Kirin Beverage Business Strategy for 2024
Thursday, January 25, 2024

Kirin Beverage Company, Limited

Soft Drink Market in 2023
The soft drink market is expected to settle at 100% of the previous year's level.
Although the market environment remains challenging, the health category is performing
well thanks to the introduction of products by various companies.

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Major impact of soaring raw material and logistics costs

2

High levels of health consciousness continue after the reclassification ofCOVID-19 as a Class 5 infectious disease, leading to health market growth3

Increased raw material and fuel costs due to the impact of international affairs, depreciation of the yen, and other factors.
Customer's tendency to spend more liberally only on the few goods and services they value the most while only spending
the bare minimum on other necessities has progressed with the rise in prices of food, daily necessities, and other items.

Lifestyle has returned to normal, including increased opportunities to go out.
Meanwhile, non-COVID-19 infectious diseases risks continue, including an unseasonal influenza pandemic

Increased demand due to heat wave and lingeringsummer heat
Historic heat wave and severe lingering summer heat have boosted demand, especially with prolonged seasonal
peaks in thirst-quenching beverages.

© Kirin Beverage Company, Limited

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Recap of Activities in 2023
In line with the “Pledge to Consumers” sales of beverages containing LC-Plasma and the core brand“Gogo-no-Kocha" grew.
Steady progress is being made toward realizing the "healthy and good taste (oishii kenko)" concept withthe strengthening of the Health Science domain resulting in high profitability, as well as high value-added,
high unit price products from core brands receiving high acclaim.
Building a strong brand portfolio

Initiatives in theHealth ScienceDomain⚫ The growth of beverages containing LC -Plasma has been driven
by year-round habit formation, including immune care during the summer months, driving the expansionof the immune care market⚫ Accelerated collaboration with FANCL to expand product lineup⚫ Summer ice tea initiatives succeeded in stimulating demand in the black tea category during thepeak beverage season

Base Brand
Initiatives⚫ High value-added, high-unit price products "Nama-cha Rich" and "Gogo-no-Kocha Tea
Selection" series performed well
⚫ Challenges include further expansion of the black tea category and making the green tea
category more attractive

Development andEstablishment ofBusinessInfrastructure© Kirin Beverage Company, Limited⚫ New production line in operation improves production capacity at Shonan Plant⚫ Improvement of production ratio in the Tohoku area, establishment of efficient and stable supply system2

Sales performance in 2023
Sales in 2023: 191.67 million cases, YoY: 95%
4444

Health Science domain share expanded to 13% (10% in 2022)
beverages containing LC-Plasma grew by 136% YoY; Gogo-no-Kocha grew by 102% YoY, and Nama-chaby 99%

Sales Volume in 2023
Health Science area

© Kirin Beverage Company, Limited

By Brand*The results for Kirin Gogo-noKocha Milk Tea Plus, and Kirin
Nama-cha I m m u n e C a r e a r e
included in both Kirin Gogo-noKocha o r Kirin Nama-cha a n dbeverages containing LC-Plasma
Included in Health Science area but
not in the Existing Beverages area.

Sales volume

Year-on-year

2.469 million cases

118%

Market forecast
HealthBeverage
Market+8%Approx.
(FOSHU/Food with Functional Claims)

Beverages with LCPlasma

8.96 million cases

136%

Total soft drinks

191.67 million cases

95%

Soft Drink
MarketApprox. ±0%

Kirin Gogo-no-Kocha

50.46 million cases

102%Black teamarketApprox. ±0%

Kirin Nama-cha

27.77 million cases

99%

Unsweetened
tea market

Approx. -2%

Kirin FIRE

22.00 million cases

101%

Coffee market

Approx. -2%

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Beverage Industry Forecast for 2024
Although the market is expected to shrink in the medium-to long-term, we expect the category to berevitalized through market creation, achieved, for example, through new proposals.
44"Health" is not a temporary fad, but an ongoing concern for the public.

Short-term forecast

Medium-to long-term forecast⚫ Expectations of increased consumption due torising real wages and inbound demand, etc.

⚫ Continued contraction trend in the beverage
market due to declining domestic population⚫ Expanding consumption of high value-added
products and services that readily enhance thequality of daily life

⚫ Ongoing uncertainty about the future, including
climate change risk, geopolitical risk, and rising
prices⚫ Immunity needs for infectious disease controlcontinue⚫ Long-term health needs and growing healthconsciousness⚫ Implement and promote measures to address
the challenges of 2024
© Kirin Beverage Company, Limited4

Medium- to Long-term Policy for Sustainable Business Growth

Implementing "Kirin Beverage's Unique CSV"
to Achieve Sustainable Business Growth
Pledge toConsumers

Health w ith good taste for everyone’s daily life.

Community
OutcomeCommitment(part)

HealthEnvironment

Communities are developing sustainably,
and human and social connections arebeing strengthened

Customers' health and wellbeing is
improved, and their lives are healthier

A recycling-oriented society isdeveloping, and both society andbusiness are becoming moresustainable

Gogo-no-Kocha HAPPINESS Project

Formation of "immune care" habits

Reduction of GHG emissions

Sustainable development of areas where
raw materials are produced (Sri Lanka)

Health without overconsumption

Measures for plastic use⚫ Promotion of the use ofrecycled PET⚫ Reduced use(Reduction of sugar use, etc.)

Mental and physical health through our brands
Brands© Kirin Beverage Company, Limited5

Business Policy for 2024
Business Policy for 2024
Accelerate the transition to a strong business portfolio with healthscience as its strength, and thus seek to achieve sustainable growth
based on the "Promise to Our Customers." Aim to build a robust
brand and improve profitability based on CSV.
Priority Issue 1

Priority Issue 2

Realize the “Health with good taste" concept
Build a robust brandStrengthen our business basein order to support continued growth

1. High profitability through new value propositions
2. Increase category attractiveness through newvalue propositions© Kirin Beverage Company, Limited

1.
2.
3.

Solve production and SCM issues, bolster
competitivenessPromoting CSV through vending machines
Containers and packaging for a recycling-oriented society
6Priority Issue 1: Realize the "Health with good taste" Concept
Build a Robust Brand
1. High profitability through new value proposition - beverages containing LC-Plasma"Immune care" is a daily health habit necessary for "building the foundations of health"Create and expand the market with Kirin's unique approach to both chilled and dry foods
Sales target for 2024: 12.4 million cases of beverages containing LC -Plasma(up 38% from the previous year)

NEWChilledRenewal(1) Promotion of habit
formation (depth)

Chilled products

Population with expectations
toward immune care

Dry products
Create and expand
the immune caremarketPopulation
with broadexpectations
towardhealthNEWNEWPackage

10 million© Kirin Beverage Company, Limited

50 million(2) Creation of drinking experience(area of business)
Source: Kirin research7

Priority Issue 1: Realize the "Health with good taste" Concept
Build a Robust Brand
1. High profitability through new value propositions
Create a market with high value-added and high-unit price products to meet the needs ofpeople who want to improve their quality of life⚫

To make the "Gogo-no-Kocha Tea Selection" series available year-round to make the black tea category
more appealing and expand sales.

⚫

Starting Sales at Vending machines for "Nama-cha Rich" (planned for the first half of 2024)⚫

Introduced a new PET bottle series from the "FIRE" brand that pursues the delicious taste of coffee.

NEWNEW

Tea selectionseriesNama-cha Rich

New FIRE
PET bottles

Transition toyear-round

Sales atvendingmachines

Series launch© Kirin Beverage Company, Limited8Priority Issue 1: Realize the "Health with good taste" Concept
Build a Robust Brand
2. Increase category attractiveness through new value propositions⚫

The No. 1 brand in the category, "Gogo-no-Kocha," proposes a year-round drinking experience with the "premiumexperience" and "rewarding taste" that black tea has to offer.

⚫

We will further expand the "Gogo-no-Kocha Oishii Muto (sugar-free)" series, to achieve growth for the 13th consecutiveyear⚫

We will revamp the "Nama-cha" brand as a new PET green tea and hojicha that is distinctly different from existing green tea
products, and make the unsweetened tea category more appealing, breaking away from commoditization

NEWNEW

Expand theblack tea
category
through quality
experiences© Kirin Beverage Company, Limited

13 th consecutive yearof growth for theOishii Muto (sugarfree) series

Revamp the imageof PET green tea
and hojicha

9Priority Issue 2: Strengthen Our Business Base in Order to Support
Continued Growth12⚫

Consideration of wage revision⚫

Acceleration of response to the issues of 2024
└Started test operation of ICT-based delivery leveling system (January)

Solve production/SCM issues,
bolstercompetitivenessPromoting CSV
throughvending machines└Automated picking system at Ebina Distribution Center begins operation(scheduled for December)⚫

Kirin Beverage Shiga Plant switched to purchasing 100% renewable energy in January⚫

Solar panels installed at the Shonan Plant begin operation (February).

⚫

Introduce "green power vending machines" that reduce GHG emissions
to effectively zeroContribute to local communities through expansion ofMIMAMORI vending machines
Expand "KIRIN naturals"* wellness stands and strengthen proposals
for health science products*Corporate services to support health management⚫

⚫

3Containers andpackaging fora recycling-orientedsociety© Kirin Beverage Company, LimitedNEW⚫
⚫

⚫

Expand use of recycled PET
Promote bottle-to-bottle (horizontal recycling) in cooperation withlocal governments and companies
Reduce plastic usage (weight reduction, etc.)NEWgreen power
vending machines10

Sales Plan for 2024
Aim for total revenue of more than +5% and an increase of more than +20% in the Health Science domain
in 2024 (compared to 2023*1);accelerate transformation to high profitability

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Sales target for beverages containing LC-Plasma in 2024: 12.4 million cases, +38% YoY

Sales volume

Year-onyear

Total soft drinks

193.2 million cases

101%

Health science area*2

28.2 million cases

114%

Beverages with LCPlasma

12.4 million cases

138%

Market forecast
Soft Drink
Market
HealthBeverage
MarketAbout -1%

+8%
approx.

(FOSHU, Food with Functional Claims)

By BrandKirin Gogo-noKocha

50.8 million cases

101%Black teamarketAbout +1%

Kirin Nama-cha

27.5 million cases

99%

Unsweetened
tea market

About -2%

Kirin FIRE

21 million cases

95%

Coffee market

About -1%

(Sales volumes are on a single-company basis)© Kirin Beverage Company, Limited*1: Consolidated, IFRS basis*2: LC-Plasma-containing beverages, Kirin Mets Plus, Kirin Mets Cola, FANCL collaboration products, Tropicana Essentials, Tropicana W, beta-lactolin-containing beverages

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