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Management Interview with an Outside Director Financial and Non-financial Highlights Past and Present KIRIN REPORT 2018 Message from Top Management Discussion with Management, Part1 Discussion with Management, Part2 Interview with an Outside Director CASE1 Kirin Ichiban Shibori Relaunch and Craft Beer Market Development CASE2 Pharmaceuticals for Worldwide Markets CASE3 Lactococcus lactis strain Plasma Stars in New Products CASE4 Advanced High-Efficiency Facilities at Myanmar Brewery History of the Kirin Group The Kirin Group Today Overview by segment and business for fiscal 2017 Management's discussion & analysis Financial & Non-Financial Highlights KIRIN REPORT 2016 To Our Stakeholders Long-Term Management Vision and Medium-Term Business Plan CFO’s Message Overview of the Kirin Group’s Business Kirin’s Foundation for Value Creation Interview with an Outside Director KIRIN REPORT 2015 KEY POINTS ABOUT KIRIN Long-Term Management Vision and Medium-Term Business Plan KIRIN’S GROWTH STRATEGIES A Conversation between Outside Directors Management Issues for Sustainable Growth (Group Materiality Matrix) Technology (R&D) Foundation SCM Foundation Human Resources Foundation Fellow Introduction 2019 Fellow Researchers and Research Themes 2018 Fellow Researchers and Research Themes 2017 Fellow Researchers and Research Themes About United Nations University-Kirin Fellowship List of Former United Nations University-Kirin Fellows Special Feature: Growth Strategies for the Health Science Domain Strategic Decisions in 2019 / Message from the Officer in Charge of Health Business Strategy Part1 Interview with the Executive Officer of R&D Strategy Part2 Creating Synergies with FANCL Corporation Strengthening Organizational Capabilities Enhancing Kirin Beverage's marketing capabilities Development of our human resources Strengthening Our Non-Financial Assets Honkirin and our marketing reform R&D Strategy:Technology creating trusted value Human resources strategies:Diversity and inclusion, culture for innovation Financial & Non-Financial Highlights Financial Highlights Non-Financial Highlights To Our Stakeholders Kirin’s Management Environment,Vision, and Strategies Progress with the Medium-Term Business Plan Issues and Future Initiatives Aiming to Be a Company That Is Completely Trusted Long-Term Management Vision and Medium-Term Business Plan Long-Term Management Vision Medium-Term Business Plan Recognizing the Challenges and Future Initiatives Kirin’s Foundation for Value Creation The Kirin Group’s Value Creation Marketing Research & Development Supply Chain KEY POINTS ABOUT KIRIN Business Structure / Earnings Structure Kirin's History of Progress Long-Term Management Vision and Medium-Term Business Plan Long-Term Management Vision Medium-Term Business Plan List of Former United Nations University-Kirin Fellows 2016 Fellow's Research Projects 2015 Fellow's Research Projects 2014 Fellow's Research Projects 2013 Fellow's Research Projects 2012 Fellow's Research Projects 2011 Fellow's Research Projects 2010 Fellow's Research Projects 2009 Fellow's Research Projects Close Home Drivers Core technology that assures value creation Core technology that creates accurate value: A competitive strategy combining R&D expertise and IP strategies Integrated Report Contents Integrated Report TopPage About Kirin Group Long-term Management Vision and Medium-Term Business Plan CSV Purpose&Commitments Message from Top Management Message from the Chief Financial Officer Message from Senior Executive Officer of CSV Strategy Scenario Analysis (TCFD) Holistic Approach to environmental issues Message from Senior Executive Officer of Health Science Strategy Interview with Independent Non-executive Directors INPUT INPUT Diversity and inclusion, culture for innovation Core-technology that assures value creation Consumer centric marketing expertise ICT accelerating value creation BUSINESS BUSINESS Food & Beverages domain Health Science domain Pharmaceuticals domain OUTPUT OUTPUT Financial and Non-financial Highlights Management Analysis Of Financial Position, Operating Results, And Cash Flows OUTCOME OUTCOME Health and well-being Community Engagement The Environment A Responsible Alcohol Producer Corporate Governance Corporate Governance Overview Management Structure Management, Leadership & Advisory Remuneration System for Executive Officers Compliance Kirin Group Tax Policy Risk Management Core technology that creates accurate value: A competitive strategy combining R&D expertise and IP strategies June 5, 2023 At the Kirin Group, “Core technology that creates accurate value” is one of our organizational strength that supports our innovation. In the coordination with business, research and development (R&D), and intellectual property (IP), we will make our competitive advantage and contribute to our sustainable growth. R&D based on fermentation and biotechnology We at the Kirin Group have developed technological capabilities and expanded our businesses, ranging from the Food and Beverages domain to the Pharmaceuticals domain, with fermentation and biotechnology as our foundation. In the Health Science domain, we have used the brewing technology and knowledge of raw material processing cultivated in the beer brewing business to draw out the health benefits of microorganisms and plants and create new products. We developed iMuse, a brand of soft drinks and supplements infused with Lactococcus lactis strain Plasma (LC-Plasma), and our focus on the functionality of hops led to the development of KIRIN KARADA FREE, an alcohol-free, beer-flavored beverage, and other foods with functional claims. Furthermore, Kyowa Hakko Bio is using fermentation technology that uses the power of microorganisms to mass-produce functional materials, including specialty materials such as Citicoline*1 and human milk oligosaccharide*2 (HMO), and expanding overseas as a B2B business. Kyowa Kirin’s development of their proprietary technologies, such as POTELLIGENT® and human antibody production technologies that produce therapeutic antibodies, has led to creating business through the creation of global products Crysvita and Poteligeo. We are investing R&D resources in priority domains based on the Group Materiality Matrix (GMM), which outlines key issues that must be addressed in order to exist sustainably and develop together with society. In 2022, the entire Group’s R&D expenses increased approximately 20%, but they increased approximately 30% when comparing only the Food & Beverages and Health Science domains, compared to 2016 when we were focused on the domestic alcoholic and non-alcoholic beverage businesses. Going forward, we will continue to invest R&D resources in the areas of health science and the environment, two areas in which consumers and society have high expectations for scientific evidence. A naturally occurring substance in the body that helps maintain cell membranes in brain and nerve cells. It is used around the world to treat brain diseases and in health foods that support cognitive function Oligosaccharides found in human breast milk. There are over 200 varieties in human breast milk, and studies have shown they contribute to immunity, brain function, and more An R&D system that improves commercialization success In the Food & Beverages and Health Science domains, basic research and applied research for commercialization are being performed at the Kirin Holdings’ Kirin Central Research Institute, Institute for Future Beverages, and Institute for Packaging Innovation. On the other hand, at each operating company’s or division’s research institute, R&D directly connected to business, such as product development that makes use of the technologies born there, are being performed. Additionally, in the Pharmaceuticals domain, most R&D activities are handled by Kyowa Kirin, who is promoting collaborative efforts with Kirin Holding’s Kirin Central Research Institute in an effort to provide value that is not limited to pharmaceuticals. Regarding the Health Science domain, the Institute of Health Sciences was established in April 2023. Part of the short-term and medium- to long-term developments that were previously being handled by the Kirin Central Research Institute were combined with the R&D functions of the Health Science Business Department and are now being handled directly by the Health Science Business Division. By newly establishing the institute responsible for the health materials in the process of business development (LC-Plasma, HMOs, Citicoline, etc.), we can perform functional development that is more closely linked to marketing activities, create functional products with more speed, and enhance our ability to implement business strategies. Additionally, the Kirin Central Research Institute will focus on basic research for creating new value for the future. It is precisely because the development of functional materials takes time from the start of R&D to product launch that the Institute of Health Sciences, which coordinates marketing and R&D strategies and works closely with the business, and the forward-looking Kirin Central Research Institute will work together to continuously create new functional products and services. IP strategy compatible with the characteristics of the Group business In coordination with our Group’s R&D activities, we promote IP activities by Kirin Holdings’ Intellectual Property Strategy Department in the Food & Beverages domain and by Kirin Holdings’ and FANCL Corporation’s IP Departments in the Health Science domain, with business and R&D, respectively. IP activities in the Pharmaceuticals domain are promoted by Kyowa Kirin’s IP Department. Each domain requires IP activities that match its business characteristics and markets. In the Food & Beverages domain, we are working to maintain a level of freedom in business and development through multifaceted production of our various IP rights, such as production technology, product composition, and packaging design. In the Health Science domain, we are working to realize market expansion and business growth through acquiring and utilizing intellectual property consisting of primarily patent rights related to health functions of materials, production technology, and product composition. The growth of the LC-Plasma business, which is currently the most developed business of the Health Science domain, could be said to be due to the coordination of the business, R&D, and IP departments. Human capital supporting the competitive advantage Our Group achieves sustainable growth by implementing a competitive strategy that combines our R&D capabilities and our ability to commercialize the value we have created with our IP strategy. The reason for our competitive advantage is our human capital. Particularly when it comes to foundation research, it is important to have highly specialized human capital, and there are 224 employees with doctorates in our Group (as of 2022). In the IP departments, we are improving the Group’s IP literacy by promoting the hiring and training of human capital who are specialists in IP while also enhancing company education and a training system to acquire the skills required for promoting IP activities. An example of this is assigning human capital who gained experiences in production and quality assurance at Kyowa Hakko Bio to the Kirin Central Research Institute or other locations. By periodically rotating our people between operating companies and divisions and involving those who understand the business in R&D aimed at commercialization in the research institutes and IP departments, we are creating a system in which it is easier to achieve commercialization in the various domains, ranging from Food & Beverages to Pharmaceuticals. Going forward, we will continue contributing to the growth of the Group by training and hiring with a focus on expertise and assigning human capital who understand the business. Examples of our Initiatives: The strategic process of filing for and obtaining patents related to LC-Plasma Kirin Holdings’ research on lactic acid bacteria started as foundation research in the 2000’s. In 2011, we presented findings on the effects of LC-Plasma on plasmacytoid dendritic cells (pDC) at a meeting of the Japanese Society for Virology and filed for a basic patent.*3 Product development began in 2012, but there have so far been three turning points related to IP utilization in the product life cycle of the LC-Plasma business. Patents related to technologies, etc. that must be used to implement a particular product or service 1) Primary phase: Obtaining use patents related to food and beverage uses in conjunction with activities to obtain functional claims The labeling System for Foods with Functional Claims began in 2015, and inventions of use in food and beverages*4 were approved the following year. We took this change in the environment as an opportunity and took on the challenge of obtaining immune function claims, which required high expertise that includes a deep understanding of research content, familiarity with laws and regulations, and an understanding of trends. As a result of the coordination of the business, quality assurance, R&D, and IP departments, we were able to realize the immune function claims of LC-Plasma, which would become the key to our business’ expansion, and we successfully obtained a basic patent. Due to the revision of the Examination Guidelines for Patent and Utility Model in April 2016, inventions of use that were previously limited to pharmaceuticals and cosmetics, were now approved for food and beverages. 2) Growth phase 1: Obtaining the necessary IP from analysis In 2020, during a time when people’s interest in immune function began to grow, the notification of functional claims for immunity was accepted by the Consumer Affairs Agency and we expanded our LC-Plasma series product lineup. The IP departments, based on our future business plan, shared the IP we should acquire with business and R&D departments. We worked to secure a stable business foundation by collaboratively filing and obtaining the necessary IP in Japan and overseas. 3) Growth phase 2: Promoting an open strategy and expanding the business overseas Our partner companies in Japan and overseas have been selling LC-Plasma series products, which claim immune care functions, since 2021. Prior to this initiative, we strategically and quickly built a cross-departmental system and proceeded with a license based on the basic patents. When selling the LC-Plasma bacterial cell overseas, we actively publish research papers on LC-Plasma, protect it with patent rights, and promote its functional aspects in order to differentiate it from similar materials sold by other companies. Furthermore, the business, legal, and IP departments work together to build a cooperative system in concluding contracts with partner companies. As a result, we contribute to not only the promotion of our business but also to market expansion. The number of products for sale or set to go on sale as of the end of March 2023. At the same point in time, we had also licensed basic patents for 44 products to 8 companies. Patent analysis of immune-related lactic acid bacteria patents Using the patent analysis tool PatentSight®, we analyzed the patents related to immune-related lactic acid bacteria technology of other Japanese food and beverage companies. The graph on the left reveals that for 10 years since 2012 Kirin’s Patent Asset Index (PAI) and Technology Relevance (TR) have risen every year and closer to the scale of other companies that are ahead of us in the development of lactic acid bacteria. Although we entered the lactic acid bacteria field as a latecomer, we believe that the results reflect our accumulation of research activities and steady acquisition and utilization of IP, The graph on the right reveals that our LC-Plasma basic patent’s TR is rising sustainably, and that our basic patent currently attracts higher technical attention than the lactic acid bacteria patents of competing products by comparing our TR to those of other companies. Based on these results, if we continue to invest in IP in preparation for future business crossroads and expand the business model that utilizes IP, the relative value of our patents, one of our intangible assets, will improve and we will be able to reach the position we are aiming for. Finally, it would be contributed to the realization of a growth scenario of our LC-Plasma business. Prepared for our company using LexisNexis Japan’s patent analysis tool, LexisNexis® PatentSight® TR (Technology Relevance) is an indicator of the technological value of a patent calculated based on the number of citations received and indicates the level of technical attention from the patent-holding company, competitors, and academic societies. PAI (Patent Asset Index) is the sum of the number of each patent’s Technology Relevance and Market Coverage and shows the overall strength of the patent portfolio. In this way, in the LC-Plasma business, we believe the acquisition of IP based on the basic patents of inventions of use and the handling of the labeling system for foods with functional claims meshed well, allowing us to build a growth model for the Health Science domain. In the 20 years since we started research and development, the business, R&D, and IP departments have come together and accumulated IP rights, like patents and trademarks, as well as the organizational capabilities to promote the business. Going forward, we will promptly seize opportunities of external environmental changes, utilize our Group locations in Japan and overseas, and make use of our experiences expanding the business to create new business in the Health Science domain under a business model that leverages our IP. First time in 59 years as a food company, External awards received in recognition of the success of LC-Plasma At the FY2023 National Commendation for Invention (hosted by the Japan Institute of Invention and Innovation), Kirin Holdings Company, Limited and Koiwai Dairy Products Co., Ltd. received the Imperial Invention Prize for our invention of food compositions for immunostimulation containing lactic acid bacteria (Japanese patent number 6598824), which was awarded to our employees, the inventors for their efforts in the discovery and commercialization of LC-Plasma. This is the first time this prize has been given to a health food ingredient and the first time in 59 years to a food company. Our representatives of enterprises also received the Distinguished Service Prize for Employment of Invention. The National Commendation for Invention is hosted by the Japan Institute of Invention and Innovation (JIII) and is held annually to honor inventions that have made significant achievements and those that are expected to make significant contributions in the future. In particular, the Imperial Invention Prize is given to inventions that have made significant contributions to the promotion of science and technology and the development of Japan's industrial economy. This Prize is also the symbolic award of the National Commendation for Invention, which is given with a gift from the Imperial Household, and is presented to the person whose invention is recognized as the most outstanding. Additionally, at the 11th Technology Management & Innovation Awards (hosted by the Japan Techno-Economics Society), which recognize outstanding innovations that will change the world, we received the Minister of Education, Culture, Sports, Science and Technology Award for our discovery, research, and commercialization of LC-Plasma. For information on previous prize winners, please visit the of the Japan Institute of Invention and Innovation (JIII) website (Japanese only). http://www.koueki.jiii.or.jp/hyosho/zenkoku/zenkoku_jusho_pastichiran.html Integrated Report Share Please do not forward or share information about alcoholic beverages with anyone under the legal drinking age. Purpose Message from Top Management CSV Purpose Long-term Management Vision and Medium-Term Business Plan KIRIN’s HISTORY Corporate Governance Risk Management Value Creation Model Impact CSV management Management Issues for Sustainable Growth (Group Materiality Matrix) A Responsible Alcohol Producer Health and Well-Being Community Engagement The Environment Other material agenda and governance Domains Product brand Food & Beverages Health Science Pharmaceuticals Drivers Core technology that assures value creation Consumer centric marketing ICT accelerating value creation Diversity and inclusion, culture for innovation Financial Strategy Profile Investors Careers Newsroom Contact Us Terms and Conditions Privacy Policy Site Map You must be of legal drinking age to consume alcohol. Don't drink and drive. Enjoy responsibly. It is advisable not to drink alcohol during pregnancy and breastfeeding. Do not litter! Let's recycle after drinking! © 2007-2024 Kirin Holdings Company, Limited. TOP