Business Model Based on
Customer First Principle

ITO EN has established a business model that will constantly realize technological innovations in beverages and the creation of new markets by quickly feeding back customers’ voices to procurement, production and logistics, and product planning and development, as well as sales and distribution, and strengthening the company-wide collaboration based on the concept whereby each employee should pursue the management principle of “Always Putting the Customer First.”

This business model has continuously strengthened various kinds of financial and non-financial management capital to deal with ESG issues by realizing Creating Shared Value (CSV) and high profitability and efficiency at the same time in cooperation with the related parties. Based on this business model, we will enhance the sustainability of our business and the sustainability of society by contributing to the Sustainable Development Goals (SDGs) at the same time.

  • Financial capital

    • Financial management integrated with business model
  • ROE (FY4/2017)
    10.5%
  • Manufacturing capital

    • Fabless management in cooperation with manufacturing subcontractors
    • Resources saving and energy saving-type production (NS system, etc.)
    • Five block system of production and logistics
    • Sales bases nationwide
  • Food recycling rate
    95.1%
    Number of sales bases (Japan)
    197
  • Intellectual capital

    • Five product development concepts
    • High patent capability
    • Brand strength
    • Cultivation of optimum raw materials according to diverse products
    • Traceability
    • Quality control system for manufacturing subcontractors
    • Capabilities of manufacturing technology in cooperation with manufacturing subcontractors and material manufacturers
    • Mechanism for internal feedback of market information (Voice System for internal proposals)
  • Number of patents held for tea
    98
    Number of internal proposals
    14,596
  • Human capital

    • Route sales
    • Professional team of Tea Taster
    • Meritocratic personnel system
    • Penetration of awareness of "Always Putting the Customer First"
  • Number of Tea Taster Certificate holders
    (as of May 2017)
    2,102
  • Social and relationship capital

    • Raw material procurement capability with scale advantage
    • Collaboration and network with related parties
  • ITO EN’s ratio of handling crude tea in Japan
    Approx. 25%
  • Natural capital

    • Quality improvement of tea leaves and the stable procurement of raw materials based on the Tea-Producing Region Development Project
  • Production volume and plantation area in the Tea-Producing Region Development Project
    4,371tons
    1,226ha

Strengthening of Influence in the Value Chain
Improvement of Business Position

Strengthening of Influence in the Value Chain, Improvement of Business Position

Advantages of ITO EN

ITO EN has built a history of innovation as a comprehensive manufacturer of tea and other beverages, and has created a unique value chain (procurement, production, product development and sales).

Through collaboration with our stakeholders at all stages of the value chain, our coherent system for green tea production and consumption “ from tea plantations to used tea leaves” creates shared value between ITO EN, our stakeholders and society itself, generating a win-win-win relationship.

The innovation and resource allocation management capabilities born out of this relationship lead to improved profitability and efficiency through the achievement of cost cutting and a higher-percentage market share. The result of this has been the creation of a business model that achieves the two S’s: scaling (of business operations) and sustainability.

I believe that this is the advantage of our business model, born out of the implementation of the ITO EN Group’s management principle of “Always Putting the Customer First.”

“Always Putting the Customer First”

Utilization of Established CSR/CSV System
from CSR to ESG

  • Further strengthening of domestic businesses
  • Further development of overseas businesses
  • Enhancement of ROE management
  • Enhancement of CSR/CSV management
SUSTAINABLE DEVELOPMENT GOALS

Financial Targets

Forecasts for FY4/2022

  • Consolidated net sales
    600 billion yen
  • ROE
    10% or more
  • Total return ratio
    40% or more

Non-Financial Targets

  Material ESG Issues Major Activity Targets
Governance Compliance Promotion of acquisition of business compliance certificate
Social Human resources development Increase in number of ITO EN Tea Taster Certificate holders
Promotion of health value (health and nutrients) Development and enhancement of food and beverages that contribute to health
Community and industrial development Tea-Producing Region Development Project 2,000 ha in the future
Community and the environment and culture Continuous development of “Making Japan Beautiful Through Tea”* (all prefectures)
Environment Climate change and the prevention of air pollution Continuation of company-wide efforts to reduce CO2 emissions (Results in FY2016: down 21.8% from FY2009)
Waste and recycling Food recycling rate of 90% or more

* Includes the “Making Lake Biwa Beautiful Through Tea” project.

ESG Investment・Increase in External Evaluation

  • Financial capital

    • Improvement of profitability and capital efficiency
    • Increase in ESP
    • Stable stockholder returns
  • External evaluation
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  • Human capital

    • Human resources development
    • Creation of a pleasant working environment
  • External evaluation
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  • Manufacturing capital

    • Flexible production in line with demand
    • Optimum manufacturing process and the development of containers according to diverse products
    • Supply of products nationwide on the basis of community-based sales
  • External evaluation
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  • Social and relationship capital

    • Expansion of consumption of domestically produced raw materials and vitalization of the green tea market
    • Safety and security of consumers
    • Provision of health value to a wide range of customers
    • Dissemination and succession of Japanese tradition and tea culture
  • External evaluation
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  • Intellectual capital

    • Development of products tailored to diverse needs
    • Optimum sales proposals in light of various product and market trends
    • Use of optimum raw materials according to diverse products
    • Improvement of brand value through the transparency of production areas, thorough quality control and reliability
    • Improvement of technological capabilities of manufacturing subcontractors, etc.
    • Contribution to measures against imitations
  • External evaluation
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  • Natural capital

    • Regional revitalization of tea-producing areas
    • Improvement of food self-sufficiency and countermeasures against deserted cultivated land
    • Promotion of environmental conservation-type agriculture
    • Energy saving, resources saving and the prevention of global warming in business activities
    • System of Sustainability Management
  • External evaluation
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