Main Q&As at Business Strategy Conference（Japan）

A.In terms of sales, in Alcohol Beverages Business, in addition to further strengthening our competitive advantage in beer, we will step up our efforts in Super Premium, including Nikka and Enoteca, RTD and smart drinking-related products. In each of our businesses, we will also expand into new growth areas such as yeast and lactic acid bacteria, and strengthen the development of high value-added products.In terms of costs, we will also promote various efficiency improvements, such as aiming for a cost reduction of 15 billion yen in 2025 compared to 2022 in the combined procurement of direct and indirect materials. Through these efforts, we aim to restore the scale of Core Operating Profit to the 2019 level by 2025 for the Japanese business as a whole.

A.It is understood that over the past four and a half years the introduction of mechanisms and frameworks has been completed by us. We also believe that it is important not only to introduce a framework, but also to operate that framework and to develop the human resources to support it. In particular, it took time to develop human resources, but a system has been put in place to enable the successful operation of the framework. The system is currently being used for the full renewal of Asahi Super Dry and the launch of Asahi Nama Beer and Asahi Beerly, and updates are made as necessary to enhance the system. We are also reviewing our approach to product development, whereby we scrutinize a number of concepts and technological seeds from the customer's point of view, and then narrow them down, taking into account their differentiation and impact.

A.Although the amount of marketing investment has increased compared to the past, we believe that investment efficiency has improved, as we are focusing on improving brand equity and concentrating investment on brands with high growth potential.Once we have achieved a certain degree of recovery in the sales momentum of the brands in question, the next step will be to increase the efficiency of the amount invested. In addition to the scope for improving the efficiency of the absolute amount of investment, we believe that the ratio of marketing investment to revenue can be reduced in the future by strengthening the development of high value-added products.

A.We expect the inflow of demand from new genres to beer to continue. Our policy is to maintain a certain level of competitiveness in new genres, while focusing on our mainstay beers to improve the mix. As demand recovers, retail outlets are likely to offer a diverse range of products in addition to standard beers, including higher-priced products. We intend to further strengthen our staple brands as the axis of our strategy, while developing a variety of brands to increase the freedom of choice and attractiveness for consumers. These can generate sustainable profits, even if the scale of sales volume is small, as we are not developing mass marketing. We will also focus on developing the Group's global brands.

A.We believe that the launch of Asahi Super Dry Nama Jokki Can has undoubtedly driven a significant increase in the number of purchasers.While under normal circumstances there would have been a significant degree of cannibalization, we were able to keep the amount low by providing unique value in an innovative container. In evaluating the full renewal effect, it is also important to take into account that Asahi Nama Beer was launched at the same time, attracting 12 million users. We recognize that the full renewal of Asahi Super Dry was also a significant achievement, if the impact of the cannibalization of Asahi brand users is subtracted from the results.

A.Last year, we tried to strengthen the canning of "Pilsner Urquell" in selected regions, and based on the results, we are reconsidering our off-premise strategy. We are now able to offer a fresh product, thanks to the licensed production of "Peroni Nastro Azzurro" in Japan. We are currently developing our on-premise branding based on a successful global model, and if we can grow to a certain volume in the future, we will then consider expanding to off-premise.

A.RTDs currently make a small contribution to our profits when advertising and sales promotion expenses are included. Our goal is to increase our sales by approximately 1.5 times over the next three years to 60 billion yen, but expanding our market share is not our objective in itself. Rather than developing the same strategies as our competitors, we will achieve growth by providing new value and making game-changing changes to create a sustainable profit model for ourselves. Regarding smart drinking, the problem is that non-alcoholic products are currently stuck at the point where they are chosen based on the negative choice: "I would normally like to drink alcohol, but for some reason I cannot. It is important for both those who can drink alcohol and those who cannot drink alcohol to find the products themselves attractive, and we will continue our efforts to achieve this goal.

A.We have been working to reform the profit structure of on-premise products since before the spread of COVID infection. In addition to reviewing various contracts with restaurants, we are promoting cost efficiency mainly through the use of beer server maintenance machines. We are also consolidating sales offices across the Alcohol Beverages Business, Non-Alcohol Beverages Business, and Food Business, and have begun SCM restructuring, and our various initiatives are steadily producing results.