Surging raw-material prices

「Uncertainty remains due to factors including the risk of higher crude oil and naphtha prices and supply constraints resulting from the Middle East crisis, concerns that labor shortages in the Food Service industry will accelerate following the suspension of accepting foreign workers with specified skilled-worker status, and the impact on the restaurant industry of the consumption-tax cut on food products scheduled for April 2027.」

「The prices of raw materials purchased by the Group could rise as a result of higher ingredient prices caused by sharp fluctuations in supply and demand, including substantial foreign-exchange movements, sharp declines in vegetable yields due to adverse weather, outbreaks of diseases such as avian influenza and classical swine fever, and international conflicts. Prices of energy used to manufacture products, such as electricity and gas, could also rise.」

「The increase in raw-material prices is having a major impact on the Group. Cabbage, the main raw material used in its flagship product, 「餃子」, has experienced a sharp rise in market prices because abnormal weather caused a significant decline in harvest volumes. Rice prices are moving toward stability as a result of the release of government stockpiled rice, but the possibility remains that the price of newly harvested rice will stay elevated.」

「Cabbage, the main raw material used in the Company's flagship product, 「餃子」, suffered a significant decline in harvest volumes because of abnormal weather. Although the Company has worked to maintain supplies from contract farmers, the resulting sharp rise in market prices significantly affected costs and had a major impact on earnings.」

「In response to higher costs for raw materials such as flour and vegetable oils, packaging materials, energy and logistics, the Company implemented a 5%-15% price revision for the 「焼餃子」 category effective for deliveries from 1 September 2024, and is working to improve profitability.」

「Raw-material and energy costs have remained high amid yen depreciation driven by the Japan-US interest-rate differential, the trade deficit and other factors, as well as the prolonged situation in Ukraine and other factors. In Japan, rapid price inflation has also contributed to continued uncertainty about the outlook.」

「As raw-material, logistics and energy costs continued to rise, the Company worked to further improve productivity and efficiency, particularly at the Kanto No. 2 Plant.」

「As raw-material, logistics and energy costs continued to rise, the Company worked to further improve productivity and efficiency, particularly at the Kanto No. 2 Plant.」

「However, the environment surrounding Japan remains uncertain, owing to factors including higher raw-material prices, soaring energy costs resulting from the situation in Ukraine and other factors, and the yen's sharp depreciation caused by higher interest rates in the United States.」

「The prices of raw materials purchased by the Group could rise as a result of higher ingredient prices caused by sharp fluctuations in supply and demand, including substantial foreign-exchange movements, sharp declines in vegetable yields due to adverse weather, outbreaks of diseases such as avian influenza and classical swine fever, and international conflicts. Prices of energy used to manufacture products, such as electricity and gas, could also rise.」

「In the food industry, the situation in which higher raw-material prices, logistics costs and labor costs put downward pressure on the earnings of industry companies continues.」

「However, labor shortages and higher raw-material and labor costs continue to weigh on the profits of companies.」

「The prices of raw materials purchased by the Group could rise as a result of higher ingredient prices caused by sharp fluctuations in supply and demand, including substantial foreign-exchange movements, sharp declines in vegetable yields due to adverse weather, and outbreaks of diseases such as avian influenza and classical swine fever. The Group is working to stabilize raw-material prices and secure stable volumes by maintaining multiple suppliers and contract farms. However, any significant increase in raw-material prices could affect the Group's performance.」

「In the food industry, consumers, particularly single-person households, are becoming increasingly inclined to economize, while various costs are rising because of foreign-exchange movements, labor shortages, higher raw-material prices and other factors」

「In the food industry, the importance of improving operating efficiency has increased further as companies continue to face higher raw-material prices and logistics costs, as well as labor shortages」

「During the fiscal year under review, Japan's economy experienced substantial foreign-exchange fluctuations, with the yen appreciating in the first half amid worsening economic conditions in emerging markets and the victory of the Leave campaign in the UK's referendum on EU membership, and depreciating in the second half amid expectations of new fiscal policies and interest-rate increases in the United States. However, while raw-material prices continued to rise because of the Kumamoto earthquake and adverse weather, a sense of labor shortage intensified and real wages grew only marginally, leaving economic conditions generally lacking a sense of prosperity.」

「Although consumers have become more inclined to economize because of soaring prices for fresh food and other factors, everyday consumption at convenience stores, supermarkets and restaurants has generally remained firm, and consumer sentiment appears to be improving gradually.」

「The prices of raw materials purchased by the Company could rise as a result of higher ingredient prices caused by sharp fluctuations in supply and demand, including the yen's depreciation in recent years, sharp declines in vegetable yields due to adverse weather, and the Government's implementation of safeguards (emergency import restrictions). The Company is working to stabilize raw-material prices and secure stable volumes by maintaining multiple suppliers and contract farms.」