ITO EN, LTD. (President: Daisuke Honjo; Head office: Shibuya-ku, Tokyo; hereinafter the “Company”) announces that it has reviewed the ITO EN Group medium- to long-term management plan (hereinafter the “Previous Medium-Term Management Plan”) announced in June 2022 and formulated a new ITO EN Group medium-term management plan (hereinafter the “New Medium-Term Management Plan”) for the five years from the fiscal year ending April 30, 2025 to the fiscal year ending April 30, 2029.

The ITO EN Group has improved profitability and increased its overseas sales ratio by solidifying its business foundation in Japan and concentrating capital on its main brands. However, two years have passed since the formulation of the Previous Medium-Term Management Plan and the business environment is now changing more than initially anticipated, including the increase of prices, the fluctuation of exchange rates, global instability and changes in the market environment. Therefore, on the occasion of the 60th anniversary of the Company’s founding, the ITO EN Group has set out its vision (future vision) for the fiscal year 2040 (ending April 30, 2041) as a milestone on its journey to becoming a Global Tea Company, and it has formulated the five-year New Medium-Term Management Plan.

 

In the New Medium-Term Management Plan, we will promote accelerated business development to realize our future vision by FY2040 to create healthy and fulfilling lifestyles for customers and a sustainable society.  We have updated and expanded the content of the plan without changing the basic framework of the 5 Key Strategies set out in the Previous Medium-Term Management Plan. Particularly, in “Globalize Oi Ocha,” “Solidify the existing businesses in Japan” and “Create new businesses,” we will concentrate management resources in growth areas and reform our business structure to adapt to changes in the environment, aiming for sustainable growth and improved profitability. In addition, in “Strengthen the management base” and “Promote sustainability management,” we will achieve both sustainable growth and a sustainable society by strengthening the management base necessary to realize our business strategies and integrating sustainability with management.

The ITO EN Group’s mission is to “Create healthy and fulfilling lifestyles for customers and a sustainable society” and become a “Health Creation Company.” Guided by our newly formulated New Medium-Term Management Plan, we will continue to work to promote the physical and mental health, the health of society, and the health of the planet, contributing to the creation of healthy and fulfilling lifestyles for customers and a sustainable society.

 

The ITO EN Group future vision

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Overseas, in approximately 2040, tea consumption is expected to grow due to the growth of the population, economic development, and increasing health consciousness. On the other hand, within Japan, tea consumption and production are expected to decrease due to slowing economic growth caused by factors such as a declining population due to a low birthrate and aging population, labor shortages, and depopulation in rural areas. Given these predicted changes in the environment, the ITO EN Group has established the following long-term response policy to achieve its goal of becoming a Global Tea Company.

Long-term response policy
<Overseas business>
・Viewing the expansion of overseas markets as our greatest growth opportunity, we will concentrate our management resources on our strength in tea.

<Business in Japan>
・To respond to changes in the market and customers associated with the decreasing population, we will streamline the structure of our business and pursue improved profitability. In addition, in line with the diversification of consumer trends, we will create new businesses centered on tea and health.

<Procurement, production and research and development>
・We will procure raw materials stably and provide high value-added products through technological innovation by supporting tea-producing regions.

<Management base>
・ To respond to globalization and changes in the business environment, we will promote the transition to being a function-based organization and the development of diverse human resources.

Based on the long -term response policy, we will strive to contribute to the creation of healthy and fulfilling lifestyles for customers and a sustainable society through our tea-centered business activities in more than 100 countries and regions in the world by approximately 2040.

 

Key points of the Medium-Term Management Plan (FY2024–FY2028)

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In the New Medium-Term Management Plan, we will promote the accelerated development of business to realize our long-term future vision. Specifically, we recognize that Oi Ocha is entering its second stage toward our goal of becoming a Global Tea Company and the Group will work together to accelerate its global branding in countries around the world and expand the number of countries where we sell the product to more than 60 countries. In addition, in the existing businesses in Japan, we will aim to achieve a consolidated operating income ratio of 8 % or more by implementing structural reforms to respond to changes in the environment and building a business structure that emphasizes profitability for the first two years.

 

Five key strategies

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In the New Medium-Term Management Plan, without changing the basic framework of the five key strategies set forth in the Previous Medium-Term Management Plan and aims to achieve the medium-term targets by updating and expanding the content of the plan by positioning “Promote sustainability management” as the foundation of the key strategies.

Globalize Oi Ocha
・Development of global marketing
・Construction of a global production and sales system
・Evolution of the Tea-Producing Region Development Project

Solidify the existing businesses in Japan
・Restructuring of the domestic business
・Optimization of supply chain
・Marketing selection and concentration

Create new businesses
・Provision of new value centered on tea and health
・Expansion of business domains through capital alliances and M&A activities

Strengthen the management base
・Strengthening of governance and synergy within the ITO EN Group
・Promotion of human capital management, digital transformation and risk management

Promote sustainability management
・Sustainable growth and value creation towards being a century-old company by addressing material issues in conjunction with business strategies.

 

Financial policy

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We have set quantitative targets for the fiscal year ending April 30, 2029 based on our management policy of prioritizing profitability, improving profits and market share, and emphasizing capital efficiency to achieve sustainable growth. We will aim to achieve sustainable growth by securing stable cash flows while prioritizing financial soundness and by investing in future growth while considering the balance with shareholder returns. In the medium term, we will also aim to raise the operating income ratio to 8% or more in five years by strengthening all our products, including Oi Ocha, and restructuring our business while responding to the challenges that we foresee, such as the rising cost of raw materials.

 

Detailed Documents
【Ref】New Medium-Term Management Plan Presentation Material (FY2024–FY2028)