In Alcoholic Beverages Business, our focus has been on strengthening brand power and maximizing cash flow. Facing a greater than expected market slump following the earthquake, we concentrated our efforts on restoring the supply chain for our core brands. As a result, we believe we succeeded in further raising consumer awareness of core brands Super Dry and Clear Asahi. The same can be said about our Style Free happoshu brand.
Thus far in the second half the market has been reinvigorated by favorable weather conditions in July, and we have stepped up our marketing activities. We resumed the Extra Cold campaign for Super Dry that was put on hold in the first half and introduced the new Blue Label brand. We now are working to beat our initial full-year sales targets for beer-type beverages.
The other alcoholic beverages segment saw large declines in sales and profits in the first quarter as quake-related damages to our Fukushima Brewery halted production of beer-flavored beverages, from which we had expected considerable sales growth. In the second half we will proceed with a planned review of our transaction framework, and we expect the segment to move into a recovery track from 2012.
Achieving both sales and profit growth is a key issue for domestic Soft Drinks Business. In the first half of this year, our Mitsuya brand fell short of sales targets owing to quake-related damages to its production lines, but our Jurokucha and Wonda brands both fared well. In addition, the surge in demand for water after the disaster and the addition of the Rocco no Oishii Mizu brand helped us achieve a great leap forward in mineral water sales, and we even boosted our share of the total bottled water market.
On the profit front, we continued our program to bring PET bottle production in-house and endeavored to hold down material costs. As a result, we were able to increase profits above the targeted level.
We are now planning to redouble our efforts at Asahi Soft Drinks and further raise the company’s market presence. At the same time, we will continue with reforms of the profit structure, which are currently ahead of the plan, as we strive to reach the profit margins envisioned in our medium-term plan.
In Food Business, the earthquake had some effect on the procurement of ingredients, but we still beat our profit targets thanks to sustained growth of core brands at all Group companies in the segment and to restrained promotional spending.
In the second half, we will continue to strengthen and cultivate our core brands, while also laying the groundwork for new businesses that we think will contribute to growth in the future.
At Overseas Business, Schweppes had a somewhat tough first half, but the sale of Haitai Beverage and lower losses at our Chinese subsidiaries contributed to steady improvement at the operating income level.
Meanwhile, equity-method affiliates Tingyi-Asahi Beverages and Tsingtao Brewery fared well overall, despite facing some negative factors, such as rising material prices. Overall, we expect full-year equity-method earnings to be in line with our original forecast.
The details of Overseas Business are on P.6-9.