Message from the President

© L/KMP

Sustainable Procurement for Resilience in the Face of Emergency

The business environment in which LOTTE operates has seen a rise in uncertainty in recent years. Notably, the recent tensions surrounding the Strait of Hormuz have intensified concerns over naphtha supply and rising prices, both of which have far-reaching implications for supply chains across several industries. LOTTE is no exception in this regard. In such turbulent times, we are able to find stability through our sustainable procurement initiatives, which have come to serve a dual purpose. On one hand, these measures address risks related to human rights and the environment. On the other, they ensure resilience in the face of emergency.
Chocolate is a core business of LOTTE, and cocoa beans are an essential component of chocolate. This crucial ingredient has been subject to a historic rise in market prices following poor harvests in West Africa, among other factors. However, reports from local sources indicate that the impact of poor harvests was somewhat limited in the regions where we have offered continued support for several years. Some of this support included efforts to eliminate child labor, stem deforestation, and deliver agricultural guidance to improve productivity. This is proof positive that our long-standing sustainability-related activities have been effective in ensuring resilience in times of emergency. Going forward, LOTTE will expand this support to more regions while also diversifying risk by establishing a wider range of procurement sources. Regarding the concerns over naphtha mentioned at the outset, we are currently investigating a shift away from plastic packaging toward more environmentally conscious materials, which I believe will reduce our dependence on fossil fuels and hedge against geopolitical risks.
In this way, our sustainable procurement initiatives are extending beyond cocoa beans to encompass other raw materials. We are also working alongside local communities to advance projects that tackle issues affecting production areas for the glutinous rice used in Yukimi Daifuku, the quince used in Nodoame, the natural chicle used in our chewing gum, and other raw materials. Together, these initiatives form the basis for a strong and robust business foundation that will ensure LOTTE remains steady and stable amid shifting and uncertain external environments. We will remain firmly committed to these efforts and will further accelerate our initiatives in the years ahead.

Exploring the Value of KAMUKOTO for Society

Our corporate slogan, “Everyday Sweet Life,” reflects our enduring commitment to capture the hearts of people across generations as we continue to add sweetness to people’s lives, each and every day. This same spirit is infused in our Purpose, formulated in 2023, “to create a happier future.” The phrase “a happier future” reflects our determination to help realize a sustainable planet and society, and to bring prosperity to the lives of all people.
At LOTTE, we have a distinct approach to achieving this future that involves spreading awareness of proper chewing, or KAMUKOTO^＊ in Japanese, as a way to contribute to physical and mental well-being. Based on research conducted to date, last year we announced estimates indicating the degree to which an oral health program incorporating chewing gum could help reduce future long-term care costs. In this same vein, exploring the value of KAMUKOTO and expanding it throughout society is significant because it could extend healthy life expectancy and help address social issues. On a personal note, my own parents are in their nineties and I care deeply about their health. So, I send them chewing gum on a regular basis out of the hope they will enjoy good oral health for many years to come.
To bring the value of KAMUKOTO into greater society, we launched a cross‑departmental project this year. Through this project, we will consolidate relevant knowledge and evidence and actively communicate the value of KAMUKOTO both inside and outside the Company. In addition to broad support from companies and organizations for spreading the importance of KAMUKOTO, we have established partnerships with more than 20 local governments that are committed to promoting health within their communities. Across LOTTE, we aim to redouble our efforts to contribute to mental and physical well‑being by promoting the adoption of KAMUKOTO.

^＊ KAMUKOTO means “Mastication” or “Chewing” in English, which involves the movement of the muscles around the mouth and tongue used for eating. KAMUKOTO has many benefits for the body, such as increasing cerebral blood flow and activating brain functions.

Fostering an Organizational Culture Where Everyone Can Demonstrate Their Unique Abilities

The greatest driving force for implementing these initiatives and achieving sustainable growth is none other than human capital. I see employee engagement as a key indicator of good management. Therefore, I have pledged to take our employees’ voices seriously, responding to them with sincerity and using them as a bedrock for continued improvement. This year, we saw clear signs of improvement in our employee engagement score, and I myself can feel the positive changes taking place across the Company. The other day, I was pleased to hear from someone outside the Company that “LOTTE employees have a truly strong sense of camaraderie.” To me, this is an affirmation of our steady efforts to build an organizational culture in which everyone can demonstrate their abilities in their own way. These efforts include expanding systems to support a wide range of workstyles, advancing women’s empowerment, encouraging men to take childcare leave, and promoting diversity through respect for the LGBTQ+ community and all other forms of individual diversity.
Moreover, strong connections with society are critical for any company. Last year, I had the opportunity to serve as a food education instructor, standing in a classroom and delivering lessons to elementary school students. Sitting down and interacting with children served as a reminder that our business holds powerful value as a point of connection that can reach across generations. Getting to see our business through a lens beyond everyday operations also enabled me to rediscover both the breadth of its impact on society and the genuine value our products deliver. Taking on the role of a food education instructor alongside daily responsibilities offers an important opportunity for employees to rediscover the significance of their work and the value of our products. I sincerely hope that our employees will take on this challenge.
Going forward, we will continue to engage with society and work together with our stakeholders to pursue sustainable growth and enhance corporate value. I sincerely appreciate your support as we move forward in these endeavors.

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