Through ambitious reforms, we aim to achieve further growth for the entire S&B Foods Group
Our Goals
Since our founder Minejiro Yamazaki became the first person to successfully manufacture curry powder locally in Japan in 1923, we at the S&B Foods Group have continued to deliver a variety of products to customers, including curries, peppers, wasabi, and other spices and condiments, as well as instant foods, enabling customers to experience spices and herbs at home.
Under our Corporate Philosophy “Bring natural life and happiness to every household,” we strive to be regarded in society as an irreplaceable company and individuals, to contribute to people’s healthy lifestyles and the conservation of the global environment through our businesses focused on spices and herbs.
Today, the world is undergoing tremendous changes at an unprecedented speed. These include changes in the global environment, and social and economic conditions, as well as the increasingly diverse lifestyles and value perceptions of our customers. The Group is actively engaged in research and development, product development, and marketing activities to address these increasingly complex and sophisticated needs. At the same time, by helping to resolve a range of social issues, we are progressing toward the achievement of our vision for a “flavorful, healthy and bright future.”
We believe that ambitious reforms are vital to achieving this vision. We have therefore established three long-term themes for growth: “aim for an overseas net sales ratio of 40% by 2043,” “accelerate research into spices and herbs and further deepen our initiatives to acquire cultivation techniques and develop growing areas,” and reinforce these initiatives through “training aimed at the development of global human resources, digital human resources, researchers, etc.”
As specific business strategies, we are progressively improving profitability by working to further strengthen our business base. This includes further promoting development and marketing activities for the Group’s unique high-value-added products to strengthen our base in the domestic business. For spices and herbs, which are at the core of our businesses, we will focus on expanding into peripheral domains such as functional research and products utilizing our research results. We will also engage in acquiring cultivation techniques and developing growing areas to enhance the Group’s uniqueness and sustainability. In our overseas business, we will proceed to consider strengthening the locally focused sales structure and the establishment of overseas supply chains.
In terms of financial strategy, we will strive to ensure stable dividends targeting a consolidated payout ratio of 30%, together with dividend increases, strengthening shareholder returns to encourage long-term shareholding. We will also endeavor to improve capital efficiency by continuing to reduce cross-shareholdings. In addition, we will steadily implement investments in human capital to support the Group’s sustainable growth and investments in growth fields.
Strengthening the Base of the Domestic Business, the Key to Growth, and Expanding the Overseas Business
At the S&B Foods Group, we have identified issues of high importance (materiality) and established the S&B Foods Mission as the goal of our activities, aiming for perpetual existence and growth as a company that provides value to society. Under this mission, we are working to contribute to achieving the SDGs through our businesses as we push ahead with business activities in line with our activity themes. The Third Medium-Term Business Plan represents the first step in our efforts to achieve our vision and engage in our long-term themes. Under our basic policy to “advance and develop food around the world and contribute to a sustainable future through businesses built around ‘Spice and Herb, the Earth’s Blessing,’” our efforts will focus on key measures formulated to achieve each of our five key strategies.
In fiscal 2023, the first year of the plan, we continued to face an adverse business environment due to the impact of factors such as soaring raw materials and energy prices, exchange rate movements, and geopolitical risk. The food industry saw continuing changes in consumer behavior and market structure, including an even more frugal mindset among customers. Under these conditions, we implemented price revisions in the context of soaring raw materials prices, as well as engaging in strengthening the overseas business and other initiatives under the Third Medium-Term Business Plan. As a result of these efforts, our results exceeded the plan for fiscal 2023.
Specific achievements included the launch of the new Stick Spice brand of foreign spices in Japan. This new brand, adapted to our customers’ changing value perceptions and consumption behavior, is aimed at further expanding our spice and herb businesses. As part of our efforts to strengthen sales of high-value-added products, we implemented sales promotions to communicate the added value of the powder roux products that utilize our patented technology, as well as expanding our lineup of these products. In addition, we launched Chicken Soup Stock, our first upcycled product, which uses parts of the chicken we cannot effectively utilize in our product manufacturing processes. Overseas, we engaged in locally focused sales activities, mainly in the key regions of North America and Europe, expanded our product distribution including digital marketing activities utilizing social media, and pioneered new sales routes, leading to an increase in sales. We also strengthened our organizational structure to enable further development in the future. This included the establishment of a new planning and development section for overseas markets.
Regarding our non-financial targets, we are steadily pursuing various activities as key initiatives linked to the S&B Foods Mission aiming to achieve our targets. In terms of promoting sustainable procurement, we achieved a 100% transition to RSPO-certified palm oil for all the palm oil used in our products, as well as a 100% transition to FSC-certified paper for all paper materials used in the packaging of our roux products, ready-made sauce in pouch products, and paste in tube products. We also established new targets for the continued expansion of these initiatives and revised our Sustainable Procurement Commitment.
From the First to the Second Year of the Third Medium-Term Business Plan
In fiscal 2024, the second year of the Third Medium-Term Business Plan, sales are expected to decrease due to the transfer of the cooked foods business. However, we will focus on developing and marketing products that provide customers with new value and revitalize the market, as well as further engaging in research on the functionality of spices and herbs and the consideration of unused raw materials upcycling, aiming to provide customers with more sophisticated value. In the overseas business, we will further enhance our offerings through locally focused sales focusing on our flagship products: Golden Curry, Wasabi, and UMAMI TOPPING (chili oil with other ingredients for export only). We will also pursue the swift consideration of various measures to strengthen supply chains. We will endeavor to maximize profits through improved profitability, despite an anticipated rise in raw materials and other prices, by expanding the overseas business and working to reduce the cost of sales and expenses. Moreover, by utilizing digital technology to pursue operational reforms and engaging in initiatives in new markets and businesses, we will strive to improve productivity, expand our businesses, and achieve our financial and non-financial targets.
Our Sustainability Initiatives
Spices and herbs are at the core of the S&B Foods Group’s businesses. For us, sustainability initiatives mean nothing less than achieving harmony with society and the environment through business activities based on our philosophy, vision, and code of conduct.
Our Sustainability Promotion Structure is centered on the Sustainability Committee, which is under the direct control of the Board of Directors. Under the committee, the Environment Group, Human Rights Group, Sustainable Procurement Promotion Group, Sustainable Product Development Group, and Engagement Promotion Group set sustainability-related targets and evaluate progress and achievement against these targets.
For environmental conservation, reducing the environmental impact of our businesses is not our ultimate goal; rather, we believe that each individual employee must consider whether our society and the global environment are improving because of our presence, and must act accordingly. We perceive issues such as climate change and the loss of biodiversity, specifically, as problems that seriously affect our businesses. We will steadily pursue carbon neutrality and the achievement of a recycling society, as well as promoting Group-wide efforts for sustainable procurement.
At the S&B Foods Group, we consider our employees to be valuable assets. We think it is important that all members of our diverse workforce can make the most of their individual strengths and work with a sense of fulfillment. To achieve sustainable growth, we will invest in developing human resources to foster our next generation of core personnel and enable our employees to acquire specialized skills in key areas such as digital technology and global business. At the same time, we will continue to engage in proactive human capital management aimed at boosting productivity and creating workplaces where all employees can work in health and vigor through the promotion of measures for diversity and inclusion, as well as health promotion.
Based on the executive officer system, the roles of board members and executive officers are clarified on corporate governance matters in order to speed up the decision-making process and business operations. Continued efforts are also underway to improve the effectiveness of the Board of Directors while quickly and precisely adapting to changing business environments. In June 2024, we transitioned from a company with auditors to a company with an audit and supervisory committee, aiming to enhance our global corporate value by improving corporate governance through measures such as a stronger supervisory function for the Board of Directors.
We will work to enhance internal controls across the S&B Foods Group and continually strengthen our management systems, centered on the Risk Management Committee, to address the various risks associated with our business activities.
Aiming for Sustainable Growth and Higher Corporate Value
Under our Corporate Philosophy, we are pursuing activities based on our long-term themes and the Medium-Term Business Plan, aiming to give shape to our vision for a “flavorful, healthy and bright future.” To achieve a sustainable society, we will help people around the world to enjoy healthy lifestyles and contribute to the global environment. We will achieve sustainable growth by creating even greater social and economic value, endeavoring to be a company that is trusted and chosen by all our stakeholders.
I look forward to your continued understanding and support.