伊藤園（2593） – ITO EN INTEGRATED REPORT 2021

ITO EN INTEGRATED REPORT 2021Fiscal year ending April 30, 2021Message from the President ・・・・・・・・・・・・・・・・・・・・・ 4Human Resource Strategies ・・・・・・・・・・・・・・・・・・・・ 50CONTENTSITO EN Groupʼs Management Principle ・・・・・・・・・・・ 1ITO EN Groupʼｓ Management Philosophy ・・・・・・・・ 2“Always Putting the Customer First” Becoming a “Global Tea Company” ・・・・・・・・・・・・・・ 3 Using experience and achievements to advance to the next stage The President and Outside Directors Discuss Issues and Goals ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 9ITO EN Group–A History of Accumulated Product Development ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 12Financial and Non-Financial Highlights ・・・・・・・・・・ 14Value Creation Model based on “Always Putting the Customer First” ・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 18ITO EN Group Material ESG Issues ・・・・・・・・・・・・・・ 20Special Feature The True Potential of Tea for the Future- Tea Sustainability ・・・・・・・・・・・・・・・・・・・・・・・・・ 22 Business OverviewOi Ocha ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 28Tea Leaves and Matcha Products ・・・・・・・・・・・・・・・・ 30Barley Tea Products ・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 32TULLYʼS COFFEE ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 33Vegetable and Aojiru (barley grass green juice) Products ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 34ITO EN Non-consolidated Sales by Category and Outlook for the Next Year ・・・・・・・・・・・・・・・・・・・・・・ 35Overseas Business ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 36A powerful foundation for the creation of valueA Value Circle for “Always Putting the Customer First” ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 38Research, Product Planning and Development ・・・ 40Procurement, Production and Logistics ・・・・・・・・・・ 42Sales and Distribution ・・・・・・・・・・・・・・・・・・・・・・・・・・ 44Initiatives to Tackle Environmental Issues ・・・・・・・・ 46Financial Management ・・・・・・・・・・・・・・・・・・・・・・・・・ 54Corporate Governance ・・・・・・・・・・・・・・・・・・・・・・・・・ 56Stakeholder Engagement (Building relationships with customers) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 62Executive Officers ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 64■ Related dataKey Financial Indicators ・・・・・・・・・・・・・・・・・・・・・・・・ 66Non-financial Summary (ITO EN non-consolidated bases) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 67Introduction of Main Group Companies ・・・・・・・・・ 68Company Outline ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 69Editorial Policy The ITO EN Integrated Report 2021 is issued as an integrated report, combining our financial and non-financial information in a single document. Additionally, we communicate information from multiple viewpoints via various other reports and websites, to enable all stakeholders to gain a greater understanding of ITO EN and its activities. This report focuses primarily on activities during fiscal 2020 (May 1, 2020 to April 30, 2021), but also includes details of selected ongoing initiatives and more recent activities. The professional affiliations and official positions of the stakeholders introduced in this report are current as of the time of their activities. (Date of publication: February 2022)ITO EN Groupʼs Management Principle “Always Putting the Customer First”Definition of Our CustomersConsumersSuppliersShareholdersRetailersFinancial institutionsLocal communitiesDefinition of “our” customersManagement Message“Always Putting the Customer First” is the ITO EN Groupʼs management principle,representing the fact that the foundation of business management at ITO EN is our commitment to placing importance on each and every customer. Our definition of customers includes consumers, shareholders, retailers, suppliers, financial institutions and local communities. We regard everyone involved with the ITO EN Group as our customer, and earnestly strive to address our customersʼ needs through the opinions and requests we receive, and by always using the perspective of our customers as the foundation of our management strategies. Looking ahead, under this management principle, we will continue working vigorously towards the fulfillment of our long-term vision of becoming a Global Tea Company.Hachiro Honjo, Chairman of the BoardDaisuke Honjo, President and CEO1ITO EN INTEGRATED REPORT 2021ITO EN Groupʼs Management PhilosophyBasic management conceptITO EN Groupʼs Management PrincipleAlways Putting the Customer FirstCompany motto, ITO EN Group Basic CodeMission in societyITO EN Group MissionHealth Creation CompanyContributing to the realization of healthy and prosperous lives for our customers and a sustainable society through products derived from nature and sincere servicesAiming for the medium-to long-termMedium- to Long-Term VisionGlobal Tea CompanyContributing to the health of customers around the world, the corporate group “ITO EN” supports the enriched lifestyle of each and every personAlways Putting the Customer FirstHealth Creation CompanyGlobal Tea CompanyThoughts for realizing the mission and visionThe spirit of “STILL NOW”5 Concepts for Product Development(Natural, Healthy, Safe, Well-designed, Delicious)(cid:506)Code of Conduct(cid:507)ITO EN Group Code of Conduct, ITO EN Group Standard of ConductITO EN Group CSR Charter Environmental PolicyITO EN Group CSR Charter Human Rights Policy“Always Putting the Customer First” Becoming a “Global Tea Company”All employees unite as “Team ITO EN” to pursue our management principle of “Always Putting the Customer First.” At ITO EN, in order to implement effective marketing, we have prepared the following interpretation of the mechanism for making a sale, which we instill in our employees.Attend to the customerʼs wants and needsMerchandisingKnow your customerMarketing ResearchFivemarketing functionsSalesProvideservice to the customerAdvertisingSales PromotionCommunicate with the customerAttract the customerThe spirit of“STILLNOW” We are constantly considering the problem of “what customers are still now dissatisfied with…” and contribute to solving their requests and dissatisfactions. We are actively working to solve social and environmental issues through our core businesses, including products and services.23ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Using experience and achievements to advance to the next stageMessage from the PresidentQuality, healthy lifestyles and a commitment to social responsibilities underpin the growth of the ITO EN Group.President and CEO　Daisuke HonjoThis is an extremely positive trend for the ITO EN Group Operations that encompass beverages and tea leaf as well as the entire Japanese tea industry. In fact, tea products are a major strength of the ITO EN Group. For bags and other leaf tea products are one of our best example, we sell Oi Ocha and Kenko Mineral Mugicha performing product categories. We are also posting as bottled and canned beverages as well as tea bags strong sales of products for healthy living as the interest and a variety of other tea leaf products. Selling Tullyʼs in staying healthy increases in Japan. For example, Oi Coffee beverages in bottles and cans generates Ocha Koicha and other functional food products are synergies with the 764 “Tully Coffee” specialty coffee selling very well. shops. Going one more step, we launched a drip coffee A New Medium-to Long-term Management Plan　The impact of the pandemic on our sales and earnings product in June 2021 that is easy to prepare. We will continue to leverage these strengths to make our branding activities even stronger. The ITO EN Group has operations outside Japan mainly in North America, China, Southeast Asia and has forced us to take another look at the goals of Australia. In the United States, the green tea leaf our current management plan, which covers the five-market is growing at an annual rate of about 4% year period ending in April 2022. The business climate and sales of ITO EN tea leaf products are increasing today is much different from our outlook when we at an annual rate of about 6%. In addition, sales of announced this plan in June 2017. As a result, we our Oi Ocha beverages and global branded MATCHA must revise our goals and strategies. We are working GREEN TEA teabag products are consistently strong on a new medium-to long-term management plan to outside Japan. We will expand the Japanese tea market be announced in June 2022. This plan will incorporate overseas by making more people aware of the aroma, our outlook for negative effects of the pandemic to umami and vivid color of high quality “Japanese tea,” continue during the first half of the fiscal year ending and by taking advantage of the opportunities presented in April 2022 and then begin to taper off slowly in the by the increased health consciousness among people second half.worldwide.The ITO EN Group must accomplish two important goals: make our core brands even more powerful and speed up our growth outside Japan. As Japanʼs population declines, the beverage market is maturing An Uncompromising Commitment to QualityOverview of the Past Fiscal Year 〜Challenging market conditions created new opportunities for ITO EN　I would like to begin this yearʼs message with my as by restricting outings and working from home. and undergoing fundamental changes. For instance, Based on the ITO EN Groupʼs philosophy of “Always tea and other unsweetened beverages now have a Putting the Customer First,” we are constantly focusing market share of more than 50%. We want to raise the our attention on issues we call “STILL NOW,” which condolences to everyone who lost family members or The past fiscal year was a difficult period for Japanʼs market shares of our four core brands: Oi Ocha, Kenko means seeking what customers are still now dissatisfied friends due to the pandemic and my sincere wish for a beverage industry as the pandemic along with record-Mineral Mugicha (Healthy Mineral Barley Tea), Tullyʼs with. Furthermore, we are always developing products speedy recovery of everyone currently infected with the setting rain and flooding reduced total beverage sales Coffee, and Ichinichibun no Yasai (A Dayʼs Worth of that will satisfy our customers by prioritizing five coronavirus. I also want to express my sincere respect in 2020 by 9% compared with 2019 sales. At the ITO Vegetables). The targets are market-leading positions themes: natural, healthy, safe, well-designed, and and appreciation for the hard work of healthcare EN Group, sales decreased 7.7% to ¥446,281 million by a wide margin for these brands. delicious. We are also dedicated to providing services professionals and others who are treating people and in the fiscal year that ended in April 30, 2021.Continuing to increase sales of Jujitsu Yasai closely linked to our customersʼ needs. About 75% fighting this crisis. Market conditions pose challenges for us but also (vegetable/fruit juice) and Mainichi Ippai no Aojiru (one of the beverages we sell are unsweetened, including The pandemic has dramatically altered the economy, create new opportunities. As people spend more time glass of barley grass green juice a day) are also goals of the core Oi Ocha brand and other key brands such society and our values. Many people have shifted to at home, the number of people, including young ours as a growing number of consumers in Japan seek as Kenko Mineral Mugicha and Tullyʼs Coffee. A new life styles in order to live with the pandemic, such people, who make Japanese tea at home is increasing. products that are healthy and authentic.commitment to technologies which maintain quality 45ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021to produce outstanding unsweetened products that the production of quality tea leaves used in our tea leaf However, land used for growing green tea, the amount agriculture in Japan. In June 2021, we jointly launched retain all of the richness and flavors of tea and other and beverage products. This innovative project has the of green tea produced and agricultural workers for the Nippon Support Miyazaki Prefecture Grown Hyuga ingredients is one of our greatest strengths. This dual goals of solving problems involving agriculture in green tea are all slowly declining year after year. As Summer project and started sales activities of jointly mindset has defined the ITO EN Group since the Japan and ensuring a reliable supply of tea leaves. In a buyer of about one-fourth of Japanʼ green tea developed products. I want ITO EN to continue to beginning of our operations as a tea store in 1966. addition, we operate a new type of specialty tea stores production ITO EN have been conducting the Tea play a role as a link between farmers and consumers One result of this resolute commitment was the for the purpose of reinforcing the publicʼs perception Producing Region Development Project since 1976. in Japan in order to raise the awareness and sales of 1980 launch of canned oolong tea, the worldʼs first of the value of Japanese tea. The stores are also a link The purposes are ensuring a reliable supply of high-Japanʼs agricultural products.unsweetened tea beverage. This was the beginning of between tea farmers and consumers. The stores are quality ingredients for our products and of helping our beverage business. Today, we carry on this spirit Nihombashi Wa-no-Cha ITO EN in central Tokyo and solve various issues in Japanʼs agricultural sector. The of using innovative technologies and the creation ocha room ashita ITO EN in Tokyoʼs trendy and vibrant project has two elements. One is contract growing, in of new types of flavorful unsweetened products. Shibuya district. To increase the number of Japanese which we purchase all of the green tea leaves produced Furthermore, a resolute commitment to quality is tea fans, the stores raise awareness of the delicious by farmers participating in the project. The other is paramount throughout the ITO EN Group, such as at flavors of Japanese tea and are sources of information creating new land for growing green tea, such as by Tullyʼs Coffee Japan Co., Ltd., and Chichiyasu, K.K. and about tea, including its appeal and culture as well as utilizing abandoned farmland to establish large tea all overseas group companies. This dedication gives other knowledge. fields. We started the farmland project in 2001 mainly us a competitive edge that other companies cannot ITO EN has succeeded at creating a culture of in Kyushu and in 2020 extended these activities to match. I believe that the high market shares of our tea enjoying sugar-free tea beverages by developing Shizuoka prefecture. As of April 2021, this project has beverages, tea leaf products and other major products products with origins in Japanʼs culture of tea along added 2,207 hectares of green tea fields, well above are the direct result of these strengths of our group.with qualities that reflect the preferences of todayʼs our original target of 2,000. Enlarging the cultivation consumers. As the pandemic dramatically alters the of green tea also has the benefits of supporting Environmental Activitieslives of people worldwide, I believe that the mission the sustainable growth of green tea production in In 2020, we established the ITO EN Group Medium-of the ITO EN Group as the worldʼs preeminent tea Japan, finding successors for the many farmers who to long-term Environmental Goals, which include goals company is to be a constant source of new ideas for are retiring, and dealing with the social problem of tea and other products that contribute to good health. abandoned and unused farmland. related with climate change and water resources, and initiative for containers and packaging. We are making Supporting the Sustained Progress of AgricultureDemand for green tea beverages and green tea leaf products has been climbing steadily for many years. We also use knowledge acquired from the Tea steady progress in all these areas while taking into Producing Region Development Project to use contract account various changes affecting our initiatives. Plastic farming for the production of vegetables for our trash in the worldʼs oceans and the need to recycle vegetable juice products. In addition, we participate in containers and packaging are two urgent issues directly the Nippon Support Project that was started by Japan linked to the primary business operations of the ITO EN Agricultural Cooperatives as a new way to support Group and the entire beverage industry. Formulation of the next medium- to long-term management plan in response to changes in the business environmentOur Mission as the Worldʼs Leading Tea CompanyIncreasing demand for authentic products is another result of customersʼ new life styles and growing interest in healthy living. One trend we can see is a return to making tea at home using a tea pot. To continue growing, the ITO EN Group needs to further appeal the Japanese tea market.The ITO EN Tea Producing Region Development Project is a framework for working with tea farmers for authenticity of Japanese tea and further enlarge the FY04 / 2022 targetMedium-to long-term Management PlanChanges in the business environmentMedium- to long-term visionTowards a Global Tea Company・Strengthening the second pillar of business and profit base・Strengthening management base・Financial strategy・CSV management initiativesConsolidated sales ROE Total pay ratioOverseas sales ratio600 billion yen10　　%or more40 %or more10　　%・Corona infection spread・ Super-aging society・ Expansion of health / life anxiety・ Changes in life and communication, increase in community issues・ Drastic decrease in foreign visitors to Japan・ Reduction of domestic agriculture・ Global warming and water resource problems・ Natural disasters・ Resource depletion / resource circulation・ Japan’s leading tea company Global presence of “ITO EN”・ Proposal of food culture utilizing natural materials Challenge to the domestic food field・ Growth through the practice of CSV management・ Strengthening ESG initiatives: Consumer issues, communities / society, global environment・ ROE management: ROE 10% / Total payout ratio maintain 40% June 2022New medium- to long-term management plan will be announcedWe have established the goal of using only PET plastic bottles made entirely of recycled materials by 2030 throughout our group. We plan to accomplish this switch to 100% recycled materials for PET plastic bottles even earlier for our core Oi Ocha brand, which has an annual sales volume of more than 80 million cases. For this brand, our target is 2025. Our environmental activities also include the sale of products with biodegradable ECO straws made of plant-based materials. Overall, we plan to step up the pace of a broad range of environmental initiatives in accordance with the ITO EN Group Policy on Plastics. (see page 46)67ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021To combat climate change, we have many (alertness and ability to make decisions). We also activities for lowering the CO2 emissions of our launched Oi Ocha O-Matcha Powder. In 2021, we business operations. Furthermore, climate change is a established a business alliance with Eisai Co., Ltd. for significant threat to our group because of the impact activities that contribute to enabling people to lead on the quality and yield of tea leaves and the yield long and healthy lives.amount. We are using various scenarios to study this We sell a diverse lineup of products created by threat. Our ability to continue to grow will depend using our unparalleled Japanese tea expertise in order on our actions related with environmental problems. to help our customers stay healthy. One example is Oi This is why I view environmental programs, activities Ocha Koicha, a food product with functional claims concerning human rights and all other ESG activities concerning the reduction of body fat. This product as the basis for the growth of the ITO EN Group.contains catechin gallate and is popular due to its A Health Creation Company for the Benefit of Our Customersgood taste and value as a health food. In March 2021, we started selling the Oi Ocha, First Picking series of tea leaves with the functional food claim of reducing body fat in people with a high BMI (Body The ITO EN Group is making steady progress toward Mass Index） due to the benefits of catechin gallate. our goal of being a Health Creation Company that As a Health Creation Company, we will continue our contributes to the good health and fulfilling lives for R&D programs involving tea and other products for a people globally. Green tea, our original business, has healthy life. We are also dedicated to making people been recognized as a health beverage for centuries. aware of the value of Japanese tea and to helping the As a supplier of many healthy products, we have the people of the ITO EN Group and their families enjoy resources and strengths to achieve our goal. Scientific long and healthy lives. studies have demonstrated that theanine, one Our corporate logo is based on a four-leaf clover. component of the flavors of green tea, helps people This design dates back to the founding of our relax and improves sleep. In addition, catechins, the predecessor company Nihon Family Service Co., Ltd. major component of green teaʼs astringency, is an and embodies our wish for the happiness of our antioxidant that is known to provide protection against employees and their families. I want the ITO EN Group lifestyle diseases.to be an organization where everyone is happy and Collaboration with companies in other industries proud to be a member of and where customers desire is another way that we are using tea to contribute enjoying ITO EN products. Our goal is more growth to the health of people around the world and as a highly trustworthy organization as we establish a helping them enjoy fulfilling lives. One aspect of this position as the worldʼs preeminent tea company. cooperation is research concerning the link between Japanese tea and good health. For example, ITO EN, Shimadzu Corporation and MCBI (Molecular and Clinical Bioinformatics) Inc., a start-up company originating at Tsukuba University, conducted clinical tests to assess the ability of Matcha consumption to reduce the decline in cognitive functions. In December 2020, we started selling Oi Ocha Omatcha, a beverage designated as a food product with functional claims, that may increase the accuracy of cognitive functions President and CEOUsing experience and achievements to advance to the next stageThe President and Outside Directors Discuss Issues and GoalsExpectations and Challenges toward Health Creation CompanyOutside DirectorYutaka TanakaOutside DirectorHideo TakanoPresident and CEODaisuke HonjoTakano　I was elected an outside director at the July 2020 shareholders meeting. Since outings were restricted due to the pandemic, I had many opportunities to talk about ITO EN at home. I realized that almost all of the companyʼs products have health benefits. At board meetings, I saw that the company has a strong commitment to all stakeholders in addition to activities for earnings profits. Most of all, I am impressed with ITO ENʼs dedication to helping people stay healthy. Tanaka　For a long time, I was one of the many consumers who enjoyed ITO ENʼs tea products. Now I am seeing the company from the inside. I believe the companyʼs operations use the perspective of consumers, such as the development of packaging. In addition, this is a company that takes very good care of its employees. I think a key issue for ITO EN now is taking actions for growth on a global scale, while fulfilling a broad range of social responsibilities. Honjo　Your statements demonstrate that outside directors can use an objective view of ITO EN to see aspects of our operations that we often arenʼt aware of from inside the company. These views must be incorporated in the companyʼs management. I have known Mr. Tanaka for about 20 years. He has given me many suggestions with his third-party perspective. Since 2020, he has been providing this knowledge as an outside director. His input includes subjects outside his field of specialty. All of his opinions are from a fresh standpoint from the perspective of people like us who have worked at numerous departments of ITO EN for many years. 89ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Focusing on quality and healthy products to become a “Global Tea Company”Takano　「Progress in terms of the companyʼs infrastructure and products as well as its workforce will be needed for growth as a Health Creation Company. For the infrastructure, the functions of the Central Research Institute need to be further upgraded and research using collaboration with the academic sector and other cooperation are needed. I want ITO EN to sell more types of beverages with health benefits based on data. For the workforce, I want to see more investments involving employeesʼ health. In May 2021, ITO EN released the ITO EN Group Health Management Declaration. As stated in this declaration, success in todayʼs business climate requires sound physical and mental health for everyone at our group. People must be aware of the need for well-being with regard to society too.Honjo　Creating jobs is the primary social contribution of companies. All companies depend on their people. Companies that give people pleasant workplace environments will grow and achieve progress in other ways. More than ever before, companies must take actions that have a positive physical and mental influence on their employees. For industry-academic collaboration, ITO EN is working with MCBI, a start-up company originated at Tsukuba University, and Shimadzu Corporation for research concerning more ways to use Matcha to improve cognitive functions. ITO EN started as a tea company and should once again reaffirm its corporate identify as a tea company. We are not merely a producer of beverages. My goal is to make ITO EN an organization capable of supplying tea leaf products, beverages and many other products utilizing ingredients derived from tea throughout the world and, of course, in Japan.. This is my thinking as we work on creating our next medium-to long-term management plan. The quality of our products is central to all of our activities. We want our customers to enjoy our products. We also want to focus on making products that help people stay healthy. The ability to accomplish all of these goals is key to ITO ENʼs strength.this is a small source of happiness. Today, with more tension and confusion in the world than ever, I think ITO ENʼs tea products can help people be happy. This is why I think that ITO EN should work even harder on making people aware of the happiness that comes from enjoying Japanese tea in a variety of places.Tanaka　Different generations of people have different perceptions of staying healthy. ITO EN must have a thorough understanding of these differences. The same is true for overseas markets. As people become more interested in healthy life styles, I think we will see clear trends in health-related actions emerge, such as moves by some countries to impose a tax on high sugar products. ITO EN aims to be a Global Tea Company. This is a big dream that will entail conducting business while supplying products like unsweetened tea beverages that are appealing to health-conscious people.Honjo　No company other than ITO EN can aim to become a Global Tea Company. To accomplish this goal, our mission is to give people worldwide an understanding of Japanʼs culture of food and tea. Only ITO EN can develop all types of products that are derived from tea; we must continue to create these products. In recent years, Japanese food has become increasingly popular in Europe and Asia. We will make efforts to increase sales of Japanese tea as more people enjoy Japanese food.Tanaka　ITO EN needs to decide how to divide the keyword of health among different categories of products. The benefits of Japanese tea have been known for a long time. Are these benefits for all aspects of oneʼs health? Or are they for specific problems like body fat and cognitive functions? This is the spirit of “STILL NOW,” which means seeking what customers are still now dissatisfied with. I think ITO EN must target demand as much as possible, while always keeping in mind what customers are looking for. Takano　Japanese tea has always been associated with relaxing or taking a short rest. Taking a break like Takano　To become a Global Tea Company, ITO EN is supplying flavorful beverages and making people aware of the Japanese culture of tea while meeting demand worldwide for healthy products. Now ITO EN must decide how to use these strengths and market trends to increase the value of the ITO EN brand and heighten the companyʼs profile in many markets. Furthermore, focusing on the theme of health creation will make employees of the ITO EN Group aware that they are working at an organization that is more than supplier of beverages. The group is making contributions to solving social problems, especially issues involving health. Pride in belonging to our group will increase the motivation of everyone to realize their full potential. Honjo　The pandemic of COVID-19 coronavirus has made people more health conscious. But we are not a pharmaceutical company. What we do is to develop products that taste good and are good for your health. We must constantly meet the health-related needs of people by creating products that they can consume frequently. Almost all of the ingredients used in our products are natural, such as tea, barley, coffee beans and vegetables. We supply products after carefully selecting the ingredients, and taking other actions to confirm that the ingredients that people eat and drink are good for their health. Despite the challenges posed by the pandemic, I think this is a period of new opportunities for us.A Highly Distinctive Company Capable of Sustained ProgressHonjo　ITO EN aims to become a company that is like no other. I am confident that we can accomplish these goals. As Mr. Tanaka said, as a multitude of successful for more than 100 years. In the beverage changes take place in the business climate, we have industry, there are social issues involving the materials high expectations concerning the “Always Putting used, particularly concerning plastic marine debris. There is an urgent need for environmental measures in the Customer First” philosophy, which underpins the order to achieve sustainable growth and I plan to raise power of ITO ENʼs management and all activities of the the speed of adoption these measures. In addition, our group. Environmental issues are not simply problems goal at ITO EN is to supply products with quality and involving consumers or companies. People are worried flavors that are far above even the high levels of the about these issues from their respective standpoints. beverage industry. We aim to be a distinctive company Solving these issues will require dialogues with all that is unlike any other and that no one can imitate or categories of stakeholders. Route salespeople are catch up to.the front line of ITO ENʼs interaction with customers, and these salespeople are also playing an important role regarding environmental issues, which is a major underlying strength of ours.Tanaka　Companies have numerous types of social responsibilities. As ITO EN aims to become a Global Tea Company, what measures are needed regarding these responsibilities? I think ITO EN must take many actions to firmly establish its product brands and the corporate brand. Consumers should trust these brands and know they can buy ITO EN products with confidence. Furthermore, ITO EN should supply more information about its initiatives to address social and environmental issues overseas. Many people want to know what ITO EN is doing about the Sustainable Development Goals (SDGs).. Making these kinds of people supporters of ITO EN will contribute to making us an organization that can remain successful for 100 and even 200 years. Takano　The entire ITO EN Group needs to be focused on the goals of becoming a viable company for the next 100 years and being a distinctive company Honjo　I agree with Mr. Takano. The ITO EN route sales system allows our salespeople nationwide to visit our customers and talk with them. They deliver merchandise and collect feedback directly from customers. These activities also help ITO EN deal with environmental issues and to supply products with outstanding quality and flavors.We will continue to place importance on dialogues with our customers and all categories of our stakeholders. Our goal is to differentiate ourselves from competitors by operating as a Health Creation Company with distinctive strengths that no other company can match. I also believe that aiming for this goal is at the heart of ITO ENʼs value and significance as a member of society. 1011ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Using experience and achievements to advance to the next stageITO EN Group–A History of Accumulated Product DevelopmentNet sales FY4, 2021 446.2 billion yenIn 1984, ITO EN invented the worldʼs first green tea beverage̶canned Sencha (green tea)̶ahead of other firms in the industry, and began developing the green tea beverage market. Since then we have developed numerous world and industry first technologies and delivered a steady stream of innovative products, including the launch of the Oi Ocha brand in 1989, which is now consumed in more than 30 countries around the world. Today, working under our management principle of “ Always Putting the Customer First, ” based on our product development concepts of “natural,” “healthy,” “safe,” “well-designed” and “delicious,” and as a “Health Creation Company,” we aim to be a “Global Tea Company” that supports the enriched lifestyles that contribute to the “health” of customers around the world. We have worked to establish our position̶primarily in Japan̶as a comprehensive beverage manufacturer, producing both tea leaves and tea beverages,and are working as a Group to achieve sustainable growth by strengthening our brands and creating synergies.1966 launched packaged green tea1980 Launched canned oolong tea1985Launched canned Sencha (green tea)1989Launched the Oi Ocha brand1990Launched green tea in PET plastic bottle.1996Launched the current mainstream-sized (500 ml) PET plastic bottle product.2000Launched products in heated PET plastic bottle.2019Oi Ocha using microwaveable PET plastic bottle2019、2020Foods with functional claims of Oi Ocha brandIn 1966, established Frontier Tea Corporation, ITO ENʼs predecessor.In 1969, changed the Companyʼs name to ITO EN, LTD.Create and develop the unsweetened tea beverage marketIn 1980, launched the worldʼs first canned oolong tea.In 1985, launched the worldʼs first canned Sencha (green tea)In 1989, launched the Oi Ocha brand.Create new drinking opportunities to enjoy teaIn 1990, launched green tea in PET plastic bottle.In 1996, launched 500ml PET plastic bottle product.In 2000, launched products in heated PET plastic bottle.Promotion of container resource recyclingIn 2019, Oi Ocha using microwaveable 345ml PET plastic bottle, and using 100% recyclable PET plastic bottle.In 2020, set a goal to increase the ratio of recycled materials (including biological sources) used in PET bottles to 100% by 2030.Providing the heath value of tea through productsIn 2019, launched Oi Ocha, a food with functional claims, that reduces body fat In 2020, launched Oi Ocha, a food with functional claims that enhances the accuracy of cognitive function through the theanine and tea ingredients.1986Launched National Land Vegetable1992Launched JujitsuYasai (vegetable and fruit mix juice)2002Launched Kenko Mineral Mugicha2004Launched Ichinichibun no Yasai2007Launched TULLYʼS COFFEE BARISTAʼS SPECIAL2009Launched first canned coffee under the TULLYʼS COFFEE brand2011Launched Chichiyasu brand products2012Launched Mainichi-ippai no Aojiru2015Launched MATCHA GREEN TEA as global brandBrand development linked to “Tully’s Coffee” shopsIn 2006, Tully’s Coffee Japan became a consolidated subsidiary and launched chilled coffee beverages, and in 2009 launched the first canned coffee under the Tully’s Coffee brand.Creation of vegetable drink marketLaunched carrot-based vegetable drinks when tomato-based vegetable drinks were the mainstream.In 1986, launched National Land vegetable in 1992, launched Ichinichibun no Yasai in 2004.Leading the barley tea marketIn 1988 and 2002, launched canned barley tea, and Kenko Mineral Mugicha,respectively.Developing Chichiyasu brand productsIn 2011, Chichiyasu became a consolidated subsidiary and launched the Chichiyasu brand product Asa no Yoo.Developing global brand products for overseas marketsIn 2015, launched global brand tea bag ITO EN MATCHA GREEN TEA.Leading Aojiru (barley grass green juice) marketIn 2012 and 2018, launched Mainichi-ippai no Aojiru paper pack, and PET plastic bottle respectively.19601970198019902000201020152020Jun. 1979 Signed a distribution agency agreement with production at ITO EN Australia PTY. LIMITED.Jun. 2006 Obtained shares of Mason Distributors, Inc. May 2011 Obtained shares of Chichiyasu Company, Jun. 2016 Constructed Matcha Kobo (a specialized Jul. 1987 Established ITO EN (USA) INC. in Hawaii, USAMay 1992 Listed its stock on the over-the-counter market.Sep. 1994 Established ITO EN AUSTRALIA (based in Florida, USA), which engages in the nutritional supplement business.PTY. LIMITED in Australia.Oct. 2006 Obtained shares of FoodX Globe Co., Sep. 1996 Became a listed company on the Second Section of the Tokyo Stock Exchange.Ltd. (now Tullyʼs Coffee Japan Co., Ltd.), which operates the Tullyʼs Coffee chain.Oct. 1998 Stock advanced to the First Section Sep. 2007 Stock listed as Class 1 preferred stock on the of the Tokyo Stock Exchange.May 2001 Established ITO EN (North America) INC. in New York, USA.Oct. 2004 Built a new crude tea leaf plant and commenced First Section of the Tokyo Stock Exchange.Mar. 2008 Concluded an exclusive distributor contract for the sale of Evian natural mineral water in Japan with the DANONE Group (headquartered in France).Feb. 2010 Established GREEN VALUE CO., LTD., which engages in the maintenance and procurement of automated vending machines.which manufactures and sells dairy products.Jun. 2012 Established ITO EN Asia Pacific Holdings Pte. Ltd. in Singapore.Sep. 2012 Established ITO EN BEVERAGE (SHANGHAI), Ltd. in China.Oct. 2012 Obtained shares of NEOS Corporation, which engages in automated vending machine business operations.May 2013 Established ITO EN (Thailand) Co., Ltd. in Thailand.Jul. 2013 Established PT ITO EN ULTRAJAYA Feb. 2015 ITO EN (North America) INC. obtained the shares of Distant Lands Trading Co., which is involved in the cultivation and sale of coffee beans mainly in the United States.matcha production plant) on the site of Shizuoka Sagara Factory.Sep. 2016 Constructed Kobe Factory in Kobe-shi, Hyogo, which performs finishing processes for tea leaves used in green tea beverages and other beverages.Mar. 2017 Received Ministry of Health, Labour and Welfare (MHLW) approval for the Business Skill test for ITO EN Tea Taster, as the first in-house business skill test to be certified after the 2016 certification system revision.to validate the effectiveness of matcha in preventing dementia, in association with Shimadzu Corporation and MCBI (Molecular and Clinical Bioinformatics) Inc.WHOLESALE in Indonesia.Jun. 2018 Agreement reached to conduct clinical trials Feb, 2021 Guinness World Records certified the Oi Ocha brand for the third consecutive yearas the natural- and healthy unsweetened ready-to-drink (RTD) green tea beverage sales (January–December 2020, actual results)May, 2021 Business alliance agreement with Eisai Co., Ltd. regarding coexistence and prevention of dementia.ITO EN Group HistoryAug. 1966 Established Frontier Tea Corporation,ITO ENʼs predecessor, in Shizuoka-shi,Shizuoka.May 1969 Changed the Companyʼs name to ITO EN, LTD.Feb. 1972 Introduced a high-speed automatic packaging machine manufactured by Industrial Gesellschaft in Switzerland. Developed vacuum packing technology to preserve the freshness of tea leaves.May 1974 Constructed Shizuoka Sagara Factory at Sagaracho, Haibara-gun (now Makinohara-shi), Shizuoka.China National Native Produce and Animal By-products Import and Export Corporation to import oolong tea for the first time in Japan, and began selling oolong tea.1240030020010013ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Using experience and achievements to advance to the next stageFinancial and Non-Financial HighlightsFinancial Data (excluding Non-consolidated Sales by Channel )Net Sales and Net Income attributable to owners of parentOperating Income and Operating Income RatioOverseas Sales and Overseas Sales RatioCommon stock EPS and Total Return Ratio Net Sales　 Net Income attributable to owners of parent Operating Income　 Operating Income Ratio Overseas Sales 　 Overseas Sales Ratio Common stock EPS　 Total Return Ratio494,793 504,153 483,360 475,866 13,69314,46212,553446,281 (million yen)4.6%4.5%4.5%21,774 22,043 22,819 4.1%19,940 3.7%16,675 (million yen)7,7937,011(million yen)8.2%40,362 7.3%34,863 7.6%7.5%7.9%38,168 36,282 35,355 (million yen)92.1%74.0%48.5% 48.9%43.5%4040404040( yen)FY4/2017FY4/2018 FY4/2019 FY4/2020 FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021Total Assets and Equity Ratio Total Assets 　 Equity RatioCapital InvestmentNon-consolidated Sales by Channel44.8%47.3%49.2%51.0%45.6%302,405 301,167 303,981 290,651 333,065 (million yen)11,06210,0069,9908,1357,199 (million yen)Cash FlowsROE27.0 Operating cash flow　 Investment cash flow　 Free cash flow　25.326.124.725.3(billion yen)18.813.915.415.510.5%9.0%9.9%17.8(billion yen)others16%5.2%4.7%CVS25%∆8.2∆11.3∆10.6∆9.2∆7.5(billion yen)vending machine14%FY4/2021　ITO EN, Ltd. Non-consolidated sales352.7 billion yensupermarket46%FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021Non-financial Indicators (ITO EN, Ltd.)Female Employee and Manager RatioFemale Employee　 Female Manager Ratio10.5%10.7%11.3%11.2%2.6%2.6%2.8%2.3%10.0%2.0%Number of Employees Taking Child Care Leave and Percentageof Employees Returning to Work after Child Care Leave Number of Employees Taking Child Care Leave　Percentage of Employees Returning to Work after Child Care Leave100.0%100.0%95.2%97.2%85.0%4327606168Employment Rate of People with DisabilitiesPaid Leave Acquisition Rate2.11%2.07%2.21%2.23%2.43%52.0%53.9%47.0%35.2%37.5%FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/2021FY4/2017FY4/2018FY4/2019FY4/2020FY4/20211415ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Health Checkup RateStress Check Consultation RateFood Recycling Rate100%100%100%95.5%96.3%97.2%96.0%94.7%91.8% 92.6%FY4 2019(target base year)FY4 2020FY4 2021Year-on-year change rate from FY2019FY4/2019FY4/2020FY4/2021FY4/2019FY4/2020FY4/2021FY4/2018FY4/2019FY4/2020 FY4/2021Bottle-to-Bottle All PET Bottle Recycling Rate Bottle-to-Bottle Oi Ocha All PET Bottle Recycling Rate50%Goal 100%goal2%5%7%10%以上12%14%4%FY4/2019 FY4/2020 FY4/2021 FY4/2022 FY4/2024 FY4/2031 FY4/2019FY4/2020FY4/2021CO2 Emission Ratio Through The ITO EN Value Chain ( The CO2 emission ratio cited here is for the fiscal year 2021)ProcurementProductionLogisticsSales and DistributionAdministration and othersWasteRaw materials / materials39.1%Vending machines, display cases and retail stores13.6%Other activities (Business locations, capital goods, business trips and commuting, etc.)3.9%ITO EN plants1.4%ITO EN sales vehicles2.5%Outsourced production plants22.5%Outsourced transportation8.6%Goal 100%FY4/2025 goalWaste generated from business operations1.2%Disposal of sold products7.2%FY4 2019(target base year)FY4 2020FY4 2021Year-on-year change rate from FY2019-19.0%-38.5%1. CO2 emissions amount, actual resultsScope1： Direct emissions due to use of fuel by the company itself Scope2： Indirect emissions accompanying use of power purchased by the companyTotal (thousand t-CO2) Scope 3 emissionsCategory1 Purchased goods and services2 Capital goods3 Fuel and energy-related activities that are not included in Scopes 1 and 24 Transportation and distribution (upstream)5 Waste generated in operations 6 Business trip7 Employee commuting8 Leased assets (upstream)9 Transportation and distribution (downstream) 10 Processing of sold products11 Use of sold products12 End-of-life treatment of sold products13 Leased assets (downstream)14 Franchises15 InvestmentTotal for Scope 3 (thousand t-CO2)Scope 3 emission intensity (t-CO2 / million yen)Total for Scopes 1–3Emission intensity 1–3 (t-CO2 / million yen)ITO EN non-consolidated net sales (million yen)*The numbers are rounded, so the total may not match.261439581216861012N/AN/AN/AN/A58118N/AN/A8832.24241236534176801012N/AN/AN/AN/A56111N/AN/A8172.16FY4 2019290693599222.34394,4958522.26377,7877602.16352,7322. Water resources amount, actual results1) ITO EN, LTD.Usage by water sourceRivers, swamps, and othersTap waterTotalDisplacement amount by drain destinationRivers, swamps, and othersSewageOthers (water canals, watering mountains, etc.)Total *Scope of aggregation of in-house water source：ITO EN, LTD. (company-owned domestic plants and research centers, buildings and business locations).*The numbers are rounded, so the total may not match.FY4 20191555502112) Beverage manufacturing contractorUsage by water sourceGroundwater Tap water Industrial water Total Displacement amount by drain destinationRivers, swamps, and othersSeaSewageOthers Total *The total range of beverage manufacturing contractors covers the production of ITO EN products out of the total production volume.Includes some estimates.*The numbers are rounded, so the total may not match.FY4 202012,5771,2723083114,157　23123547113665912N/AN/AN/AN/A55104N/AN/A7252.06FY4 202023666301FY4 2020141530194FY4 202016,1482393,76020,147-8.4%-10.5%-9.1%-6.3%-24.3%-7.7%-1.9%-1.4%−−−−-5.2%-11.9%−−−17.9%−8.1％−17.6％−7.7％−10.6％(thousand m3)FY4 202123866304FY4 2021143550198(thousand m3)(thousand m3)(thousand m3)FY4 202114,0741913,43217,698FY4 202111,922929276013,1271617ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Using experience and achievements to advance to the next stageValue Creation Model based on “Always Putting the Customer First”To supply quality products and services consistently, ITO EN uses a “Voice System” (internal suggestion system) originating from complaints and requests received from customers, along with distinctive strengths that include a production infrastructure extending from fields to factories. Our value circle encompasses “Always Putting the Customer First,” being a source of value for stakeholders, sustaining profitable growth and contributing to a sustainable society as we take the actions needed to become a Global Tea Company.ITO EN Groupʼs Management Principle“Always Putting the Customer First”Always Putting the Customer First, Make Integrity Our Stock in Trade, Spare No Effort and Earn the Confidence and Trust of SocietyInputsValue Perspective and Business ModelProvision of Value to StakeholdersMarketing capabilitiesbased on contact with customers Number of suggestions made using the Voice system : 16,083 suggestions Sales locations (Japan) : 196 locationsMarket-creating R&Dcapabilities and technologies Joint research : 14 projects Number of tea-related patents owned : 114 patentsRobust network with suppliers Crude tea procurement capacity, which accounts for about 1/4 of the total domestic crude tea production Production volume and tea plantation area secured through the Tea-Producing Region Development Project : 7,523 t / 2,207ha Beverage production outsourcing partners : approx. 50 plants Nationwide 5-block production and logistics systemDiverse human resources Professional qualification system based on meritocracy Number of sales personnel approx. 3,500 persons Number of qualified ITO EN TEA TASTERs (Ministry of Health, Labour and Welfare in-house certification system) : 2,237 persons, and 57 overseas Promoting active roles for female employeesSound financial base Financial credit rating : “A+” (by both R&I and JCR) Equity ratio : 45.6%Growth by practicing CSV management andStrengthening ESG priority issuesConsumer issuesCommunity and societySupport for healthy and enriched lifestylesConsumerProcurementUnique raw materials procurement such as tea production area development projectsPromoting sustainable agricultureSolving community issuesRetailerSupplierValue circle to build a competitive advantageProduct Planning and Development5 concepts for product development (natural, healthy, safe, well-designed, delicious) market creativityResearchResearch and technological development on health effects of beverages and food materials such as tea and vegetablesITO EN GroupʼsManagement PrincipleAlways Puttingthe Customer FirstSales and DistributionCommunity-based route sales and marketing activitiesProduction and LogisticsFabless Method Collaboration with partnersGlobal environmentThe spirit of “STILL NOW”Voice system(Internal proposal system)Product development conceptNatural, Healthy, Safe, Well-designed, DeliciousReducing environmental impactthrough cooperation with partner companiesLocal CommunityShareholdersFinancial institutionEmployeeSustaining profitable growth andshareholder returnsPromoting health and productivitymanagement and active rolesfor diverse human resourcesContributing to a sustainable societyiBecomng a company that creates health value and lasts for 100 yearslGobal Tea CompanyAs of April 30, 2021 (*number of qualified ITO EN TEA TASTERs as of May 1, 2021)Corporate GovernanceHuman Resources Management Finance ManagementCorporate Strategy1819Sustaining profitable growth ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021Using experience and achievements to advance to the next stageITO EN Group Material ESG IssuesIn order to drive CSR management, in April 2012, the ITO EN Group adopted the ISO26000 international standard as its compass, and established seven key themes in line with the standardʼs core subjects: organizational governance, human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development. We have identified three of those themes in particular as material issues for the ITO EN Group: consumer issues, community and society, and global environment.ISO26000- Seven Core Subjects and IssuesOverall approach1. Organizational governance4. The environmentCommunityinvolvementand developmentHumanrightsOrganizationalgovernanceConsumerissuesOrganizationLaborpracticesFair operatingpracticesTheenvironment●Governance　●Social　●Environmental2. Human rights① Due diligence② Human rights risk situations③ Avoidance of complicity④ Resolving grievances⑤ Discrimination and vulnerable groups⑥ Civil and political rights⑦ Economic, social and cultural rights⑧ Fundamental principles and rights to work3. Labor practices① Employment and employment relationships② Conditions of work and social protection③ Social dialogue④ Health and safety at work⑤ Human development and training in the workplace① Prevention of pollution② Sustainable resource use③ Climate change mitigation and adaptation④ Protection of the environment, biodiversity and restoration of natural habitats5. Fair operating practices① Anti-corruption② Responsible political involvement③ Fair competition④ Promoting social responsibility in the value chain⑤ Respect for property rights6. Consumer issues① Fair marketing, factual and unbiased information and fair contractual practices② Protecting consumersʼ health and safety③ Sustainable consumption④ Consumer service, support and complaint and dispute resolution⑤ Consumer data protection and privacy⑥ Access to essential services⑦ Education and awareness7. Community involvement and development① Community involvement② Education and culture③ Employment creation and skills development④ Technology development and access⑤ Wealth and income creation⑥ Health⑦ Social investment*Source: ISO26000: 2010 Guidance on Social Responsibility Material IssuesSocial issuesConsumer issuesCommunity and societyGlobal environment・Diversification of lifestyles・ Healthy life expectancy (Body fat, blood issues・ Japanese agriculture and tea industry cholesterol, cognitive function, and others)・ Changes to workstyles and ・Marine plastic waste problem・Depletion of resources and waste・ Global warming and water resource communication・Remarkable population ageingproblems・ Product development and sales to contribute to health unsweetened beverage ratio 75%project・ The tea-producing region development ・ ITO EN Group Medium- to Long-Term ・ Communicating the appeal of tea related ・Used Tea Leaves Recycling SystemEnvironmental GoalsITO EN Initiatives・ Research and development and dissemination of health value of tea ITO EN Health Forum and othersculture and enlightenment activities through ITO EN TEA TASTERs・ITO EN Group Human Rights PolicyGroup policies and goals related to society and the environmentITO EN Group Medium- to Long-Term Environmental GoalsContainers and packaging：　・3R (recycle, reduce, replace & reuse) + clean (environmental protection)・ Aim to increase the ratio of recycled materials used in PET bottles to 100% by 2030CO2 emission reduction：・ FY2030　 Scope 1, 2：Total amount reduced by 26%, Scope 3 basic unit reduced by 26%・ FY2050 Scope 1, 2 :Total amount reduced by 50%, Scope 3 50% reduction in basic unit * CO2 emissions reduction* Target base year: FY2018Reduction of water usage：・FY 2030 16% reduction of water usage intensity ・FY 2018, 5.0m3 / kl →FY 2030, 4.2m3 / kl* Basic unit: Water consumption per 1 ㎘ of productionITO EN Group Human Rights PolicyFormulated the Policy based on the UN’s Guiding Principles on Business and Human Rights.▶https://www.itoen.co.jp/csr/human_rights/　ITO EN Group Health Management Declaration1. Maintaining and improving physical and mental health2. Creating a safe and comfortable working environment3. Promoting work-life balance▶https://www.itoen.co.jp/csr/labour/kenkousengen/Material Issues and Main KPIsMaterial IssuesMain KPIsMajor progress (April 2021 FY)Main related SDGsPromotion of health value (health and nutrients)・ Proposing products and eating habits that contribute to health・ Research and announcements relating to health value of foods・Foods with Functional Claims (FFC) ： 18 products ・ Research and announcements relating to health value of foods:12Product packaging and appropriate information disclosure”・ Appropriate labeling of origin of raw materials・ Development of environmental friendly containers・ Revision of guidelines for proper display ・ Promotion of PET bottles weight reduction ConsumerissuesQuality control・ Thorough quality management in the supply chain・ Implementation of regular audits at main overseas raw material suppliers and manufacturing contractors・ Continued ISO9001 and FSSC22000 certification・ Continued ISO9001 and FSSC22000 certification ・ Formulation of “ITO EN Group Health Management Declaration”Promotion of health-based management・ Development of a work environment that considers the health and safety of employees (Development of preventive management system for health problems, and others)・ Certified as a “good health management corporation” for 4 consecutive years　　　　　　　　・ Formulation of “ITO EN Group Health Management Declaration”Community and human rights issuesCommunityand society・ Promotion of efforts to respect human rights through business activities・ Strengthening relationships with local communities and external organizations・ Strengthening awareness of tea culture by utilizing the ITO EN Tea Taster System ・ Formulation of “ITO EN Human Rights Policy”Promotion of cultural activities· Enhancing activities to promote awareness of Japanese culture and tea culture, through initiatives such as the ITO EN Oi Ocha New Haiku Contest and seminars on how to prepare tea.・ Number of applications of ITO EN Oi Ocha New Haiku Contest : more than 2 million・ Tea culture utilizing online and SNS Implementation of enlightenment activitiesPromoting sustainable agriculture· Expanding crude tea production volumes and plantation areas under the Tea-Producing Region Development Project (new tea plantations business)・ Goal of crude tea production volumes and plantation areas :achieved 2000ha・ New tea plantations business:over 500haResponse to climate change· Reduction of CO2 emissions in overall business activities・ Comparison with FY 2018 Scope 1 & 2 : 9.1% reduction Scope 3 : 8.1% reduction⇒See page 17 for environmental resultsWater management・ Formulation of water reduction targets and establishment of management processes throughout the supply chain・ Formulation of medium- to long-term environmental targets for water resourcesContainers and packagingGlobalenvironment・ Promotion of the use of recycled pet materials (Recycled pet usage rate 7%)・ Promotion of weight reduction of PET bottle”· Advancing weight reduction and use of recycled materials in PET plastic bottles; by 2030, 100% use of recycled materials, etc.* for PET plastic bottles*Includes bio-derived materials · Advancing the use of biodegradable materials for straws and tea-leaves packaging materials· Advancing the use of aluminum-free paper pack containers· Reducing use of raw materials for containers and maintaining lightweight ratios· Reducing product waste· Maintaining a recycling rate of 90% or higher for foodstuffs· Maintaining a recycling rate of 100% at green tea packaging plants· Promoting the recycling of used tea leavesWaste and recycling· Foodstuffs recycling rate : 92.6%· Recycling rate of green tea packaging plants : 100% Conservation of biodiversity· Maintaining registered varieties under the Tea-Producing Region Development Project· Obtaining GAP certification for suppliers under the Tea-Producing Region Development Project· Obtaining 100% GAP certification for the Tea-Producing Region Development Project ⇒See page 24 2021ITO EN INTEGRATED REPORT 2021ITO EN INTEGRATED REPORT 2021The True Potential of Tea for the Future – Tea SustainabilityJapanese tea is a traditional beverage that has remained a central element of peopleʼs lives even as life styles underwent dramatic changes over the course of centuries. The ITO EN Group created new markets for tea by transforming a beverage that was consumed mainly indoors into a beverage that can be enjoyed at any time and place. Making this possible is a production system beginning with tea growers. We altered every step beginning with producing tea leaves to reflect changes in how people drink tea. Activities also include measures resulting from discussions with external stakeholders. There are a variety of measures extending from studying the health benefits of tea to recycling used tea leaves and containers. We remain dedicated to creating innovative ideas and taking on new challenges to continue playing a role in the sustainability of the tea industry.The creation and growth of the unsweetened beverage market A business starting with farms and extending to research about good health, the development of products and the recycling of resourcesEnjoying tea outdoors→From drinking tea indoors brewed in a pot to enjoying tea at any time and place The creation of the unsweetened beverage marketDuring the Edo Period, the emergence of something called a “tea bento” made it possible to drink tea outdoors. Beginning in the 1980s, demand for tea beverages increased as these new types of beverages were developed for sale at stores along with snacks like nigiri sushi and bento lunches. One result was the birth of the market for unsweetened tea beverages. * A tea bento is a combination of a bento set for a meal and utensils needed to prepare tea. This allowed people to enjoy fresh tea with their lunch while sightseeing or on some other outing.Tea lunch box from the Edo periodInformation about the health benefits of Japanese tea based on r