Helping Drive Our Management Goals Forward by Integrating Global Insights and Pinpointing Solutions to Challenges


Director, CSO, and Managing Executive Office

In the Second Year of Our Growth Strategy, We Achieved Outstanding Results that Exceeded Our Already Impressive Performance

The earnings portfolio transformation outlined in our mid-to-long-term growth strategy is progressing faster than we anticipated in the plan's second year. In particular, for the core operating profit of existing business KPI, our two-year compound annual growth rate (CAGR) since FY 3/2021 was approximately 20%. This significantly exceeds our mid-to-long-term target of mid-single digits. One factor contributing to this outcome is the growth of our overseas business, particularly in the Americas. As the demand for at-home meals grew during the COVID-19 pandemic and the number of meals per capita eaten at home rose, instant noodles became the go-to meal solution amidst the economic downturn spurred by global inflation. In a sense, this is a result of NISSIN FOODS Group's products aligning perfectly with global trends.

While the 36% average price adjustment we carried out in the United States last August was unprecedented, I understand that the new prices have now permeated the market. This is underpinned by a robust brand strength that we have worked to build, and it affirms that the fruits of our premium strategy have steadily gained traction. Furthermore, I feel that these successes result from our efforts to build a relationship of trust not only with consumers but also with retailers as we strove to maintain output, ensuring a stable supply of products even as the pandemic wrought havoc on global supply chains.

In addition, we saw better-than-expected results of our goal to strengthen the cash generation capabilities of existing businesses due to growth in our domestic non-instant noodles business. This is an excellent outcome, as it affords us more flexibility and an expanded range of options in pursuing mid- and long-term investment strategies moving forward.

I'd like to keep driving our overseas business forward to further success. We are placing a great deal of emphasis on the Americas, a growth-driving region. This includes not only the United States but also Brazil, which has an overwhelming market share, and Mexico, where our business is rapidly growing. We aim to maintain robust growth in our income and profits in FY 3/2024 by assessing changes in economic conditions, strengthening our efforts to generate sustainable profits, and working proactively to build stable supply chains and increase production capacity throughout the medium and long term. We also recognize that expanding our global talent pool is a crucial issue for management to accelerate the growth of our overseas business. We have set about creating a work environment that will equip every employee with a versatile skill set and global perspective, allowing them to compete anywhere in the world. We also aim to ensure that each employee can visualize and achieve further opportunities for success in pursuit of their desired career path.

Aiming to Enhance Our Creating Shared Value (CSV) Approach to Management through Quantitative and Qualitative Analysis of Non-financial Capital

For the NISSIN FOODS Group to maximize each of our environmental, social, and economic values, we must lead the way in planning and carrying out comprehensive structural reforms encompassing all our business areas. Therefore, it's critical to analyze and evaluate all our activities on a group-wide basis.

That's why I approach my work with the mindset of a “Corporate Scientific Orchestrator,” supporting and directing all aspects of our operations from a scientific perspective. I am particularly focused on quantitatively and qualitatively analyzing the relationship between ESG (non-financial value) and corporate value. This approach also helps us address the challenge that many companies face—the question of whether ESG initiatives lead to enhanced corporate value. Since beginning in 2021, we've already formed a clear narrative to explain how non-financial value relates to PBR (price-to-book ratio) and the path by which ESG-related initiatives have elevated our corporate value (stock price).

In this analysis, it's crucial to continue to accumulate data year after year to enhance the reliability of our results over time. Furthermore, it's also important to understand fluctuations in our results. For example, we analyzed how many years later the PBR would increase by a certain percentage if we increased the ratio of female managers by one percent. Last year, we saw a result of one year, but this year, that has now grown to a year and a half. Therefore, there may be some variation from year to year. Over time, we can reduce these deviations, thereby leading to more reliable data and increasing the accuracy of our analysis.

In addition, over time, the marginal utility of a one percent increase in the ratio of female managers will diminish. On the other hand, initiatives related to matters of future importance, such as decarbonization, are expected to yield increasingly significant effects the more we focus on them. We need to continue verifying these hypotheses over a period of years and closely monitor the changes in outcomes.

By improving the accuracy of the data in our analyses, we can prioritize different measures in the short, medium, and long term, thereby enabling effective decision making. Moving forward, we aim to use the data we've accumulated and analyzed as a compass, guiding our way as we continue to implement and enhance our CSV approach to management.

Creating Resilient People and Organizations with an Evidence-based Approach

I believe that strengthening our human capital is the key to driving further global growth and realizing our vision. In particular, the recruitment and development of global talent is an urgent priority.

That's why we are considering the introduction of a job-based employment system. This system would implement well-defined job descriptions and roles, such as what we expect of globally minded talent and the differences that exist from country to country, and then evaluate employees accordingly. This policy is aimed not only at recruiting excellent candidates but also elevating employee engagement. In an era that demands resilience from individuals as well as companies, we believe that a job-based employment system will lead to an environment in which employees can chart their career development paths and strive to meet challenges head on while hopping between different roles within the company. Therefore, I first intend to establish and pilot test job descriptions for managers in FY2023.

Also, in terms of employee development, our in-house “university” established to encourage employees to take on new challenges, known as NISSIN ACADEMY, is now in its fourth year. In addition to equipping participants with various skills and knowledge, the program has started functioning as a forum where employees can interact with members from different departments to exchange ideas and insights. We are also planning to implement “cross one-on-one,” an initiative that connects employees not only hierarchically between managers and subordinates but also horizontally with employees in other departments. The idea is to support employees as they seek out new challenges and progress in their desired careers by providing opportunities to consult with peers and receive feedback from multiple perspectives, offering more autonomy in choosing one's career path, and strengthening our internal open recruitment system.

Furthermore, we are now embarking on VTA (value tree analytics) analysis in the realm of human capital, including reforms to human resource policies and personnel systems. This approach builds on our previous non-financial capital analysis methods and advances them one step further. With this analysis method, we can quantitatively assess the degree to which each policy or initiative is linked to corporate value at the individual policy level. This is particularly valuable for human resource policies, which are often difficult to measure directly and can only be evaluated over the long term. With this approach, we aim to raise our precision in setting priorities and delivering results for HR-related policies.

Bolstering Strategy with Science in Times of Change

It's often said that we are in an era of VUCA—volatility, uncertainty, complexity, and ambiguity. Looking ahead, however, the business environment is expected to change even more rapidly than before. As global conditions and market trends shift, the evolution of technology will only continue to accelerate. The important thing here is to have a firm grasp on these changes and the kinds of trends they will bring, while being flexible enough to change and adapt as needed.

As CSO, I intend to consistently acquire and digest the latest information from around the world, constantly discovering issues in the ever-changing business environment, and making recommendations to management. In pursuit of our business objectives, I will endeavor to work out how best to allocate our people, assets, and capital, as well as how to design organizations, systems, and processes to implement our policies. In doing so, I aim to increase the feasibility of our strategies and contribute to the sustainable improvement of our corporate value on both financial and non-financial fronts.

Quantitative analysis of ESG issues