Business Segment Info
In the alcoholic beverages segment, competition is intensifying as domestic demand falls further because the population is shrinking, the birth rate is falling, the population is aging, the frequency of drinking outside the home is declining, and prices are rising across all categories. Looking at different drinking practices, the on-premise market is showing signs of recovery as restrictions on movement are eased. However, the practice of drinking at home persists, as rising prices drive more frugal behavior. Accordingly, demand for chu-hi and other RTD beverages remain favorable. Sales of chu-hi base spirit and whiskies suitable for use in highballs also rose. As a result, sales of alcoholic beverages amounted to ¥72,904 million (up 2.5% year on year). In this segment, the operating loss was ¥961 million (operating income of ¥499 million in the previous year).
In the shochu category (within Japanese alcohol products), December marked the 30th anniversary of our launch of the shiso shochu, Tantakatan. In commemoration, we promoted sales in collaborative campaigns with companies in Hokkaido. For Big Man, a kou-type shochu, we collaborated with manufacturers of outdoor products and continued to actively promote activities aimed at attracting new fans and creating new drinking practices, such as a campaign featuring the rugby player Michael Leitch as the brand’s image character.
In chu-hi and other RTD products, we have strengthened the lineup of our Mukashi Natsukashii series, which produces a retro atmosphere and nostalgic flavors. Sales also rose thanks to favorable performance of the Gotochi series, which spotlights local izakaya (Japanese-style pubs) and manufacturers, and store-brand products. We strengthened our Mukashi Natsukashii series lineup with the release of Mukashi Natsukashii Fruit Punch Sour, which reproduces the taste of the fruit punch served in classical coffee shops. In the Gotochi series, we introduced the - 3 - Asakusa Highball Denki Bran Sour.
In the sake category, the market remained sluggish, but category sales rose thanks to favorable performance in the Fukutokucho Kome Dake no Sutto Nomete Yasashii Osake series, Junmai Ginjo, store-brand products and overseas sales. In this same category, we offered a limited-edition product in the Fukutokucho Kome Dake no Sutto Nomete Yasashii Osake series, namely a seasonal unfiltered unpasteurized pure rice sake named Fukutokucho Kome Dake no Sutto Nomete Yasashii Osake Shiboritate Muroka Junmaishu. In this way, we met the needs of our customers for seasonal sake.
In brewing and industrial alcohol for sale, sales rose as we responded to sharply higher prices on our crude alcohol ingredients by revising selling prices. In wine and spirits, we strengthened our lineup by adding confectionery liqueurs and items in the Chu-hi Senka series (RTS products that allow consumers to just add carbonated water to enjoy drinking at home while replicating the feeling of being in an izakaya (Japanese-style pub)). We also saw an increase in demand for WHISKY KOHKUN, a type of whisky that is ideal for mixing in highballs. As a result, category sales increased.
(Starch for food processing)
In the starch for food processing segment, we revised selling prices in response to a sharp rise in the price of corn, a raw material. As a result, segment sales came to ¥4,279 million (up 12.3% year on year). Due to sharply higher raw material prices, however, we generated a segment operating loss of ¥344 million (operating loss of ¥59 million in the previous year).
(Enzymes and pharmaceuticals)
Sales in the enzymes and pharmaceuticals segment were ¥3,395 million (up 3.6% year on year), due to solid results from the outsourced fermentation business in Japan and favorable overseas sales in the enzymes category. However, operating income came to ¥370 million (down 34.6% year on year), due to higher cost of sales stemming from sharply higher ingredient and energy costs, as well as to the impact of the product mix.
In the real estate segment, sales amounted to ¥460 million (up 27.8% year on year), and operating income was ¥214 million (up 15.3% year on year). November marked the opening of The Royal Park Canvas Ginza Corridor, a new hotel on our former head office site in Ginza that is operated by Royal Park Hotels and Resorts Company, Limited, a Mitsubishi Estate Group company.