Q&A from Financial Statements Briefing for 1H of Year Ending December 31, 2016
<Date and Time> August 4, 15:30-17:00<Speakers> President, Representative Director Tsutomu Kamijo, Director Shinichi Soya, andPresident of Sapporo Breweries Ltd. Masaki Oga
1. Japanese Alcoholic Beverages Business
Q. I believe you are actively running a marketing campaign this year under the business policy “firstyear of a new period of growth in the beer business”. If there were any remarkable reactions fromcustomers, please tell us about them including the effects of your marketing.
A. (SB President Oga)
As for “Sapporo Draft Beer Black Label”, an increasing number of customers are appreciating its“flavor”. Through the “Otona Elevator” series of TV commercials, we have been broadcastingover the past six years, we have appealed to the audience that our Black Label is a beer to beenjoyed by adults who have their own sense of values. This has produced significant cumulative
marketing effects, and as a result the number of buyers is gradually growing.
Regarding the advertising method, we are working on reshaping the entire marketing structure.
For instance, we actively deployed online marketing and utilized the “Perfect Beer Garden” events
to provide opportunities to try out the Black Label with customers who never tried it before. Thesealso had a major impact.

2. International Business
Q. What is your policy on establishing a medium- to long-term business model for the North
America business? How are you going to achieve synergies in the Group?
A. (President Kamijo)
As for the Alcoholic Beverages Business in North America, SLEEMAN BREWERIES’ businessperformance has steadily been improving and its sales have increased by about 50% in the 10years after the acquisition in 2006. In order to achieve further growth, we may need anotherproduction base somewhere. It would be ideal if such a production base can be established on thewestern side of the U.S.
For the Soft Drinks Business, we would like to build a business model that facilitates developmentof synergies between Silver Springs Citrus, Inc. and Country Pure Foods, Inc. To that end, we arethinking to promote our initiatives for improving management efficiency from a wide spectrum ofviewpoints. These viewpoints include production equipment, personnel, commodity lineup,
expanded provision of commodities to the field of B-to-B marketing in which the companiesspecialize, and enhancement of their sales capabilities.

3. Food and Soft Drinks Business
Q. Regarding the Food and Soft Drinks Business, please tell us about the progress in your initiatives
on saving costs by improving management efficiency.
A. (Director Soya)
As for our activities to improve management efficiency, this year, their effects were reflected themost in the Vending Machine Business. The key for the Vending Machine Business is return oninvestment, and we have been making efforts to secure and maintain profitable locations. For
vending machine-related costs, our original plan was to improve profit by 0.6 billion yen for theyear, but an improvement of 0.5 billion yen has already been achieved as of the first half. The
effects of our cost-saving measures for this field were far greater than our expectations at thebeginning of the year, and we are going to keep implementing cost-saving initiatives in the second
half of the year as well. As a side note, at the end of July, the Manufacturing Department
introduced aseptic lines to the mainstay plant in Gunma, enabling us to produce in-housecarbonated beverage. In-house production is part of our ongoing cost reduction efforts, which we
started with packers and have since been promoting.

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