Enhancing the Business Model to Secure Stable Earnings from Existing Businesses

「Against this backdrop, while maintaining and strengthening the earnings base of its existing businesses, the Group has focused on developing businesses centered on “small-area markets” and “regional revitalization,” contributing to environmentally responsible and sustainable distribution in the fresh produce sector to help address social issues.」

「Having entered a new stage following the business-structure reforms undertaken through the previous fiscal year, we changed the organization to a function-based structure from the current interim consolidated accounting period in order to accelerate growth further.」

「In response to various social issues, including environmental problems such as climate change, logistics problems such as labor shortages, and demographic issues such as the declining birthrate and aging population, we will review our medium- to long-term business vision and work toward becoming a company that contributes to local communities and the creation of a sustainable society by sustainably supporting the production, distribution, and consumption of food.」

「In this environment, the group continued to strengthen the earnings base of its existing businesses and focus on expanding businesses centered on small trade areas and regional revitalization, contributing to environmentally responsible and sustainable distribution in the fresh-produce sector to help address social issues. In the existing businesses, transaction volumes, including the volume of outsourced operations and system transactions, increased, and stronger proactive sales activities to acquire new customers resulted in higher revenue and earnings.」

「In this environment, the group is focusing on expanding its business centered on small trade areas and regional revitalization, contributing to environmentally responsible and sustainable distribution in the fresh-produce sector to help address social issues, while maintaining and expanding the earnings base of its existing businesses. These initiatives increased transaction volumes, including the volume of outsourced operations and system transactions, and proactive sales activities to acquire new customers resulted in higher revenue and earnings.」

「In this environment, the group worked to strengthen the earnings base of its existing businesses and establish and expand a business centered on small trade areas and regional revitalization in fresh-produce distribution. In the existing businesses, it renewed contracts with major customers and revised the usage fees for its systems in an effort to secure and strengthen stable earnings. However, delays in various plans due to labor shortages, poor produce growth caused by recent abnormal weather, the resulting decline in market distribution volumes, and insufficient procurement volumes led to lower revenue and earnings.」

「Although demand for related services remained strong, and we focused on winning orders, implementing services, and expanding sales of existing systems and services, this was not enough to offset the impact of contracts with some customers ending in the previous fiscal year and other factors, resulting in lower revenue. Higher system maintenance and operating costs due to rising prices and labor costs also reduced earnings.」

「Although we focused on winning orders and implementing related services, demand for which remained strong, this was not enough to offset the impact of contracts with some customers ending in the previous fiscal year and other factors, resulting in lower revenue. On the earnings side, higher system maintenance and operating costs due to rising prices and labor costs weighed on results, and earnings declined because these increases were not reflected in prices quickly enough.」

「As a result of efforts to reform our business structure, we were able to significantly recover earnings.」

「In this environment, the group has focused on expanding earnings from the existing businesses, strengthening collaboration with players across the industry by leveraging its experience and expertise, and promoting a small-trade-area business in fresh-produce distribution aimed at improving distribution efficiency as a key strategic business.」

「For the existing businesses, we will continue to thoroughly implement low-cost operations and work to further improve productivity. We will also seek to expand sales by developing new customers for outsourced operations and the systems we own.」

「The business supporting the establishment of fresh-produce sections in drugstores, which we have pursued since 2018, did not achieve its initial target of monthly profitability at the end of the fiscal year because of the COVID-19 crisis, but we are preparing for full-scale expansion in the next fiscal year.」

「We considered what our company should look like 10 years from now, formulated and disclosed a medium-term management plan in January 2020. Although some initiatives have been delayed due to the impact of COVID-19 and other factors, we will continue to advance several new businesses, including developing a domestic produce platform, expanding the functions of the fresh-produce merchandising system to promote further system adoption by group companies of major chain stores, and supporting the establishment of fresh-produce sections in drugstores.」

「We will pursue several new businesses, including building a domestic produce platform, adding functions to the fresh MD system, introducing the system to group companies of major chain stores where it had not yet been adopted, and supporting the development of fresh-produce sections at drugstores.」

「To respond to these uncertain changes in the environment, we considered what our company should look like 10 years from now, formulated a three-year medium-term management plan for the next three years, and disclosed it on 14 January 2020.」

「For the existing businesses, we will thoroughly implement low-cost operations and work to further improve productivity. We will also seek to expand sales by developing new customers for outsourced operations and the systems we own. For the new businesses launched since 2018, including support for building fresh-produce sections in drugstores and developing a domestic produce distribution platform, we plan to achieve monthly profitability and release a prototype during the fiscal year ending November 2020.」

「We are continuing to develop new businesses related to structural changes in the fresh-produce industry, including support for major retail chains adopting the SPA model, development of a domestic produce distribution platform, and support for building fresh-produce sections in drugstores, and intend to accelerate these efforts further through organizational changes.」

「We are preparing to launch several new businesses, making effective use of our supply-chain infrastructure and working to launch during the current fiscal year an initiative to support retailers in adopting the SPA model. We are also developing a next-generation domestic produce distribution platform in preparation for our full-scale entry into the domestic produce market.」

「We are expanding our existing producer-focused supply-chain operations while building a new service model from the retailer's in-store perspective, and plan to launch it during the current fiscal year as an initiative to support retailers in adopting the SPA model. We are also developing a next-generation domestic produce distribution platform in preparation for our full-scale entry into the domestic produce market.」

「We will actively invest in new businesses in order to turn changes in the environment surrounding our company into business opportunities. Internally, we will establish priority initiatives to be addressed based on clearly defined priorities and will steadily launch new businesses.」

「During the period, we are building a value-chain system for domestic produce and preparing to handle outsourced operations for companies and producer organizations that have newly entered the domestic produce distribution market, in order to expand our services for these customers.」

「During the period, we are building a value-chain system for domestic produce and preparing to handle outsourced operations for companies and producer organizations that have newly entered the domestic produce distribution market, in order to expand our services for these customers.」

「Against this backdrop, the Group is treating changes in the environment surrounding the distribution of domestically produced fruits and vegetables as an opportunity for growth. It is accelerating the development of its business for domestically produced produce by leveraging supply-chain expertise developed through imported fruits and vegetables such as bananas.」

「Under these circumstances, our group will continue to enhance the business model in its existing business areas to secure stable earnings.」