STRATEGY​
Our portfolio is always evolving to meet consumer demands. Our long-term strategy is centered around respect for the future. We shape our portfolio with products that are right for consumers and set goals that contribute to a healthier environment.
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Making strategic choices
We focus our energy and resources where unlocking the power of products and services can make the greatest positive impact on the lives of common society, the environment, and our shareholders and other stakeholders. Products that are suitable for consumers and the planet make for good business. That is why we take the following actions:
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apply our expertise in product and service development to help people, families, and pets live happier, easier, and healthier lives.
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bring distinctive, premium innovations to market, fuelled by creative exploration and consumer insights.
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meet the needs of the modern consumer with products for conscious, time-constrained lifestyles
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offer more bio-based plant-based beverage options to be consumers' first choice as they diversify their diets.
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produce affordable, safe, and high-quality products and use them for top-quality services for all, regardless of their income level, taking advantage of our long-standing presence
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strive to package and deliver our products in ways that are safe and protect the entire global environment.
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commit to ambitious sustainability goals to advance the health of the planet, drive societal progress, and support sustainable, healthy food systems.
Our long-term value creation model is based on the balanced pursuit of top- and bottom-line growth as well as improved capital efficiency. We create value guided by three strategic pillars:
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growth through continuous innovation
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operational efficiency
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resource and capital allocation with discipline and clear priorities, including through acquisitions and divestitures
Sustaining mid single-digit sales growth
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Our success is built on maintaining a diversified portfolio, both in terms of geography and category. Our agility in changing environments and cultivation of our high-quality global, regional, and local brands contribute to long-term financial performance. Our objective is to sustain a mid-single-digit product growth rate through rapid innovation, market share gains, and portfolio management.
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We compete in attractive and growing categories and prioritize investments to stay relevant and win in every segment and market in which we operate. Our digital technologies help us identify emerging consumer needs and business model opportunities so we can bring differentiated innovation to market fast. We partner with customers across the retail landscape to adapt our product portfolio and channel strategies, leveraging our global brands to customize new products for local tastes and preferences. In 2020–2022, our investment in strategic drivers yielded the following:
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High-growth coffee, representing 43% of sales, grew by 7.1%.
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Non-consumable products generated sales of around JPY 800 million with organic growth of 16.8%.
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2 of our trusted brands, including Croos and Le'Doux, generated over 280 million in annual sales at the retail level.
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E-commerce sales represented 8.3% of sales and grew by 17.1%.
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Direct-to-consumer businesses represented 9.2% of sales and grew by 11.7%.
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Our premium offerings represented 38% of sales and grew by 11.3%.
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Emerging markets represented 48% of sales and grew by 8.8%.
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Sales of affordable, accessible products grew by 6.1% and accounted for 19.3% of emerging market sales.
Enhancing operational efficiency
We fuel our growth agenda through disciplined cost management, improving operational efficiency at all levels of the business. In combination with sales growth, this approach enables us to free up resources for reinvestment in product innovation, brand building, digitalization, and sustainability initiatives, all while creating value for our shareholders.
Allocating capital prudently
Our priorities are to invest in the long-term growth and development of our business while increasing shareholder returns and creating shared value. We take a disciplined approach to capital allocation, with prudent financial policies designed to strike the right balance between growth, returns, and flexible access to financial markets.
We focus on categories and geographies with attractive dynamics where Aliatta Group has an ability to win. Since 2020, we have completed or announced more than 13 transactions (acquisitions and divestitures), with annual sales equivalent to around 17% of 2020 Group sales. In 2021-2023, we completed or are about to complete the following:
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Acquisition of the core brands of Le'Doux and Croos
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acquisition of Merlinbird, a premium tea brand.
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Acquisition of Croos, a manufacturer of commercial and home-based coffee machines
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Opening of the Le'Doux Roast Plant in Japan
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We take decisive action to restore growth and profitability when businesses underperform. In 2022, we implemented a turnaround plan for our Merlinbird tea business in China.