Issue of Annual Report 2010

Performance Review and Plan
(Performance review figures are based on the segment structure prior to reorganization in 2010.
Plan figures relate to the new post-reorganization structure)
Alcoholic Beverages (Japan)
Sapporo Breweries Ltd.
The Japanese beer and beer-type beverages market saw total
demand decrease by an estimated 2% year on year. By genre,
while demand for beer and happo-shu (low-malt beer) declined,
demand for new product genres grew by 10% as the shift in consumption
to lower-priced products continues. Against this backdrop, net sales in
our Alcoholic Beverages (Japan) business declined by ¥4.1 billion, or
1.4%, to ¥278.8 billion. In contrast, operating income rose ¥1.8 billion, or
24.3%, to ¥9.3 billion. Income growth reflected increased earnings atop
higher sales volume in beer, coupled with reductions in manufacturing
costs. These factors outweighed increased depreciation expenses from
the transition to a new sales and logistics system.
From left: Sapporo Draft Beer Black Label, Yebisu, Mugi to Hop
Beer Business
In the beer business, we conducted marketing activities centered
around our core brands Yebisu Beer, Sapporo Draft Beer Black
Label, and Mugi to Hop. Our overall sales volume for beer rose
0.8% over the previous fiscal year.
In beer, Sapporo Draft Beer Black Label made particularly firm
gains in the home-use market. The Yebisu brand, which recently
celebrated its 120th anniversary, saw overall sales volume rise
3.0% year on year, as Yebisu Silk attracted women and other new
customers during its first full-year of sales. As a result, our beer
sales volume declined just 2.8%, compared to a contraction of
around 4% in overall beer demand.
In new product genres, a jump of 11.5% in sales volume outpaced
growth in overall new product genre demand. Notably, Mugi
to Hop, now in its third year of sales, grew by 23.5% year on year,
for a second consecutive year of growth above 20%. Contributions
also came from Sapporo Creamy White, which was launched in
September.
In ready-to-drink (RTD) beverages, Nectar Sour Sparkling Peach
won strong support particularly from young women for its originality
and flavor, resulting in higher-than-expected sales volume.
Shochu Business
Shochu (Japanese distilled spirits) sales volume grew despite a
struggling market for wheat-based shochu. The growth reflected the
strong reputation of our singly distilled shochu offerings. Among
them Waramugi was declared a grand prize winner in the “Singly
Distilled Shochu” category by the Alcohol Appreciation and Evaluation
Committee of the Fukuoka Regional Taxation Bureau. As price
competition heats up in the multiply distilled, large-volume product
market, we have been able to maintain operating income despite
lower sales overall in shochu year on year. This is largely thanks to
our efforts launched two years ago to reform the earnings structure
in this business, mainly by eliminating unprofitable products.
Wine Business
In imported wine, sales were firm for the Yellow Tail series of
wines, which introduced Moscato as a new product. Turning to
Net Sales
(¥ Million)
Operating Income
(¥ Million)
domestic wines, while a strong reputation for quality translated
400,000
10,000
into growth for our Grande Polaire series of premium wines made
from 100% domestic grapes, contraction in the domestic wine
300,000
7,500
market and other factors led overall sales in wine business to
200,000
5,000
decline. Wine business earnings, however, grew for a fourth consecutive
year.
100,000
0
315,893
07
299,699
08
282,914
09
278,832
10
2,500
0
6,189
07
7,709
08
7,483
09
9,303
10
16
SAPPORO HOLDINGS LIMITED
Annual Report 2010