Continuing to Create New Food Cultures, Solve Environmental and Social Issues, and Aim for Sustainable Growth as an EARTH FOOD CREATOR
NISSIN FOODS HOLDINGS CO., LTD.
President & Representative Director,
CEO
CSV Management Unique to the NISSIN FOODS Group
The Enduring Values of the NISSIN FOODS Group are that peace will come to the world when there is enough food and we create foods to serve society. As stated here, our beginnings were in taking on the challenge to address the social issue of post-war food shortages, which we believe is the very essence of what we call CSV management today.
Japan and the other developed countries of today are experiencing a growing awareness of various food-related social issues. These issues include food satiety and hidden malnutrition. In other countries, food shortages are becoming more serious due to recent global events. Amid these circumstances, we will continue to create new food cultures and engage in CSV management unique to the NISSIN FOODS Group as an EARTH FOOD CREATOR that achieves sustainable growth and solves environmental and social issues.
The topics of the environment and nutrition are attracting greater attention worldwide. The 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) in November 2021 clearly stated the goal of limiting temperature increase to 1.5℃ compared with pre-industrial levels.
The Tokyo Nutrition for Growth Summit 2021 held in December included discussions on various issues related to health and nutrition. We recognize that these two topics are ones in which food manufacturers should be play a more active role. These are also topics for which society has high expectations.
We have reaffirmed our Founder’s Spirit related to areas in which we must expand our value-creation capabilities. This spirit is our unchanging philosophy under which we pursue ambidextrous management—deepening existing businesses and exploring new businesses—to evolve further. Our founder frequently said, “Growth is a path without a summit.” We, too, must always be aware of the next stage.
Fulfilling Our Mission and Aiming for Sustainable Growth to Achieve Our Vision for 2030
We announced
the NISSIN FOODS Group Mid- to Long-Term Growth Strategy in May 2021. This strategy, which looks ahead to
the next 10 years, establishes three growth strategy areas in which we aim to achieve our vision via unique
CSV management.
The first is to strengthen the cash-generating capacity of existing businesses.
The second is EARTH FOOD CHALLENGE 2030.
The third is to pursue new businesses.
We believe that addressing these areas in an integrated manner will allow us to embody the EARTH FOOD
CREATOR concept.
The mission of the NISSIN FOODS Group is to not only build a stable business foundation and continue to
provide safe, delicious food, but also to develop products that solve environmental and social issues.
We believe contributing to the SDGs through our business activities is increasingly important for the
sustainable growth of our company.
In terms of strengthening the cash-generating capacity of existing businesses, we expect our overseas
businesses to drive future growth, delivering your products to more consumers around the world.
We are targeting high single-digit to double-digit growth, and hope to expand our profit composition ratio from the current level of 30% to 45%. In particular, we expect CUP NOODLES to remain a core brand that continues to grow and evolve, even more than a half-century after launch, enjoying sales in more than 100 countries worldwide and cumulative global volume topping 50 billion servings in May 2021. CUP NOODLES has surpassed the billion-dollar brand status, which is a KPI for global brands, and is reaching a stage to become a double-billion-dollar brand.
We intend to deepen the global branding of CUP NOODLES at an even faster pace to solidify competitive advantage as a growth driver. The development of global human resources for this purpose will be an urgent issue. Although overseas travel has been restricted due to the COVID-19 pandemic, we will draw on the strengths of employees who aspire to take on the challenges of the global market, all while maintaining due consideration to the risk of infections and safety.
In Japan, we will deploy the technologies and marketing capabilities developed as a leading instant noodle company laterally to ensure a stable increase in overall demand and to solidify our growth trajectory. We intend to grow our Non-Instant Noodles Businesses at a high single-digit rate, expand our profit composition ratio from the current level of 10% to 15%. In this way, we will develop and expand the Chilled/Frozen Foods and Beverage Business and the Confectionery Business. These businesses represent an important diversification and is the next pillar of earnings in our Non-Instant Noodles Business.
EARTH FOOD CHALLENGE 2030
EARTH FOOD CHALLENGE 2030 is our environmental strategy that aims for creating both sustainable societies and enhanced corporate value for our group. The two pillars of this environmental strategy are the Challenge to Effectively Use Resources and the Challenge to Climate Change.
Among the environmental challenges in the world, we consider climate change issues to be an important management risk. Climate change risk includes various impacts that include soaring raw material prices, damage to production and distribution centers caused by natural disasters, and changes in consumer purchasing activities. We analyzed the future financial impact of these risks on our business in line with the recommendations of the TCFD. Here, we used three scenarios reflecting the introduction of a carbon tax and an increase in the numbers and scale of natural disasters. We are proceeding with adaptation measures based on these analyses. Energy conservation, the introduction of electricity derived from renewable energy sources, and the efficient use of water resources represent a few of the measures in which we engage currently. We also focus on product development related to plant-based alternative meats and other products that help reduce environmental impact.
To hasten our efforts in mitigating climate change, we acquired SBT certification* for our CO2 reduction targets in June 2020. In February 2021, we joined RE100, an international initiative that aims to procure 100% of the electricity used in business activities from renewable energy sources. When the NISSIN FOODS Group joined RE100, our overall renewable energy ratio was only a few percent. By the end of FY 3/2022, we increased this ratio to roughly 18%. In addition to energy conservation measures, the introduction of renewable energy, and high-efficiency energy facilities, we continue striving to become carbon neutral (net zero emissions) in terms of CO2 emissions by 2050.
With respect to the Challenge to Effectively Use Resources, we aim to achieve 100% procurement of sustainable palm oil by the year 2030 (2025 for domestic instant noodles), and we are expanding procurement of palm oil verified to have been produced with consideration for deforestation and workers' rights. In May of this year, we released guidelines for our efforts until 2030 to comply with the NISSIN FOODS Group Sustainable Palm Oil Procurement Commitment (including the NDPE Policy). Based on these guidelines, we provide comprehensive support to oil mills and oil palm plantations located upstream in the supply chain.
Specifically, we use satellite monitoring tools to confirm the risk of deforestation around oil palm plantations and mills, creating and managing a palm oil mill list that consolidates the names and location data of suppliers. We also conduct field surveys via questionnaires and direct dialogue with palm oil farmers.
*Science Based Targets (SBT) are targets recognized to be founded on scientific evidence to limit global average temperature rise well below 2℃ compared to pre-industrial levels, which is the goal of the Paris Agreement.
Full-Scale Launch of Complete Nutrition Meals Project Through Co-Creation With Food Science
To Pursue New Businesses aimed at a leap forward in corporate value, we propose Future Foods to consumers through co-creation with food science. One of the enduring values of the NISSIN FOODS Group is, “Eat wisely for beauty and health.” Our efforts here are led by COO Noritaka Ando. This leap forward in becoming a Food Tech Company backed by processing technologies cultivated over many years is an initiative unique to the NISSIN FOODS Group. This is an aspirational project to protect the health of all people through food.
Leveraging Brand Strength to Overcome Challenging Times
Since the second half of FY 3/2021, raw materials prices have increased sharply worldwide, particularly for palm oil, flour, and materials based on crude oil. In response to these circumstances, we implemented price revisions in Japan after revisions overseas. These price revisions came after the determination that we cannot absorb cost increases through self-help efforts alone. We will continue striving to improve management efficiency and deliver better tasting and more value-added products.
Creating Unprecedented Value, While Maintaining the Spirit and Ingenuity of our Founder
Employees require a clear vision and goals to mobilize their talents effectively for growth. NISSIN FOODS Group employees aim to embody the vision of EARTH FOOD CREATOR, and must offer the capacity to create and propose never-before-seen products and services. New creations arise from irregularities that deviate from standard principles. We provide opportunities to play active roles and take on challenges in identifying discontinuities to create unprecedented products and services. Simply increasing efficiency is not enough to respond appropriately and in a timely manner to changes in the business environment. Just as companies must adapt to drastic environmental changes, individuals must also demonstrate resilience. And personal resilience is nothing more than a positive attitude toward difficult challenges and complex matters. We can describe this as persistence in achieving goals. Never giving up, never compromising, and continuing to work consistently until success is achieved. I am confident that the people with this passion will lead the future growth of the NISSIN FOODS Group.
Looking back, I have always believed that we cannot survive if we cannot adapt to changes in the environment. And that even CUP NOODLES must continue to evolve or we will find ourselves excluded from the market. Therefore, I have urged employees to Break CUP NOODLE, expanding into new brands and products. This attitude has sometimes caused friction with my father, who was the founder of the company. At the same time, I have thought about how to systematize the outstanding abilities of our founder. I have created a structure for each brand to have a brand manager and to create strong brands that surpass CUP NOODLES.
NISSIN FOODS founder Momofuku Ando invented CHICKEN RAMEN, the world’s first instant noodle, from his desire to satisfy hunger. This same desire is what drives people forward. The NISSIN FOODS Group designated March 5 as Founder's Day to provide an opportunity for all employees to reflect on the beginnings of our business and to reiterate the importance of our Founder’s Spirit. We intend to instill the Founder's Spirit further within our employees in Japan and overseas for the further growth of the NISSIN FOODS Group.
