to net sales
Note: Figures are before goodwill amortization.
result, its overall beer sales volume (excluding Sapporo brand beer) increased by 2% year on year. Sapporo U.S.A. also achieved a 2% increase in sales volume of Sapporo brand beers. In the soft drinks business, the inclusion of Country Pure Foods, Inc. as a consolidated subsidiary in February strengthened our position in the U.S. fruit juice market.
Asia and Oceania Market
In Vietnam, sales volume increased year on year, reflecting our aggressive marketing activities including large-scale promotional events to establish the SAPPORO PREMIUM brand and a renewal of SAPPORO PREMIUM Beer in November. In Singapore, we achieved strong year-on- year growth in sales volume following an expansion of sales channels into the household market. In South Korea and Oceania, we continued initiatives to strengthen sales, resulting in a strong increase in sales volume. As a result, we achieved a 13% year-on-year increase in sales volumes of SAPPORO PREMIUM brand beers overall.
In the North American beer market, we estimate that total demand was largely flat year on year for Canada and the U.S., supported by firm internal demand centered on personal consumption. In Asia, meanwhile, the beer market is expected to continue growing atop firm economic growth. In this environment, we continued aggressive marketing activities in the International segment, targeting the premium beer markets in the key regions of North America and Southeast Asia. We also made new investments in the U.S. soft drinks market. As a result, net sales increased by ¥20.8 billion, or 41.9%, year on year to ¥70.5 billion, while segment operating income decreased by 10.8% to ¥0.2 billion.
Segment operating income before goodwill amortization rose ¥0.6 billion, or 39.0% to ¥2.0 billion.
North American Market
In Canada, SLEEMAN BREWERIES continued aggressive spending on marketing its core premium brands. As a
(¥ Million)
25,888 36,121
48,216 49,673
77,800 70,501
2016 (Plan) 2015 2014 2013 2012
0 2011
20,000 40,000 60,000 80,000
Operating income to net sales Operating income
(¥ Million) (%)
2016 (Plan) 2015 2014 2013 2012 2011
1,433 1,053
2,448
1,430
2,600 1,988
0 500 1,000 1,500 2,000 2,500 3,000
0 2 4 6 8 10 12
Fiscal 2015 Overview
International
pursuing synergies between them, and to expand their sales and profits by acquiring new sales channels and other measures.
The Southeast Asian beer market is expected to continue growing. In the Vietnamese market, we aim to expand sales and profits through effective and efficient investment in marketing and sales activities with clearly defined targets, as well as through the renewal of Sapporo Premium Beer.
■SAPPORO INTERNATIONAL INC.
■SAPPORO U.S.A., INC.
■SAPPORO CANADA INC.
■SLEEMAN BREWERIES LTD.
■SAPPORO ASIA PRIVATE LIMITED
■SAPPORO VIETNAM LIMITED
■SILVER SPRINGS CITRUS, INC.
■COUNTRY PURE FOODS, INC
Despite expectations for economic expansion in North America, overall demand in the beer market is expected to remain largely flat in 2016. In the Canadian market, SLEEMAN BREWERIES plans to focus marketing expenditure on enhancing the value of its core premium brands, while aiming to achieve its profit goals and expand its market share by introducing value brands that meet needs in areas that are expected to grow. In the U.S. market, Sapporo U.S.A. plans to build a wider presence for the Sapporo Premium brand by strengthening marketing to the Asian-American population. In the U.S. soft drinks market, we plan to strengthen the business foundations of Silver Springs Citrus, Inc. and Country Pure Foods, Inc. by
Outlook for 2016
Safety and Quality Certification Acquired
for a Beverage Production Factory in the U.S.
In the U.S., the Sapporo Group entered the soft drinks business in 2012, in addition to the alcohol beverages business. Silver Springs Citrus, Inc., a beverage manufacturer, acquired certification at Level 3, the highest level, of SQF* for management of food safety and quality. Country Pure Foods, Inc., which was added to the Group in February 2015, has also acquired certification at its four factories.
* Safe Quality Food (SQF): A comprehensive food safety and quality management system implemented mainly by the U.S. National Retail Federation.
ESG TOPIC
Silver Springs Citrus quality controllers
Net sales Operating income and Operating income to net sales
Note: Figures are before goodwill amortization.
Segment operating income before goodwill amortization rose ¥0.1 billion, or 3.2% to ¥2.7 billion.
Domestic Food and Soft Drinks Business
In domestic soft drinks, we created new markets with strong sales of Kireto Lemon (bottled) and the launch of the energy drink Kireto Lemon-ENERGIE. In domestic products, POKKA LEMON 100 retained its strong performance even after a price revision, and sales volume for lemon-based products increased 4% year on year. Instant soup sales volume grew 10% year on year, with a successful renewal of Jikkuri Kotokoto boxed soup.Domestic Restaurants Business
Amid a continuing adverse environment marked by increasing procurement costs and personnel expenses, the Café de Crié coffee shop chain achieved year-on-year sales growth atop solid sales at existing shops and aggressively opened shops in collaboration with bookstores and inside hospitals.
We estimate that domestic demand for soft drinks edged up 1%, with demand for lemon-based products (flavorings) also estimated to have increased. However, we estimate that demand for instant soups fell back owing to the impact of warm weather from November onwards. The Food & Soft Drinks segment began its third year of operations at POKKA SAPPORO Food & Beverage Ltd. We concentrated investments on core brands in order to strengthen and cultivate them, while working on our management priorities of strengthening our sales capabilities and reducing costs. In the overseas soft drinks business, the POKKA brand retained top share in the tea drinks category in the Singapore market and also achieved the top share in the non-chilled fruit juices category, which grew into a second business pillar to follow tea drinks. As a result of the above, the Food & Soft Drinks segment recorded net sales of ¥135.7 billion, up ¥2.2 billion, or 1.7%, year on year, and posted segment operating income of
¥0.4 billion, up ¥0.3 billion, or 258.5%.
0 50,000 100,000 150,000 (¥ Million)
108,061
129,017 130,672 133,439 135,671143,700
2016 (Plan) 2015 2014 2013 2012 2011
Operating income to net sales Operating income
(%)
0 1,000 2,000 3,000 6,000 5,000 4,000
0 1 2 3 6
4 5 (¥ Million)
5,745
3,117
1,245 2,628
3,900 2,713
2016 (Plan) 2015 2014 2013 2012 2011
Food & Soft Drinks
Fiscal 2015 Overview
Move on to the next stage
through enhancement
of core brand strengths with a focus
on lemon-based products and soups
and earnings structure reforms
Key Strategies under Sapporo Group Management Plan 2016
■ Domestic soft drinks: Plan introduction of new products offering new values from the Kireto Lemon brand.
■ Domestic food: Disseminate the health value of lemons by expanding the customer base for lemon-based flavorings, clarify targets for introducing new soup brand series.
■ Overseas soft drinks: Maintain the top share in the tea drinks and non-chilled fruit juice drinks markets in Singapore, and nurture the next pillar of the business.
■ Expand sales by developing the model of local production in sales areas such as Indonesia and Myanmar.
enrich and brighten people’s lives.” In the domestic food and soft drinks business, we will launch new products that offer new value from our core Kireto Lemon brand and enhance its earnings capability by ensuring a low-cost operation to develop the foundation for growth. In the instant soup category, we will strengthen the Jikkuri Kotokoto lineup and strive to stimulate demand growth in the soup market by launching a new brand. In the soy milk drinks and soy milk yogurt category, which we entered in 2015, we will aim to expand sales by disseminating the health value of these products alongside that of lemon. In the domestic restaurants business, the Café de Crié chain will undertake detailed marketing at the individual shop level to boost brand value and accelerate growth.
In the overseas soft drinks business, we plan to increase our advantage in tea beverages and fruit juices in our mainstay Singapore market. We will also strengthen our partnerships with leading brands to expand sales and increase efficiency.
■ POKKA SAPPORO FOOD & BEVERAGE LTD.
■POKKA CREATE CO., LTD.
■PS BEVERAGE LTD.
■ STAR BEVERAGE SERVICE CO., LTD.
■POKKA SAPPORO HOKKAIDO LTD.
■NIHON BEANS CO., LTD.
■ POKKA CORPORATION (SINGAPORE) PTE. LTD.
■ POKKA INTERNATIONAL PTE LTD.
■ PT. POKKA DIMA INTERNATIONAL and another 8 companies
Overseas Soft Drinks Business
In Indonesia, where sales expansion is expected, POKKA CORPORATION (Singapore) PTE. LTD. and PT. Dima Indonesia established a joint venture to manufacture and sell soft drinks. The joint venture began construction of a new plant, which it plans to start up in 2016. Furthermore, the Restaurants business in Hong Kong was sold in December 2014.
Japan’s soft drinks industry is expected to continue experiencing challenging conditions with lackluster demand overall, intense competition, the impact of foreign exchange rates, and so forth. In this environment, we plan to deliver new value to customers in areas where we have distinctive advantages with a thorough understanding of the customers’ perspectives, under our vision to “continue to create new delicious products that
Outlook for 2016
We introduced the industry’s first sterilization technology, high electric field alternating current (HEF-AC)*, for the POKKA Lemon 100 production line at POKKA SAPPORO’s No. 3 Factory in Nagoya and improved the quality of lemon-based products compared with conventional heat- sterilization methods.
* High electric field alternating current (HEF-AC): A technology that sterilizes food quickly and efficiently by running an electric current through it.
Industry-First Sterilization Technology
Improves the Quality of Lemon-Based Products
ESG TOPIC
POKKA Lemon 100 production line
Net sales Operating income and Operating income to net sales
Note: Figures are before goodwill amortization.
Overseas
In Singapore, we worked to promote the creation of restaurants that win the affection of local communities in order to disseminate the GINZA LION brand globally. We also closed unprofitable outlets, bringing the total number of restaurants operating overseas as of the end of the year to 14.
Japan’s restaurant industry is expected to continue to face a difficult operating environment with increasing entry of overseas restaurant chains and growing competition across industries. In the Restaurants segment, we will work to provide safe, reliable food by enhancing operation quality in terms of menus, services, restaurant atmosphere, and so forth. In Japan, we will continue to expand the area of our GINZA LION and YEBISU BAR formats, starting with the reopening of our outlets in Ginza 5-Chome and Shimbashi, Tokyo, which had been closed for two years. Overseas, we will continue our efforts to establish our GINZA LION and Tonkichi brands in Singapore.
Japan’s restaurant industry continued to face a challenging operating environment in 2015, with a continuing upward trend in labor costs and the procurement price of food ingredients. In the Restaurants segment, we continued to create restaurants that aim to “deliver 100% satisfaction to customers,” while working to reform our earnings structure. As a result, the Restaurants segment posted net sales of ¥27.0 billion, down ¥0.1 billion, or 0.5%, year on year, and segment operating income of ¥0.5 billion, up ¥0.2 billion, or 72.2%.
Segment operating income before goodwill amortization rose ¥0.2 billion, or 71.7% to ¥0.5 billion.
Domestic
We opened five new outlets, centered on the GINZA LION and YEBISU BAR formats, and expanded the YEBISU BAR format in the Hokkaido and Tokai areas. We closed 20 restaurants during the year, including unprofitable outlets, bringing the number of restaurants operating in Japan at the end of the year to 178.
0 10,000 20,000 30,000 (¥ Million)
24,091
26,621 26,827 27,143 27,004 27,100
2016 (Plan) 2015 2014 2013 2012 2011
(¥ Million) (%)
219 539
415 304
523 1,300
2016 (Plan) 2015 2014 2013 2012
2011 0
2 4 6 8 10
Operating income to net sales Operating income
0 300 600 900 1,200 1,500
Restaurants
Fiscal 2015 Overview
Outlook for 2016
Aspire to be the world’s
No. 1 Beer Hall chain
by “offering Japan’s best
draft beer” and
“delivering 100%
satisfaction to customers”
Key Strategies under Sapporo Group Management Plan 2016
■ Domestic: Open new outlets of GINZA LION and YEBISU BAR starting with the reopening of the large-scale flagship outlet of GINZA LION that has been closed for two years and expand the area of operation.
■ Domestic: Develop new formats for future multi-outlet operation.
■ Overseas: Consider expanding the regions of operation of the overseas restaurants business centered on the GINZA LION BEER HALL format.
■ Domestic: Further strengthen initiatives of the Club LION Card (reward card).
■SAPPORO LION LIMITED
■NEW SANKO INC.
■ SAPPORO LION (SINGAPORE) PTE. LTD.
(¥ Million)
22,468 23,217 22,768 21,510 22,800
20,872
2016 (Plan) 2015 2014 2013 2012
0 2011
5,000 10,000 15,000 20,000 25,000
(¥ Million) (%)
0 2,000 4,000 6,000 8,000 10,000
0 10 20 30 40 50 8,553 9,396 8,703
7,696
10,000 8,282
2016 (Plan) 2015 2014 2013 2012 2011
Operating income to net sales Operating income
Operating income and Operating income to net sales
Note: Figures are before goodwill amortization.
new design based on the concept of “Quality of Daily Life,” as we sought to re-energize and reinvigorate the area.
Real Estate Development
After opening in October 2014, Ebisu First Square made a solid contribution to earnings in its first full year of operation. In the Ginza 5-Chome Redevelopment Project, we decided on the facility name, GINZA PLACE, and are continuing construction with the aim of opening for business in summer 2016.
The real estate industry is expecting to see rent levels increase at a gradual pace in the Greater Tokyo Area office leasing market. In the Real Estate segment, we will continue to drive value increases in the commercial area and other areas at Yebisu Garden Place, aiming to enhance the brand of the entire property and make it more convenient. At the commercial complex GINZA PLACE, scheduled to open in summer 2016, we will seek to create a facility that can contribute to further revitalization and creation of excitement in the district as a Ginza landmark, and will steadily advance as planned towards its opening.
Japan’s real estate industry in fiscal 2015 continued to enjoy a moderate increasing trend in rent levels atop firm demand in the Greater Tokyo Area office leasing market. In the Real Estate segment, we conducted proactive tenant leasing and maintained a high occupancy rate at our core earnings pillar, Yebisu Garden Place. We also continued to achieve high occupancy rates at other properties. As a result, the Real Estate segment’s net sales in 2015 totaled ¥20.9 billion, down
¥0.6 billion, or 3.0%, year on year, and segment operating income totaled ¥8.3 billion, up ¥0.6 billion, or 7.6%.
Yebisu Garden Place
At Yebisu Garden Place, we continued to increase value by enhancing its brand appeal and convenience, aiming to create a sophisticated property where people can have enjoyable experiences in comfortable and pleasant surroundings. The renovations in the property’s commercial area included the opening of a new-concept movie theater in March 2015, presenting customers with a new value proposal. In June, we reopened the renovated and remodeled
“Glass Square” dining area on the building’s B1 floor, with a
Net sales
Real Estate
Fiscal 2015 Overview
Outlook for 2016
Contribute to
enhancement
of the corporate brand
by enhancing the value
of our properties
Key Strategies under Sapporo Group Management Plan 2016
■ Retain high occupancy rates and improve rent levels at all properties.
■ Yebisu Garden Place: Enhance functions of office, commercial and dining facilities and strive to further increase value to boost the brand strength of the entire district.
■ GINZA PLACE: Steadily advance as planned towards opening in summer 2016 and contribute to revenues at an early stage.
■ Review and reorganize the business and property portfolio to advance strategically and establish a stable earnings base for the Group.
■ SAPPORO REAL ESTATE CO., LTD.
■ YGP REAL ESTATE CO., LTD.
■ TOKYO ENERGY SERVICE CO., LTD.
■ YOKOHAMA KEIWA BUILDING CO., LTD.
The Sapporo Group has stipulated six important CSR issues and promotes CSR-focused management as one of
the key strategies for realizing the sustained growth of the Group. We aim to be a distinctive food company that
continues to provide the lively, enjoyable and rich experiences and surroundings that customers seek, and we
are committed to working together with various stakeholders to contribute toward a sustainable society.
6
Issue
5
Issue
4
Issue
3
Issue
2
Issue
1
Issue
We will steadily implement our internal control system to increase the credibility of the Group’s management and provide timely and appropriate disclosure of information needed by all stakeholders, including shareholders.
In addition to compliance with laws and regulations, we will abide by the Sapporo Group Code of Corporate Conduct, raising awareness and providing education so that employees can conduct themselves with the correct sense of values and judgment standards.
Sound corporate management
We will show respect for the human rights of all Group partners and ensure their safety and mental and physical health. Moreover, we will nurture a corporate culture in which each employee can utilize their individual qualities and diversity.
Development of human resources and enhancement
of the working environment
As a member of society operating a business, we will actively promote engagement with the local community and contribute to its development.
As a Group handling alcoholic beverages, we will raise awareness about proper drinking practices and endeavor to prevent inappropriate drinking practices.
Harmonious coexistence with society
We will contribute to the establishment of a low-carbon society, a sound material-cycle society, and a society in harmony with nature to ensure that we can pass on a rich global environment to future generations.
Conservation of the global environment
We always conduct fair, equitable and open transactions with clients, suppliers and other trade connections and strive to achieve sustainable development together based on a relationship of mutual trust.
Fair and just dealings
We provide products, services and facilities with safe and reliable quality in line with the Group’s quality policy.
We listen to customers’ opinions and pursue products, services and facilities that will please customers.
Quality of food and space
Six Important CSR Issues
The Collaborative Contract Farming System (CCFS) promoted by Sapporo Breweries is a unique raw material procurement system like no other in the world and is based on the three pillars of 1) specifying the growing area and the growers, 2) specifying the growing method, and 3) communication between the growers and Sapporo Breweries. Raw material specialists called Fieldman directly visit the fields of CCFS growers in 10 countries around the world and engage in ongoing close communication to enable growing of high quality raw materials.
Communication with growers is the most emphasized aspect of the CCFS. Fieldman meet repeatedly with growers at the timing of prior to sowing, cultivation, harvesting, or after harvesting. Fieldman start by helping the growers understand the quality that Sapporo Breweries requires, and work with them in all areas from variety selection, cultivation methods, such as use of fertilizer and pesticides, and storehouse management. Through their collaboration, CCFS growers and Fieldman work together to produce safer, more reliable raw materials of higher quality. Mutual respect and building on relationships of trust is the first step to enable production of safe, reliable, high quality raw materials.
1 Quality of food and space
Issue
To continue to provide the products and services that customers around the world expect,
it is vital that we ensure safe and reliable quality as well as work to make further quality
improvements. The Sapporo Group will not be satisfied with the current level of quality,
but will continue to pursue even further improvements.
2 Fair and just dealings
Issue
