Processed food business
Overview
We want everything we make to be delicious in every way - but that is not all. We set out to fill meals
with joy and make the dining table a fun, lively place to be. Together with our fellow food lovers, will
stay focused on our customers’ daily lives and address the wide array of issues in the evolving,
diversifying world of food and continue to inspire fulfilling moments that enrich life through food.
We are mindful of the environmental impacts of our products and operations, and we makecontinuous improvements to these wherever possible.

Our processed food business value chain** This diagram represents the value chain of products for frozen and ambient foods. We do not deal
directly with raw material producers - such as growers - who provide raw materials to the trading firms or
to the contracted factories that supply us.

Processed food business sustainability strategy
We operate the processed food business based on our purpose, "Bringing Joy to Meals and Fun to
the Table". In 2019, we selected the three focus areas below and set eight specific targets for thesefocus areas.

Focus areas

Products and services

PeopleSupply chain

Aspirational goals

We will continue to provide high-quality, technology-driven products in response
to our customer's needs, to satisfaction and trust.

We will ensure workplace safety for our employees, while continuously investingin people who can contribute to enhancing corporate value.

We will reduce social and environmental impacts and continue to deliver safe
products to consumers.

The eight specific targets of our processed food business contribute to achieving the goals set out
in the JT Group sustainability strategy.
Respecting human rights
Investing in people
Improving our social impact
Environment

Our business operation andsustainability
In the processed food business, we areworking to develop and provide high-valueadded products so that everyone can freely
enjoy what they want to eat, while staying
close to the diversifying values and interestsof our customers. As part of this effort,

TableMark Co., Ltd. is working to provide
authentic and delicious free-from food in the"BEYOND FREE" category, where specific raw
materials and ingredients are excluded.
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Processed food

Our business
operation andsustainability

Copyright© Japan Tobacco Inc. All rights reserved.

Our business operation andsustainability
Food

Food

Foodsafety

defensequalityFoodcommunication

Environment

We have a rigorous quality and processcontrol system based on four priorities: foodsafety, food defense, food quality, and foodcommunication.

Food safety standards
Our processed food business has 26
factories, which produce a variety of foodproducts, from frozen and ambient foods
and seasonings. Eighteen of these factories
are located in Japan, and eight are located in
China, Indonesia, Thailand, and the U.S. Ourproducts are sold primarily in the Japanesemarket.

We make sure that all of our factories* are certified to the global food safety standard FSSC 22000.
FSSC 22000 is recognized by the Global Food Safety Initiative (GFSI), the food industry’s global bodyfor promoting food safety management.

All the factories contracted to manufacture our products are requested to meet food safety
standards such as ISO 22000 or FSSC 22000, as an assurance that an adequate food safety
management system is in place.
We also work with multiple independent advisors, who have helped to develop our approach to foodsafety since 2008. Throughout the year, these advisors provide useful information. In 2022, theygave presentations to our employees on industry topics such as food safety, consumer
consciousness, and/or the laws and regulations relating to the Food Sanitation Act. These events
provided employees with a greater awareness of new developments and important topics in thefield of quality control.
In order to ensure food safety, we have introduced a system that records information about ourproducts at every stage of the process, from the raw materials and production to processing,distribution, and sales. This means we can retrace our product to any point, if necessary.
* One of our factories, which started its operations in 2020, is on track to receive this certification.

Food defense practices
Food defense is about protecting ourmanufacturing processes and products fromintentional contamination. We apply robust
food defense guidelines across the supply
chain, both in our own factories and ourcontracted factories. We also carry out
annual audits to check how well theseguidelines are being implemented.
We are continuously strengthening our fooddefense mechanisms. We are working on
further utilization of factory cameras andenhancement of our drug management
system both in our own factories and ourcontracted factories.

Enhancing food quality

Food quality control is an essential element of our daily operations. Along with quality improvement
efforts on factory floors, we ensure that all of our employees receive training through customized elearning materials.
We also listen to our consumers’ suggestions for improving product quality, and swiftly share thesewith our factories and operations.
Our internal Quality Assurance Committee enables us to effectively respond to our consumers’
recommendations. The Committee includes not only members of the Quality Control division, butalso representatives from many other divisions, such as Product Development, Manufacturing,Distribution, and Marketing and Sales.
Our consumer complaints management system is based on ISO 10002, the international standard
for customer satisfaction and complaints handling. To enhance the quality of our correspondencewith consumers, in 2016, we introduced a voice transcription system at our Consumer Call Center.
This system transcribes and records correspondence with our consumers on behalf of ouroperators, enabling the operators to focus on providing excellent customer service.

Further food communication
Transparency is at the heart of our business,
and we are always willing to provide details
about our food products. We respond to
consumers’ requests for information anddisclose the precise factory where foodproducts were made, or the country of originof the main ingredients.
We have toll-free numbers on our productlabels which consumers can call for extra
information. In addition, in order to respondto customer feedback more quickly,
TableMark Co., Ltd. is improving the inquiry
form on its website year by year.

We seek to provide safe and delicious food for consumers, in the hope that they will choose ourproducts for their loved ones. This principle is not limited to our R&D and manufacturing sites; itapplies across all of our operations. We understand the importance of listening to consumers, andhave introduced a new online tool to share consumer feedback with all of our employees. We willcontinue to embed and reinforce this consumer-centric approach throughout our operations.

Reducing our environmental impacts

Biomass co-generation system
As part of our efforts to reduce environmental impacts within our operations, one of the companies
within the JT Group, Thai Foods International, built
a biomass co-generation system for its Thai factory, where it manufactures seasonings.

The system, which started its operations in 2020, uses rice husks as an alternative fuel source. Thissystem is expected to significantly reduce purchased electricity usage and the resultant Scope 2
greenhouse gas (GHG) emissions by 6,300 tons per year.
This project, which has been adopted by the Joint Crediting Mechanism of the Ministry ofEnvironment in Japan, not only helps us to reduce energy costs but also contributes to GHG
reduction in Thailand.

Eco-friendly packaging initiatives
Removing the inner film

We have removed the inner film from thepackaging of our "Okonomiyaki" range ofJapanese savory pancakes. Through thisinitiative, we have reduced the amount ofplastic raw materials we use annually byapproximately 31 tons. This change also
reduced our CO2 emissions byapproximately 145 tons.

BeforeAfter

Biomass plastic as a raw material for the packaging

A by-product of rice milling is crushed rice:
rice that is broken during the milling process
and can no longer be used formanufacturing. In a first for the industry, we
are now using the domestic carbon-neutral
biomass plastic RiceResin®*, which contains
10% crushed rice generated by our Group, asa raw material for the packaging of some ofour cooked rice products. In addition tousing RiceResin®, we have reduced theamount of petroleum-based plastic in ourpackaging by around 4.2% compared toconventional products. We have done this bymaking the exterior film even thinner.

* RiceResin® is a registered trademark of Biomass Resin Minamiuonuma Co., Ltd. Old rice that is not edibleand crushed rice generated during rice milling are upcycled into plastic using new technology.

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