Our view of Sustainability at F&LC

Sushiro, the world-class brand with attractive business from Japan

It was in 2023 that I became the Senior Executive Corporative Officer of FOOD & LIFE COMPANIES LTD. One of the reasons I decided to join the company was that, when I visited Sushiro as a customer some other time, I was impressed by the delicious and enjoyable food, and furthermore, I totally agreed with the company’s philosophy of creating this customer experience. At that time, all the families and groups in the restaurant enjoyed their meals with smiles on their faces. And their eyes were shining when they watched the menus and plates of sushi carried on the conveyor belt in the great atmosphere. I genuinely thought it was very impressive and there is no other place like this restaurant where people can enjoy meals with affordable prices. Data newly expanded to overseas. In the U.S., where I studied in graduate school for a year and a half, I was keenly aware of the changes in Japan’s presence in the world.

The time I spent here and the place where such delicious food is made and people become happy are the essence of Sushiro’s mission statement: “Tasty sushi for all. Tasty sushi for the heart.” I felt strongly the meaning of being able to create a new customer experience and directly contribute to the smiles of customers, while preserving the Japanese culture of sushi.

There is also the possibility of expanding business globally. In my previous work, I was assigned in Europe and Asia for about eight years, where I was engaged in marketing activities for a variety of Japanese industries, including automobiles, consumer electronics, and consumer goods. The lineup of Japanese companies active overseas has changed over the past 20 years. Some companies withdrew their businesses from overseas markets and only a limited number of companies newly expanded to overseas. In the U.S., where I studied in graduate school for a year and a half, I was keenly aware of the changes in Japan’s presence in the world.

What is the next industry for Japan that can make its mark on the world? I strongly felt that Sushiro’s business model, which delivers the delicious taste of Japanese sushi at an affordable price and, with the addition of technology, in a format that can be enjoyed by many people, would have a great chance in the world. This is exactly what the Sushiro Group’s VISION “Discovering new tastiness, Sharing moments of joy.” and Sushiro’s mission, as well as my career-long pursuit of “spreading the Japanese brand around the world” essentially matched.

What to achieve

Creating and refining the source of brand value with company members from Japan and overseas

What is important to us in our work is to hone our individual abilities as professionals, to make honest decisions, and to remember to respect those around us. Our work is a team play. There is always communication with others, and it is on this basis that we provide services to our customers. I became keenly aware of this when I was in charge of rebuilding the business in Hong Kong and managing the business in Taiwan at my previous job. Even though I could utilize my own marketing expertise there, I could not achieve anything without local knowledge and cooperation from the staff. I have seen many times over the years that as I have treated the staff with respect and experienced small successes together with them, they have got a different look in their eyes and their work has become more enjoyable. The important thing is the basic principle of working from the same perspective as the field staff. With this belief, after joining our group, I first volunteered to work at major-brands such as “Sushiro,” “Kyotaru,” “Kaiten-sushi Misaki” and “Sugidama” without revealing my position. Though it was only for two weeks, I had a great time learning about everything from the work of the kitchen staff such as dishwashing, making sushi and removing fish skin to the work of customer service staff at the restaurant. Through these tasks, I became aware of the hardships faced by the staff working on the front line and the issues that need to be improved. At the same time, I could feel the joy and significance of directly seeing the smiling faces of customers, making it a very fruitful experience.

Now, as the President & CEO, I intend to steadily implement our Medium-term Management Plan and at the same time work on strengthening our brand power. To this end, it is important for us to make a commitment to our customers by thoroughly improving our product procurement, which is the source of our brand value, store operations that enhance the value of customer experience, quality and hygiene controls, and compliance promotion activities. This is because we believe that only when customers realize these activities and support them will they become brand value and lead to business growth.

As our overseas business expands, we will continue to work on various initiatives in collaboration with our overseas and domestic businesses. We have adopted the organizational principle of “One Company” and have established an organizational structure that can be expected to produce synergy effects, for example, by having overseas executives also serve concurrently as domestic executives and vice versa, rather than keeping our overseas and domestic businesses separated. We will also promote seamless cooperation between the head office functions and the operating companies. Currently, the F&LC Product Division is providing global services for product procurement, and we will continue to strengthen this in the future. In terms of marketing functions, we will work to improve brand value by promoting overall brand management led by the F&LC headquarters. On the other hand, we believe that campaigns and sales promotions in each country and region need to be carried out by local members who understand the culture and customs, and we plan to promote marketing activities on both sides.

What we achieve

Creating and refining the source of brand value through domestic and international collaboration

What I value in my work is to hone my individual skills as a professional, make honest decisions, and never forget to respect those around me. Our work is teamwork. We always communicate with people, and then provide service to our customers. I became very conscious of this when I was in charge of restructuring our business in Hong Kong and managing the business in Taiwan in my previous job. Even if you can utilize the marketing know-how you have cultivated locally, you cannot achieve anything without local knowledge and the cooperation of your staff. I have seen many times how people’s perspectives change and work becomes more enjoyable as they treat their staff with respect and experience small successes together. The important thing is to work from the same perspective as the staff on the ground. After joining our group with this belief, I volunteered to work anonymously at major brand stores in Japan, such as “Sushiro”, “Kyotaru”, “Conveyor Belt Sushi Misaki”, and “Sushi Sake Sakana Sugidama”. Although it was only a two-week period, everything was a learning experience, from washing the sushi, making sushi, and skinning the fish in the kitchen, to serving customers in the dining area. Through these tasks, I was able to become aware of the struggles of the staff working on-site and the issues that need improvement, while at the same time feeling the joy and meaning of seeing the smiles of the customers in person, making it a very rewarding experience.

As President and CEO, I would like to steadily advance our medium-term management plan while also working to strengthen our brand power. To achieve this, it is important to make a commitment to our customers after thoroughly refining our product procurement, which is the source of our brand value, store operations that enhance the experience value of our customers, quality control, hygiene management, and activities that emphasize compliance. This is because I believe that it is only when our customers experience these things and support us that they will become brand value and lead to business growth.

As our overseas business expands, our overseas and domestic businesses will work together on various initiatives. We have set “One Company” as our organizational guideline, and instead of thinking of overseas and domestic businesses separately, we have established an organizational structure that can generate synergistic effects, for example, by having overseas executives serve in Japan and domestic executives serve overseas. We will also promote seamless collaboration between our headquarters and our operating companies. Currently, F&LC’s Product Headquarters provides product procurement services globally, and we will further strengthen this in the future. In terms of marketing, F&LC’s headquarters will lead the management of the entire brand and strive to improve the brand value. Meanwhile, we believe that campaigns and sales promotions in each country and region need to be carried out by local members who understand the culture and customs and have a deep understanding of the local area, and we plan to promote marketing activities from both sides.

For sustainable fisheries resource procurement

Co-creating with suppliers to strengthen competitiveness

In FY2024, we achieved steady and significant growth both domestically and overseas: the first Sushiro store in Beijing, which opened in Mainland China in August, has been a great success, and in the U.S., we are currently conducting market research through izakaya-style restaurants “Sugidama” (local brand name: Sakabayashi), which opened in Boston in April.

In Japan, we were able to achieve significant results. We developed a detailed understanding of the customer journey, determined which experience value to improve, and kept building up sales and marketing plans. Media performance also improved in the short term. Another major topic is “Digital Sushiro Vision,” also known as “Digiro,” a fusion of digital vision and rotating lanes, which was implemented on a trial basis at three stores in September 2023 and was so well received by customers that it was expanded to 19 stores in FY2024. Sushiro’s 40th anniversary campaign also made a significant contribution to our business performance. We took actively effective measures; introduced a “giving-back” product with 100 yen per plate including tax, hoping to please our customers even amid high cost of living, and also changed our communication strategy. As for our management, we have been able to maintain “this great taste at this affordable price” since our establishment, despite various changes in the business environment, including weak yen and soaring utility costs.

Global climate change is affecting business. The demand for farmed fish will increase in the future. In order to continue to provide our customers with products of stable quality, we are investing in each company, including producers upstream in the supply chain, and establishing joint ventures for the development of seedlings and feeds. We are also investing in other companies and promoting joint research to develop next-generation technologies. In this environment, we held a sustainability meeting in May 2024 with our business partners. The purpose of the meeting was to share and gain understanding of the Group’s desire to co-create a sustainable, recycling-oriented marine resource procurement model with our suppliers and to enhance our competitiveness. We believe that these efforts will lead to our Group’s growth and establish a competitive advantage.

Determination to take on the challenge of increasing corporate value

Enhancing human capital management and selecting and concentrating on growth areas

In the future, human capital management will become even more important and an essential element for companies to achieve growth. In FY2024, we began investing in people by improving maximizing and designing and implementing training programs by rank, such as assistant manager, store manager, section manager, and general manager. In order to further expand our overseas business, starting from this fiscal year, we will redesign the cycle of recruitment, education, development, and opportunity provision, including overseas operations. By advancing talent development, we aim to make it a key source of our competitive advantage. To this end, we will break down the silos (vertical divisions) between divisions to develop human resources, for example, by having them work back and forth between domestic and overseas sites, and sometimes even between the headquarters.

For further increase incorporate value over the medium to long term, in each business segment, we will closely monitor not only net sales, EBITDA, and operating profit, but also the management status of each store, while confirming ROIC for each country and region. For example, we will identify the winning areas in Mainland China and concentrate capital investment in those areas, promoting selection and concentration. From this perspective, we would like to concentrate our resources globally on Sushiro among our four major brands.

In terms of governance, we have positioned the role of the Board of Directors as managing and supervising business execution, and therefore have two internal directors and six outside directors. Outside directors are appointed from diverse backgrounds, taking into account their expertise and achievements, to facilitate decision-making and discussions that will drive the company’s growth.

I have assumed the position of the President & CEO, a heavy responsibility, but I will always consider our customers and stakeholders, make decisions with integrity, and achieve sustainable growth.

FOOD & LIFE COMPANIES Inc.

President and CEO