As of April 2009, Suntory Limited will adopt the corporate structure of a pure holding company. Under the new corporate structure, Suntory Beverage & Food Limited will manage domestic and international food and beverage business, and the newly established Suntory Wellness Limited will manage health food and beverage business. The companies will continue to work with the Suntory Group to develop business aimed at sustainable growth and greater profitability, goals in our medium-term food and beverage management vision.

Domestic Food and Beverage Business

In Japan, Suntory continues to build core brands such as BOSS and Iyemon, cut supply chain costs for better profit, and manage advertising budgets effectively to improve our earnings potential.

Overseas Food and Beverage Business

In growing markets in China, Southeast Asia, Oceania, and elsewhere, we are building Suntory brands and seeking further business growth under accelerated implementation of global strategies of the Suntory Group.

Consumer Health Products Business

Greater health consciousness is enlarging the scale of this market, and Suntory has established an independent company for further growth and business expansion as a key source of group earnings.

Domestic Food and Beverage Business

Review of 2008

While building core brands such as BOSS, Suntory Natural Mineral Water (Tennensui), and Pepsi, we also introduced Starbucks DOUBLE SHOT and other new products. In particular, completion of a new plant in central Japan (Buna No Mori Plant in Okudaisen, Tottori Prefecture) helped expand sales of Suntory Natural Mineral Water, which grew 23% over last year's level.
As a result, sales of 352.9 million cases (up 1% from 2007) were recorded in Suntory soft drink business.

Strategy for 2009

As market competition intensifies, we will build core brands and seek steady growth as we continue cutting supply chain costs and managing advertising budgets effectively. These efforts will help us achieve our sales target this fiscal year of 362 million cases (up 3%), reinforcing our number two position in the domestic soft drink market.

Core Brands

BOSS: Solidifying brand position across categories

Building on the four main varieties of Rainbow Mountain Blend, Indulgent Low Sugar Iitoko Drip, Sugar-Free Black, and Café Au Lait, in March Suntory will introduce a sugar-free canned coffee to enjoy after meals. Coffee lovers will have a wide selection to enjoy. The sales target this fiscal year is 69.5 million cases, up 1%.

Iyemon: Flavorful, enjoyable tea steeped in the Iyemon tradition

This year presents another opportunity for a variety of efforts to introduce more consumers to flavorful tea and the richness of the traditional, everyday Japanese culture it represents. As we refine the flavor and packaging, we will promote the tea in sales campaigns and advertisements to convey how flavorful, calming, and enjoyable tea can be, through the distinctive Iyemon image.
The sales target this fiscal year is 52 million cases, up 6%.

Oolong and Kuro Oolong Tea: Raising the bar in oolong tea

Suntory is also taking the opportunity this year to show people what makes oolong tea special, as we raise the bar in quality. In-store ongoing promotions include advertisements and sales campaigns that capture people's interest, as well as chances to taste the tea. These efforts will introduce a broad range of consumers to oolong tea, which itself is steeped in tradition.
The sales target this fiscal year for both types of tea combined is 46.5 million cases, up 1%.

Suntory Natural Mineral Water: Shoring up the leading brand position

Suntory Natural Mineral Water (Tennensui) is the leading brand in the mineral water market, and last year, a variety from western Japan (Okudaisen) was introduced. Many promotional activities are planned again this fiscal year to highlight this refreshing water, for which Suntory quality management reassures consumers of product safety. The Suntory mineral water portfolio is rounded out by several different imported brands, such as Contrex, offering a type of water for any occasion or taste.
The sales target this fiscal year for Suntory water business is 51.7 million cases, up 6%.

Pepsi: Reinforcing a solid position in the zero-calorie cola market

Pepsi Nex enjoys a solid position in the growing zero-calorie cola market, a position Suntory will reinforce this year through refinements in taste and additional formats in packaging. Large-scale promotions to be unveiled include ads and publicity events with impact. The sales target this fiscal year for Pepsi-branded products is 30 million cases, up 4%.

DAKARA: Updated, with DAKARA Vitamin Water

Health beverages DAKARA and Vitamin Water now have sleek, new packaging. Promotions of many kinds are planned for this year.
The sales target this fiscal year for DAKARA-branded products is 26.6 million cases, up 4%.

Overseas Food Business

Review of 2008

BOSS canned coffee is already quite popular in Singapore and Malaysia, and Suntory partner Thailand Tipco F&B launched DAKARA in October. Taking the initiative in activities that leverage Suntory brands, we also launched Iyemon in North America as Iyemon Cha (Iyemon tea).
Solid sales have been reported in the Asia-Pacific area by health food and processed food manufacturer and distributor Cerebos Pacific Limited and on the East Coast of America by soft drink bottler Pepsi Bottling Ventures, LLC.
October also saw Suntory's acquisition of New Zealand soft drink company Frucor, enabling further growth in soft drink business in the Asia-Pacific area.

Strategy for 2009

Active ongoing marketing will help establish and build Suntory brands in Southeast Asia (mainly in Thailand, Singapore, and Malaysia), China, and the U.S. Additionally, group companies Pepsi Bottling Ventures LLC in the U.S., Cerebos Pacific Limited in Singapore, and Frucor in New Zealand will be fulfilling leading roles in business growth.

Consumer Health Products Business

Review of 2008

Popular Sesamin E Plus, DHA&EPA+Sesamin E, ARA (arachidonic acid) and other supplements continue to enjoy stronger sales. New products Milcolla and Flavangenol + Ceramide have also proven popular. In September, acquisition of Connecto and the Botanicals brand marked Suntory's entry into the herbal products business. Results of this business have been favorable, with sales up 30% year-on-year.

Strategy for 2009

As of April, Suntory Wellness Limited will operate as an independent company. Through this company, Suntory will build and strengthen "Power of Nature" series brands (Sesamin E Plus, DHA&EPA+Sesamin E, ARA, and other products) and introduce new offerings to meet consumer needs.