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Food Business

Mutsuo Iwai Executive Vice President in charge of Food Business

Mutsuo Iwai
Executive Vice President
in charge of Food Business

In the food business, we are striving to provide delicious foods that people can consume safely while wishing to “provide products that your loved ones want to eat.” We will continue to devote our efforts to the three business areas of beverages, processed foods and seasonings, aiming to retain the trust of customers by serving the people’s daily lives through our offering of food products.

FY 3/2010 Business Performance Summary

  • Net sales: ¥394.7 billion down ¥41.3 billion
  • EBITDA: ¥14.5 billion down ¥2.5 billion
  • Operating loss: -¥13.7 billion down ¥2.2 billion

Factors behind the net sales decline

  • The net sales decline was mainly due to the withdrawal from the chilled processed food business and the exclusion of some subsidiaries from the consolidated results.

Factors behind the EBITDA decline

  • EBITDA increased slightly from the previous year in the key business segments* due to a drop in raw materials prices and cost reduction efforts.
  • However, EBITDA for the overall food business declined as a result of one-time losses** in the fishery product business.
* Key business segments: Beverages, processed foods and seasonings
** One-time losses: Recording of loss provisions related to delays in the collection of some accounts receivable and valuation losses due to a steep drop in market prices of some products

Factors behind the operating income decline

  • Operating income was dragged down mainly due to the decrease in EBITDA.
  • Amortization of goodwill related to the acquisition in June 2009 of additional shares in Green Foods Co., Ltd. by Katokichi Co., Ltd. (now renamed TableMark Co., Ltd.), a JT subsidiary.

Food Business - Net Sales

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Food Business - EBITDA

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Strategies and Specific Measures

In the food business, we are devoting our efforts to the three business areas of beverages, processed foods and seasonings, implementing measures to establish the highest standard of safety management and striving to further strengthen our business foundation for future growth.

Beverages Business

Implementing measures to strengthen profitability

  • To strengthen the Roots flagship brand, which is acclaimed for its authentic taste of coffee created by JT´s original technology, to mark the 10th anniversary of the brand.
  • To enhance our sales networks led by Japan Beverage Inc., a JT subsidiary responsible for operating vending machines nationwide, and to strive to provide conscientious services.
  • To establish a solid profit base by pursuing entire business efficiency.

Number of Vending Machines

  (Years ended March 31)
Number of Vending Machines

Processed Foods and Seasonings Businesses

Processed Foods and Seasonings Businesses

Convert to high value business

  • To expand the business volume by strategic concentration in staple food products (frozen noodles, frozen and packed cooked rice, frozen breads) and yeast products in seasonings, as high-value products, for which we can make maximal use of acquired technology and product development power in the TableMark group.
  • To strengthen profitability by establishing a strong business foundation, while striving to strengthen the value chain in the whole business process, from procurement, to manufacturing, and production of sales, coupled with acceleration of cost-competitiveness.

* The company name of Katokichi was changed to TableMark as of January 1, 2010.

Food Safety Control

Actions for reducing risks

  • Implementing strict audits on factories and promoting the acquisition of the ISO 22000 certification (frozen processed food factories of the JT Group and factories in commission acquired the ISO 22000 certification) for food safety management systems as well as devoting increased efforts to food defense against external purposeful attack.
  • Enhancing inspection items, and double-check inspection of agricultural chemicals for imported processed foods from China, in China as well as in Japan.

Improving consumer response

  • Strived to enhance the system that enables collection of customer feedback on a 365-day-per-year basis and quick and appropriate group-wide sharing of the feedback and to actively disseminate information useful for customers, while positively disclosing production plants of products as well as the main origin of raw materials.

Strengthening the institutional capability

  • Established the Tokyo Quality Control Center on the premises of the Food Development Center which is an R&D base
  • Actively incorporating diverse knowledge and viewpoints into food safety control by seeking assessment and advice from outside experts appointed as food safety advisers, and reflecting these in business