Oisix ra daichi Inc.
Q2 Financial Results Briefing for the Fiscal Year Ending March 2020
November 14, 2019

Event Summary[Company Name]

Oisix ra daichi Inc.

[Event Type]Earnings Announcement[Event Name]

Q2 Financial Results Briefing for the Fiscal Year Ending March 2020

[Fiscal Period]

FY2019 Q2[Date]

November 14, 2019

[Number of Pages]

49[Time]

16:05 – 17:00(Total: 55 minutes, Presentation: 36 minutes, Q&A: 19 minutes)[Venue]TKP Tokyo Station Central Conference Center 10A Hall
Shinmakicho Building, 10F
1-8-16 Yaesu
Chuo-ku, Tokyo 103-0028[Venue Size]

199.44 m2[Participants]

95[Number of Speakers]

1
Kohey Takashima

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Presentation
Moderator: I would like to thank you for taking time out of your busy schedule to come here today. Now, we
will start the briefing for the interim financial results of Oisix ra daichi Inc. for the fiscal year ending March
2020.
Our president, Kohei Takashima, will explain the interim settlement during the March 2020 period, though,as soon as possible. President Takashima, thank you for your support.
Takashima: Hello. Thanks for taking time out of your tight schedule to come here today. The elevator has
stopped, so we have delayed the time. Some of you may have come to the 10th floor by using the stairs, but
I would like to try hard to have a briefing that is worth using the stairs to reach the 10th floor. Particularly, tothose who have climbed up the stairs, please enjoy the briefing over our drink Vegeel. This is good when you
are thirsty, and additionally, it contains two days’ worth of vegetables. However, the human body can absorb
only a day’s worth, so it does not mean that if you drink it, you don't have to eat any vegetables tomorrow.
We were just eager to put two days’ worth of vegetables in. You can at least get your daily amount ofvegetables today via our drink, so please listen while drinking.

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I would like to explain for 20 to 30 minutes about the interim financial results for the first half of the fiscal
year, and then we will move onto the question and answer session.
As for the overall structure, I would like to talk about the numerical parts of the business results, the specificdetails of each segment, and what we are thinking about in future topics, and then talk about some topics.
Firstly, in terms of the interim results, including 1Q and 2Q, sales, profits, and overall results, were favorable
overall. Although “favorable” means “borderline”, it has been progressing according to our plan. Sales arealso growing. Profits are also progressing as planned. As I will explain later, there is a slight increase in costs
due to Oisix, but most of them are as planned.

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Before starting my explanation, I believe that it is necessary to explain this to the public every time this fiscal
year, but there are a few specific factors that I will explain in detail. First of all, there are two special factors
behind the financial results for the previous fiscal year, with one being management integration with Radish
Boya and the other having last year's sales be recorded for 13 months. For Radish Boya, about 1.5 billion yen
was recorded for one month, but it's a lot more in last year.
Another special factor was tax effects, partly due to Radish Boya recording losses for a long time, and net
income for the fiscal year ended March 31, 2019 being extremely large for a time. Net income was also larger
than operating income for the fiscal year ended March 31, 2019 due to the tax effects. As it has returned tonormal from the current fiscal year, looking only at the superficial figures of the year-on-year rate does notseem to be so good, but it does not mean that particularly negative things have occurred this year.
In addition, I would like to mention what has been occurring since this year. In terms of M&A or consolidation
through equity investments, we invested 20% in Dean & Deluca, which has been included in the scope of
consolidation since this fiscal year. This has already been consolidated from the previous quarter, and theamortization of goodwill has begun.
On the other hand, we made an acquisition in spring in May this year of Purple Carrot, which is a US company.
But, as we will explain today, neither sales nor profit figures are consolidated, so we will consolidate themfrom the second half of the year. Specifically speaking, since it is in the United States, its financial results
briefing is in December, so in the second half of the current fiscal year, we will record its results from July to
December. Before the acquisition, the company had sales of about 4 billion yen and profits of negative 400
million yen, approximately. However, since the July-to-December quarter figures for the current fiscal year
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4will be recorded from the second half of our current fiscal year, in terms of the current fiscal year, only half ofthe figures will be recorded.

This is the explanation of the special factors behind this year's presentation. As a result, both sales and profit
are in line with our plan. However, as you can see, there are some areas that seem to be in line with themarginal plan, and although we were aiming for a slightly higher level of performance, we feel that it is exactly
in line with the plan.

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If I partly correct the conditions I have just mentioned and look at them under the same conditions, sales arealso growing slightly. On the other hand, EBITDA has slightly declined operating income, and the breakdown
is shown on the next page. One of the factors behind this is that, in the spring, the rate of growth in Oisix has
increased slightly from the previous year, but in order to achieve this growth, we launched large-scale
advertising campaigns, including TV commercials, in the spring.

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6Second, the ratio of meal kits, called Kit Oisix, to sales has risen more than expected, and the profitability itself
is in a good condition. However, in the first half of the fiscal year, we have exceeded the production capacityof meal kits and tried to make it through the excessive demand. It was temporarily quite expensive. Then wewere incurring upfront costs for the new Prime Pass subscription service. I think the profit margin has fallenslightly due to these factors, but the planned content, other than the one-time costs associated with thisexpansion have not been so well planned, is in line with the plan.

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The same is true of net income. In addition, this fiscal year, Dean & Deluca, along with its equity stake, theconsolidation of equity-method affiliates, and the subsequent amortization of goodwill, have occurred.

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In terms of segments, Oisix has grown 120%, and in terms of growth rates, we are in touch with our targets.
In order to achieve this, we are spending budget to some extent, but I think it is good to say that it is goingsmoothly.
DAICHI WO MAMORUKAI has gradually calmed down the decline in sales, and in this third quarter, it has cometo a halt, and in order to do that, we are working to raise the level of our base service considerably. As a result,
there are fixed operating costs, such as rent for distribution centers, but the ratio of these costs that falls
under what we call marginal profits is temporarily rising.
With regard to Radish Boya, we are still working to make it leaner, and I believe it will continue, probably until
the end of this fiscal year.

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9Other B to B businesses are growing, and, as a whole, the sales and operating income I mentioned earlier are
32.55 billion yen and 900 million yen, respectively.

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I will discuss in detail, but I would like to talk about three main points. The first is the domestic delivery
business for the three major brands. And then, I would like to explain other delivery businesses and otherbusinesses.

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Looking at each of the brands, the ARPU of Oisix declines a little, but the number of members is 121.8%,
indicating that regular members are growing continuously. In particular, the year-on-year growth of Kit Oisix,
the meal kits, is around 150%, and the majority of the overall growth is associated with the growth of this Kit
Oisix. I think this is still promising.

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Indeed, there has been a great increase in exposure related to Kit Oisix, and this slide shows the number oftweets. It is considerably high compared with last year and is continuously growing. In the first half of the year,
there were many opportunities for media exposure where the meal kit was introduced to the market, and I
feel that it has become a commodity known to many people.

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We have quietly started Chanto Oisix services that differ from other meal kit services. The meal kit provides
cut or prepared vegetables, but Chanto Oisix is a service for people who do not like to cut vegetables. It's aservice that provides recipes and ingredients, and when they make dishes based on a weekly menu, they canfinish off all of the ingredients. We're quietly doing this service. The company has gained support from people
who don't want to be concerned about the menu, but are resistant to cutting vegetables, and around 10,000
people have supported this service. It is now in a phase where we can further increase the number of suchpeople.

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Another topic is the US meal kit business, which we acquired in the spring of this year, that offers food madesolely from vegetable-based ingredients for vegans, and the menu has also been launched in Japan. This has
just started about a week ago. A good thing about its service is that 80% of its users are non-vegan, althoughmany people often feel that it is impossible for them to not eat meat.
In other words, rather than targeting people who don’t believe in consuming animal products or who havesuch a style of eating, it is a part-time vegan service for those who generally eat meat and fish, but don’t eat
animal products some days. We sometimes use the word “vegan” in Japan, but the term “vegetarian” nolonger references an eating lifestyle, but rather refers to a certain identity or moniker for people who live likevegetarians. We don’t want “vegan” to end up like that. Rather than serving people who have vegan lifestyles,
we have launched a service based on the concept that people who, say, eat too much meat yesterday or who
will eat tempura tomorrow can have vegetable-based meals that satisfy them once or twice a week. So far,so good.

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As I mentioned earlier, for the first half of the fiscal year, Oisix has been constantly caught up due to Kit Oisix
capacity overruns. However, we built a new plant in the autumn, so it will settle down the situation to a certain
level and ensure production in the future.

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Next, I would like to talk about DAICHI WO MAMORUKAI. The number of members has gradually decreased
since we almost stopped promotions. However, the number of people has stopped declining in 3Q and isgradually increasing slightly. As for the ARPU, since it has already risen considerably and there are only very
good customers left, sales per employee are increasing.

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How we raised the base service level in the first half of the fiscal year is roughly described. They are basic
points for mail-order sales of foods, but there were many basic points that we had not conducted, so we tried
to do them little by little to make up for cancellations by frustrated customers.
If the number of cancellations and customers who leave us decreases, we can focus on promotions little bylittle, so there is a slight increase in the number of customers entering 3Q. However, we have not created a
new service, so we are currently developing a new, health-oriented service for our users in their 60s in order
to not to stay with a slight increase. So far, it is also going well, but in the second half of this fiscal year, I would
like to make this a reality and accelerate our promotions.

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19Regarding Radish Boya, the number of customers has considerably decreased, and the trend has not stopped.
Although it has largely been improved, 40% of the orders were originally in the red. At the time we merged,
40% of the orders were in the red, so we knew we had to reduce it, so we have been continually doing this.

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I believe that the problem has been largely improved since the first half of this fiscal year, and it is now 6%,
so we think this issue is almost resolved. Other than that, we have not yet completed what I said that wecompleted for DAICHI WO MAMORUKAI. Therefore, if we continue to raise the base level in the second halfof the fiscal year under review, we will not be able to increase new customers unless we lower the ratio ofpeople who get disappointed when they tried the service. We have almost completed the process of raising
the level of our base service and eliminating unprofitable orders, but by raising the level of our base service,
we will be able to reduce the number of cancellations and start promotions, like DAICHI WO MAMORUKAI
today. In terms of image, it is about half a year to a year behind DAICHI Wo MAMORUKAI, and there was a
year’s difference in terms of the integration, so it explains its phase.

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I would like to summarize the three-brand integration synergy that investors often ask about. Honestly, I feelthat it's been a long time since we became one company, and that the integration synergy is not new to us
anymore. As management, I feel that it's a very old thing, but after looking back a little into the past, we havedivided what kind of things we have done so far onto either the marketing side or the operations side, andthen integrate them a little. The range is in hundreds of millions of yen and the biggest monetary impact isfrom promotion efficiency, and this has been the case. In the first half of the fiscal year, something like linked
marketing has already been started. In addition, we have begun a campaign that simultaneously raises threebrands to address social issues and concerns about eels from the standpoint of sustainability on the Day of
the Ox.
Looking ahead, the company will make a full-fledged effort to raise the level of the mail-order service, as I
mentioned earlier. Since DAICHI WO MAMORUKAI and Radish Boya will enter the phase of increasing sales,
we will work on it. On the cost side, there are still quite a few heavy things left, and the overall optimizationof the distribution centers takes more than three years or five years for some. Over time, we will work to
optimize the current eight locations. This is the overall sense of the home delivery business.

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Looking at other topics, in the domestic business, the initiative with DOCOMO started about two months ago.
Although the launch was quite difficult compared to what we did in the past, it was done successfully, and weare showing progress as planned so far. DOCOMO’s real traffic is so great that we are now building afoundation that will be able to handle it.
Meanwhile, ISETAN DOOR, which has been in operation for a little over a year, has already gained 14,000
regular members, and is performing very well at an unprecedented pace. Performance by collaboration withISETAN DOOR exceeds our plans.

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Next, I will speak about TOKUSHIMARU. Delivery services for homebound elderly people is also growing
steadily, and the number of vehicles is increasing. When we acquired it, I think there were around 100 cars,
but now there are around 440 cars. I think the transaction value will surpass 10 billion yen in this fiscal year
and nearly 5 billion yen in the first half of the fiscal year. As the number of vehicles is increasing, we are aimingfor 1,000 vehicles for the time being, and we are steadily expanding toward that goal. I believe that it will not
be long before we can contribute to consolidated profits, but I believe that we will expand the scale of ourbusiness while maintaining the break-even point, rather than a net loss.
However, considering the number of homebound people throughout Japan, it wouldn’t be strange even if
there were 4,000 to 5,000 cars in this business, so reaching 1,000 cars is not the goal, and we are already the
number one for sure in this field. After we reach 1,000 cars on the road, we intend to build a solid social
infrastructure for this business.

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24Other than this, overseas operations are being conducted not only in Asia, where we have already started ourservice, but also in other parts of Asia. In China, the Chief Customer Experience Officer, the CXO in charge ofJapan, has moved to Shanghai this month, and is starting to work there steadily. In the United States, we will
introduce our operations excellence and know-how through Purple Carrot, starting with areas that are likely
to have a significant impact. In the future, I believe that the US will take the initiative to make promotions
more efficient, as we have always been in Japan, such as reforming the services or optimization.

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For the store business, we are selling in around 150 supermarkets. There is also a business, which was owned
by Radish Boya, for food delivery to kindergartens. At the time of the merger, there was a considerable loss,
but in the first half or the second quarter, we were finally able to turn a profit. In terms of brands, customers
in kindergartens and nursery schools have a considerable affinity with Oisix, so we have entered thisexpansion phase and are now able to generate marketing synergies.

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In terms of affiliated companies, I am pleased to say that we have invested in Dean & Deluca and have started
a variety of collaborations, and there are some other things besides meal kits and “osechi” seasonal meal setsthat we have been working on in the past. We made the announcement at the Cambria Kyuden about twomonths ago, and today, Dean & Deluca will be on that show. It was our fault that their website stopped andit seems to have been stopped for a little while, but we are also cooperating on this website.

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27Here is our introduction of an investee company. We have invested in a company called Nihon Agri and areconsolidated. It’s a company that exports Japanese agricultural products. It has been growing quite well, andit has just been three years since they started up, but as of last year, it has become the number one exporterof apples for Thailand. This year, it is 2.5 times more. Looking at the scale, it will export fruits and vegetablesin the range from 1.5 billion yen to 2 billion yen, and I think that it is growing in good condition as a company
that specializes in the export business.

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Regarding future business development, I would like to talk separately about growth and earnings. First of all,regarding growth, this is similar to the materials that we have shown many times, but the strongest part isour founder's business. The domestic home delivery service is the field in which we are strong and it makes
up most of our business. This is described in the top and the right, but also for the food business, which is notdomestic home delivery, we are expanding this business by investing in kindergartens and Dean & Deluca. At
the same time, we have begun to horizontally develop our know-how in overseas subscriptions, including
acquiring Purple Carrot.
Furthermore, since there are a variety of businesses, it is easy to support startup companies, so we havestarted supporting startups by creating a Future Food Fund.

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In this context, regarding how we view the delivery field, which is our original business, we thought that thephases differ for each brand. Some brands are in a start-up or rebuilding phase, while others are in a phase
where sales are ready but new services need to be created in order to accelerate promotions.
In Oisix, Chanto Oisix, as well as DAICHI WO MAMORUKAI and Mainichi Vegetable Set, are currently indevelopment. There are others that can be accelerated, such as Kit Oisix, TOKUSHIMARU, et cetera. For these,
we will conduct good promotions and expand our business. Therefore, we decide which service brands are inwhich phase, and then clarify what needs to be done according to that phase.

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Although I’m being a little redundant, we are moving into the black related to the kindergartens, as I
mentioned earlier, and are accelerating the business. We do not simply expand sales, but can also create
marketing synergies that support children and mothers both at home and in kindergartens, since many ofOisix’s customers originally are mothers who have kindergarten-aged children.

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31Additionally, regarding the Future Food Fund that we announced the other day, we have also created a cornerthat sells innovative foods in Oisix. We are selling a variety of foods there. Something like cricket snacks, which
I thought would not sell, sold out quickly. I think Oisix’s customers are very challenging, but I would like tocreate corners to sell a variety of new foods as a gateway to success for startups.

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As one of the topics today, it has been decided that MOS BURGER will join in this Future Food Fund. We would
like MOS BURGER to use this opportunity as an exit, not only to get money, but also to have the food fromnew startup foods in stores. At the moment, we are also considering a collaboration with MOS BURGER. That's
the growth side.

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Next, by strengthening profitability, we have bustled about the merger over the past few years. However, asa result, we realize that we have become a mail-order food business of about 70 billion yen, and it has become
easier to see the impact of activities to increase profitability compared to when each of the brands existed
separately. As the merger has settled down, we will work to raise profitability.
I think about four major points. Regarding costs, this is what we call horizontal logistics, from production areas
to distribution centers. It is said that this is about 10% of the cost of sales: activities to improve this ratio,
activities to improve the cost by proceeding steadily (SPA), activities to improve cost efficiency by large scale
investment in the centers, and activities to lower the operating cost ratio by raising the unit price. These four
points will be considered. I would like to raise the marginal profit ratio by around three to five points by doingeach of these.

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To explain a little bit at a time, we have been experimenting with Yamato to improve the efficiency of ourhorizontal procurement logistics, and we have made considerable progress so far. The experiment has been
repeated, and the experiment has been doing well, but there are some minor adjustments to make theinterface for farmers a little easier to understand. By doing this, if we introduce it to about 1,500 producers,
the logistics costs that they pay when they put it in our center will be cheaper, and as a result, we expect thatcosts will be lower.

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Second, for SPA, more than half of the products each brand sells are its own original products. We believethat raising this rate steadily is extremely effective in terms of both marketing and cost reduction, so we willraise this ratio to improve profitability.

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36Third, Prologis gave a presentation the other day, and for us we will launch the largest center in Ebina. We
will spend about 3 billion yen on this project, and it is to be completed in the autumn of 2021. We will be able
to improve the efficiency of the center cost by introducing some automatic systems. Including thisimprovement of the efficiency of the center cost, we are now slightly over capacity. Even Oisix brands are
suffering from a deterioration in efficiency compared to the past, and we are also using warehouses locatedhere and there, so we are planning to eliminate this and achieving both large-scale and efficiency
improvements.

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Other than that, there is still plenty of room for unit prices to rise, so we have not yet decided what to doabout them, but we are thinking of increasing unit prices and raising profit margins by creating new categories.
That's the profit side.

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Finally, I would like to mention a few individual topics. First of all, this is not very good news, but the impact
of Typhoon 19 temporarily suspended Oisix functions. As a result, we suffered considerable damage and it
had a significant impact on both profits and sales. I feel that the nature of the disaster is slightly different fromthat of the past.
Specifically, what we had to do in the past was to keep a close watch on the impact of the typhoon; however,these days, public transportation does keep running as long as it did in the past. Instead, it stops systematically,
like when the JR or Keio train lines stop. Such schedules are often decided at the last minute, and our responseto the decision was delayed. We will fundamentally review the BCP approach.
We would like to recover our business results without reviewing the full-year forecast. However, even though
we had damage, there are many people in the production areas that have suffered even greater damage. Thisis a relatively good opportunity for us, so we have started to provide relief supplies and then offer support
sales immediately.

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The second topic is the Tokyo Harvest, which is an event to celebrate harvest. It was held at Roppongi Hills
this year, and at Toranomon Hills last year. However, I learned that it was affected by the Enthronement
Ceremony. We could not use the street in front of Toranomon Hills. When we moved the location to
Komazawa Olympic Park, there were more people than ever before, and the event was extremely flourishing.

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Last month, the food loss bill became effective. In the future, we will be talking about offshore plastics andother topics. Since we have been relatively involved in these activities, we ensure communication in regards
to them. Since meal kits still includes a lot of plastics, we will also work to transform these areas into plantbased ones.

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As for the last topic, I am engaged in the B to C business in China, but in the process of doing so, I have seensome B to B opportunities. This is something that has not been possible before, but basically speaking,Japanese foods, such as fruits and vegetables, are hardly available except for rice, and rice is still difficult toget. However, rice is steadily starting to show progress. We were not allowed to bring fruits to someexhibitions in the past, but the situation has been changed, and people ask us to bring fruits for exhibitions.
Next year, I think that there is a possibility that the situation about this will largely change upon a visit by Mr.
Xi Jinping, so I have started preparations for the Japanese vegetable export business for China as well.
That’s the explanation from me. Thanks.

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43Question & Answer

Moderator: Thank you, President Takashima. We would like to conclude the briefing for the interim financial
results for the fiscal year ending March 2020.
We will move on to the Q&A session for the explanations that have been given. If you have any questions,please raise your hand.
Participant: Thanks for your explanation. Sorry to ask a basic question, but I would like to know something
about Oisix that has not been shared yet today. Did Oisix initially start as a business that delivers variousorganic vegetables or the like? I'm sorry for such a fundamental question.
Takashima: I am the founder of Oisix. In 2000, we started out with 20 vegetables, but we started by sellingorganic and natural vegetables B to C via the Internet. DAICHI WO MAMORUKAI and Radish Boya started 44
years ago and 32 years ago, respectively, using catalogues to receive orders and to deliver organic products
to consumers. First there was Oisix, and then we integrated with DAICHI WO MAMORUKAI the year before
last, and then with Radish Boya last year and we have become one company.
Participant: For DAICHI WO MAMORUKAI, it was quite a while ago, but did Mr. Toshio Fujimoto establish it?
I don’t remember it exactly, but I think he entered what we call the organic vegetable delivery business in the
beginning, but is my understanding correct?
Takashima: Yes. I heard that Fujita, currently our Chairman, was the President, and Mr. Fujimoto, who wasjust referred to now, was the Chairman when it was founded.
Participant: For example, this is mainly via the Internet or home delivery, but there are other channels, forexample, the number of drugstores that handle food or are interested in organic food is increasing, but doyou have collaboration with them in mind?
Takashima: It may have been difficult to understand my explanation, but as I have shown here, for domestic
delivery business, there are Oisix, Radish Boya, and DAICHI WO MAMORUKAI. In addition to this, what we call
Shop in Shop is sales at supermarkets, and then there’s wholesale to kindergartens, and also manned stores,
where we are selling meal kits at physical stores on a trial basis. So, we are conducting a variety of trials aiming
at them.
Participant: Thanks.
Moderator: Thanks. Then, if you have any other questions, please raise your hand.
Matsushita: I’m Matsushita from Health Business Magazine. Thanks for your explanation today. In the
explanation, you mentioned that you will continue to make efforts to make up for unprofitable orders in
relation to Radish Boya. The material also includes a reduction in the percentage of unprofitable orders, butwhat specific measures are you planning to take?
Takashima: What it means is that we have almost finished measures. Unfortunately, it may have also beendifficult to understand my explanation. Basically, the situation right after the management integration wasthat we were in the red and we didn't know what was profitable. Since this managerial accounting forsubscriptions is a little difficult to understand, we thought it was a matter of course, but neither DAICHI WO
MAMORUKAI nor Purple Carrot did this, but by making it visible, we realized that it was 40%.

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44This is very simple, but if we lower the break-even point, we will lose money unless we buy thousands or more.
Logistics costs are incurred. No matter how much you do, you need corrugated boxes, you need logistics, andyou need payment fees if we are engaged in cost-cutting activities to lower the break-even point. On top of
that, by having customers who are below it purchase more than that, we will change the shipping system ormove the customers to a higher plan for a cheaper course.
Some people move like that through the process, and others leave. So, the decline in sales is due to those
who leave, and in the case of Radish Boya, sales have declined by more than 10%, which means that acomparatively large number of customers have left. We had to sort it out, and we did it in the first half of theyear.
Matsushita: Thanks. I have one more question. Oisix also handles a lot of local foods, and I think it contributes
very much to the local industry. If you have any activities for local industries in mind for the next fiscal year
onward, or some new attempts, I would like to know.
Takashima: Yes. We are not at that phase where we can tell specific plans, but last year we made acomprehensive alliance with Ibaraki Prefecture. Oisix did not have so many items from Ibaraki Prefecture, but
as a result, the prefectural government introduced various crops from Ibaraki to us and proposal to sell avariety of items. In addition to vegetables, we were asked for advice on how they could handle unconsumed
fish, so-called miscellaneous fish. We have been cooperating with Ibaraki Prefecture and have established agood relationship. Based on this, some local governments have offered some deals, although we do not haveanything that we can share with you at this point. However, I think there is a possibility that we will collaborate
with local governments.
Matsushita: Thanks.
Moderator: Thanks. If you have any other questions, please raise your hand.
Matsuo: I’m Matsuo from Diamond Chain Store. I have two questions. You said that the meal kit for vegans
was released last month. How sales will increase in the future is one of my questions.
Second, after the wholesale business of kindergartens became profitable, I would like to know what specificmeasures have brought it into the black.
Takashima: Thank you very much. I’m not sure about the meal kit for vegans. It's been a week since we started
sales. I feel that sales in the first week are about 1.2 times the planned level. I'm sorry that I don't know about
feedback from customers after they tried it since we are going to receive it from now on. So, I’m still not sure.
Sorry.
I think we will be able to tell you how much aspiration we have for that after a while. However, after theannouncement of the acquisition of Purple Carrot for vegans, I believe that there has been an increase in thenumber of approaches from people who had not had contact with us, such as the yoga or Pilates community.
What I can say is that Oisix was a brand for mothers who are raising children. However, in regards to the veganmeal service, if we generalize that lifestyle as something aspirational, our original target audience of mothers
might get angry, but I feel that we have more contact with those kinds of people. We will be able to promote
it in segments that we have not been able to try before. However, we are not yet at the phase where we cantell you that for sure.
The kindergartens field is close to the B to C of Radish Boya that I mentioned earlier, but what we have done
is to change the centers to lower distribution costs, then change delivery methods, reduce delivery costs, andthen replace almost all of the contents of the product to improve the cost-of-sales ratio while raising safety.
It was like that, although it was a relatively common solution. To visualize the performance, we considered
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management accounting, and then lowered each cost item. Those are what we have done over the past six
months, and, as a result, the company started to make profit.
Matsuo: Thanks.
Moderator: Thanks. Are there any other questions?
Sumi: Thanks for your explanation. I am Sumi from Tokai Tokyo Research Institute. I have two questions.
Regarding the Vegeneko Project on page 43 of the slides, first of all, you are aiming at approximately 1,500
vendors. How many vendors do you have today, and how many vendors use this? What is your current outlook
for those vendors who would use this?
The second point is food SPA on page 44. Please tell us if there is a target for the ratio of PB for each company's
brand, and if this percentage increases, how much will it lead to a reduction in the cost of sales ratio. Those
are my two questions.
Takashima: Thanks. Currently, we have just under 10,000 customers for processed and fresh products. The
targets are relatively small. Large companies have already had efficient systems, and they use charter flights,
but small companies use door-to-door delivery service. Yamato’s door-to-door delivery service is not designed
for farmers to ship vegetables, so the cost efficiency is very bad when they send ten boxes to one place.
Whether they use Yamato or Sagawa or Japan Post, logistics costs are very high. However, there are also manysmall-lot producers who use a transportation system for B to C to transport their foods, and they are thetarget of our Vegeneko Project. I think the targets will be at least about 1,500 vendors, and perhaps these
1,500 vendors will have lower costs, but I think we will be able to do business with those that we have notbeen able to have deals with before.
We do not have a clear goal for SPA. We are aiming at 100% for Oisix, and we have not made any clear any
others, but this has a marketing-oriented sense, so I think that we will be targeting a cost ratio of around 13%, as described above.
Sumi: Thank you.
Moderator: Thanks. Then, a person who raised your hand, please ask questions if they are not the same as
those that have already been asked before.
No? So, if anyone has any other questions, please raise your hand.
Takeshita: I’m Takeshita from Shokuhin Shogyo. The meal kit is doing well, but it is said that cooking time isgradually decreasing, so is there a possibility that you will move onto prepared foods, such as delis?
Takashima: Regarding our business?
Takeshita: Yes, as a business.
Takashima: I think it is very possible. However, delis and meal kits are different, and prepared foods havebeen there as a market. So, I think that meal kits were made as something between prepared foods andingredients, but we also sell prepared foods. For example, we sell potato salads and other products, so there
is a possibility that we will focus on that, and I think there is a possibility that we will deliver prepared foods
that have been already available. The great potential as a white space is that there is a lot of space between
prepared foods and ingredients, including what we are doing in this meal kit. The ingredients, in relation to

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Oisix that I mentioned earlier, come with recipes, and all of the ingredients can be used, so I feel that there isa great opportunity there.
Takeshita: Something like ready meals for a microwave oven.
Takashima: We've already started selling them, such as frozen pizzas, for example. We started selling them
before we started the meal kit. In terms of growth, the meal kit area seems very large.
Takeshita: Thanks.
Moderator: Thanks. So, if there are any other questions, please ask.
The next question will be the last question, so if you have any questions, please raise your hand.
Participant: I think there is a great deal of potential for doing business in China. How do you plan to do this in
the future?
Takashima: We are currently conducting business in two ways, and we are planning to establish a Chinese B
to C system in order to sell products, and then take Japanese food to China. Regarding the Chinese B to C, I
think it will take a lot of time. I am experimenting with Japanese living in China and Shanghai, and Japaneseliving in Shanghai still have a great need for safe foods. I am pleased with that, but I think it will be a challenge
to extend it to Chinese people in the future.
When it comes to what is difficult, we will look for safe products in China and sell them, because we will never
be able to bring all Japanese products into China. However, since many marketing activities are fraudulent, it
will be fairly difficult for us to gain trust from Chinese customers, so B to C is what we will dot in the future.
For B to B, there is a lot of political dependence, but I often hear about whether Japanese fruits are beingtransported through Vietnam or Hong Kong for sales. There is a great deal of latent demand for Japanesefruits, and if they are allowed officially, we think that there will be opportunities regarding Japanese fruits.
We do not know well about the political part of the latter, and we are planning to prepare for such an
opportunity so that we can seize it.
Moderator: Thanks. It’s time to conclude the Q&A session. Accordingly, we will close the interim financial
results briefing of Oisix ra daichi Inc. for the fiscal year ending March 31, 2020. Thank you very much for today.
[END]______________
Document Notes
1.
2.

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