Issue of Annual Report 2010

Performance Review and Plan
Soft Drinks
Sapporo Beverage Co., Ltd.
Overall demand in the Japanese soft drinks market
was estimated to have grown by around 3% year
on year, despite the impact of the economic
downturn in the first half. Growth is thought to have come
primarily from increased demand stemming from recordhigh
summer temperatures in Japan from July to
September. In our Soft Drinks business, we embarked on a
brand building growth strategy and took action to improve
the operating margin. These efforts lifted both sales and
income, with net sales climbing ¥3.7 billion, or 12.0%, year
on year to ¥34.4 billion, while operating income increased
¥0.2 billion, or 74.8%, to ¥0.5 billion.
Soft Drinks
In terms of sales and marketing, we focused mainly on cultivating
and strengthening our brands by concentrating our sales capabilities
on core brand products and investing in marketing. For
Ribbon and Gabunomi series products, we worked to develop
consumer campaigns and in-store sales promotion measures. For
Gerolsteiner naturally carbonated water from Germany, our initiatives
included large-scale test sampling, TV commercials and
consumer campaigns in major cities. Contributions to sales also
came from new products, including So No Mama Zukuri fruit
juices, which capture real fruit flavor ‘just as it is’ for consumers
to enjoy. Together, these factors lifted sales volume 2% higher
than the previous year.
60,000
40,000
20,000
Turning to costs, in
addition to creating synergies
with alliance partner
POKKA CORPORATION, we
promoted cost-structure
reforms across the entire
value chain and sought to From left: Ribbon Citron, Gerolsteiner
maximize profits in a bid to
build a stable earnings base. Specific efforts included production
system optimization, procurement cost reductions, and fewer
inventory disposal losses.
Foods Business
In the Foods business, we extended the sales area for our Sapporo
Potekaru non-oil-fried potato chips nationwide (excluding
Okinawa), and increased our product lineup to seven varieties as
part of sales expansion efforts.
Net Sales
(¥ Million)
0
52,239
07
36,849
08
30,746
09
34,439
10
Operating Income (Loss)
(¥ Million)
1,000
500
0
–500
–1,000
–839
07
221
08
301
09
526
10
Management Plan 2011–2012
Management Targets
Soft Drinks Business
2010 results 2011 targets 2012 targets
Net Sales 33.9 37.4 39.8
Operating Income 1.3 0.7 0.7
Key Points
(¥ Billion) Other Businesses (Foods)
(¥ Billion)
2010 results 2011 targets 2012 targets
Net Sales 0.6 1.3 2.0
Operating Income (Loss) (0.7) (0.4) (0.3)
Soft Drinks
1. Marketing strategies
Enhancing our brand power
• We intend to strengthen our brand power by concentrating marketing investment
and sales efforts on core brand products.
• We will also work to improve our product development infrastructure with an
eye to the creation of new high-value-added products.
2. Cost structure reforms
Implementing our cost structure reform program
• We will implement cost structure reforms throughout the entire value chain
using a select-and-focus approach (selectively focusing resources on key areas).
Other Businesses
1. Expanding our confectionery business (Sapporo Fine Foods Co., Ltd.)
• With regard to the Potekaru range, we intend to expand sales by such
means as developing and introducing new products based on new ingredients
and new concepts. As we develop the product line, we will control
costs by using an efficient production system.
2. Developing our yogurt, dessert, and chilled beverages business
(Azumino Food Co., Ltd, *Equity-method affiliate)
• In addition to increasing sales of existing products, we will aim to develop
and launch functional yogurt made using Sapporo Breweries’ lactobacillus,
establish the product in the market, and increase sales.
Note: All Management Plan figures are derived from a simplified segment classification method based on the management approach.
20
SAPPORO HOLDINGS LIMITED
Annual Report 2010