9Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

10

Part 1

Value Creation Story
11

Message From the President

15

Value Creation Process

17

Process for Identifying Material Issues

20

Material Issues

Tsunoshima Bridge, Shimonoseki Cityin Yamaguchi Prefecture
Photo by Yuji Yoshizu
West Japan Operation Division
Coca-Cola Bottlers Japan Vending Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

11

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

12

Message From the President

Prioritizing structural profitability for
future growth and profitability

On the publication of the 2022 Integrated Report
The Coca-Cola Bottlers Japan Holdings Group (CCBJH

Japan experiences significant change at an acceleratingGroup) has consolidated its previous Annual Review andpace, we remain agile in adapting to these environmental

CSV Report into a single document, the 2022 Integratedchanges. Concurrently, we are committed to pursuing

Report. This comprehensive report aims to provide valuablebusiness growth and creating shared value with society

information to our stakeholders, including shareholders andthrough our unique value creation process.

investors, to foster a better understanding of our long-term

Within this integrated report, we provide an overview ofvalue creation strategy. Our goal is to promote transparency

our initiatives as a total beverage company. These include

and facilitate a deeper insight into our processes ofactions focused on ensuring the safety and reliability of ourgenerating sustainable medium- to long-term value.

products, as well as our commitment to creating shared

Our corporate philosophy, “Paint it RED! Let’s Repaintvalue (CSV). Furthermore, we outline strategies for

Our Future,” guides our mission to “Deliver happy moments

implementing a medium- to long-term value value creation

to everyone while creating value.” It serves as the basis ofapproach and attaining sustainable growth.

our daily business operations. As the beverage industry in

Calin Dragan
Representative Director, President

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Achieving steady results: Outcomes of 2022 transformation initiatives
In 2022, the impact of COVID-19 began to subside.

activities to maximize opportunities for increased demand

Nevertheless, we were forced to steer our business throughfrom the recovery in social activities and the heat wave. As

difficult circumstances created in part by a substantial

a result, we were able to achieve growth in both sales

increase in costs arising from external factors. Against thisvolume and value share. We also revamped our Sales andbackdrop, we had to address rising raw material, supplies,

Operations Planning (S&OP) process to ensure a stableand energy prices and the impact of foreign exchange

product supply. This has significantly improved the service

rates, as well as strengthen our revenue base. As part oflevel associated with product supply in times of sudden

our pricing strategy, we revised our product prices ahead ofchanges in demand, which had previously been an issue, inothers in the industry. We implemented price revisions forturn contributing to volume growth. In addition, welarge PET bottle products in May 2022 and for small

continued to push forward with transformations that will

packaged products in October 2022. Through management

lead to future growth. This included the launch ofdecisions based on strong determination and thoroughoperations at the Akashi Mega Distribution Center (DC), theexecution in the market, we are already seeing results suchsecond of our automated distribution centers in Japan.

as an improvement in revenue per case. I believe these

Furthermore, we continued to work on optimizing ourstructural profitability improvement initiatives are vital for thebalance sheet. The key measures for future growth that we

future of the beverage industry and our business. Moreover,have been working on in each field are steadily producing

from a growth standpoint, we leveraged the growth

results. This proves to me that we are headed in the rightfoundation we built and implemented effective sales

direction in terms of strategy.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

13

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

14

Message From the President

2023 to be a year of focusing on profits and prioritizing improved profitability

promote information disclosure based on Task Force on

discussions is promptly shared internally. These become the

Climate-related Financial Disclosures (TCFD)

guidelines that facilitate our sustainability activities.

In 2023, we expect the price of raw materials, supplies, anda supply chain network to realize high quality, low costs,

recommendations and participation in climate change

We also continue to promote various horizontal

energy to continue to rise. This, combined with the impact

and stable supply. Specifically, on the manufacturing side,

initiatives. In addition, we hold diverse discussions at

recycling initiatives, including “bottle-to-bottle*1,” “CAN toof foreign exchange rates, will require us to address further

we will work to promote efficiency in manufacturing

Sustainability Committee meetings among leadership-level

CAN*2,” and packaging recycling initiatives, “pallet-to-pallet*3”

cost increases. In addition to utilizing the results andprocesses and build a flexible manufacturing system.

employees from each division. Feedback from theseand “shell-to-shell*4,” to effectively utilize resources.

lessons learned to date, we will promote initiatives to

Meanwhile, on the logistics side, we will optimize ourachieve a stable and low-cost supply of products and a

distribution network by such means as ensuring stable

thorough sales strategy that emphasizes investment

operations at the Akashi Mega DC, which was opened inefficiency. We will do this by placing the highest priority on

2022. We will also focus on ensuring stability in our S&OP

improving profitability in this year of focusing on profits.

process, which was revamped in 2022. Moreover, we will

In our commercial activities, we will further improve
revenue per case through an appropriate pricing strategy
centered on price revisions. Our aim is to achieve a steadycontinue to work on achieving a timely and low-cost supplyof products in response to changes in the environment.
As for the overall business foundation, we will further*1 Collection, processing, and recycling of used PET bottles, which are then regenerated as PET bottles and used as beverage containers*2 Horizontal recycling of aluminum cans
*3 Light blue or black platforms used for transporting and storing products*4 Cases for bottle products

Promoting human capital management by strengthening our human capital strategy
I am certain that people and organizational strength

challenging the business environment, our driving force isrecovery in revenue and establish a profit structure foraccelerate the standardization of business processes andconstitute the principal foundations of our business. Throughthe desire to create value for our stakeholders and tosustainable growth. In terms of volume, we are executing

improvement of efficiency through DX. Our goal is tointegration, we have become a company where humancontinue as the preferred partner for decades to come. We

core category-focused strategies, expanding our productestablish a robust cost structure that will allow us toresources and cultures espousing various values coexist.

are committed to making great strides forward toward

portfolio based on innovation, and executing marketing

respond flexibly to any changes in the environment. Cost

We consider this a strength and are implementing various

sustainable growth and improved corporate value by

investments emphasizing effectiveness and efficiency.

pressure remains severe, but we will improve profitability bymeasures to maximize human resources value and achievedelivering happy moments to everyone while creating value.

steadily moving forward on initiatives in each area.

sustainable growth while leveraging our diversity. In addition,

Thank you in advance for your continued understanding of

we actively provide learning opportunities, such as ourand support for the CCBJH Group.

In manufacturing and logistics, we are working to build

human resources development programs for leaders who

Identifying unique material issues amid accelerating changes in the business environment

are driving change, thereby improving the capabilities of theentire organization. Moreover, to enable employees to reachIn 2019, the Coca-Cola System in Japan formulated aestablishing the Sustainability Framework and reidentified

their full potential, we have introduced compensation

Sustainability Framework that identified three platforms ofmaterial issues unique to our company. By separating thesystems that emphasize results and have established a

Inclusion, Communities, and Resources, and nine priority

identified issues into the categories of Key Themes incommendation system. We are working on various otherissues to be addressed to achieve our unique non-financial

Sustainable Value Provision, Key Themes in Sustainablemeasures as well, such as strengthening Diversity, Equity &CSV Goals.

Society, and Key Themes in Sustainable Organizational

Inclusion (DE&I) and promoting diverse work styles.

However, since establishing this Sustainability

Management and linking them to our Value Creation

We will continue to actively invest in human resources

Framework, the macro environment surrounding our

Process, we have expressed our vision in the form of adevelopment to enhance human resources value, which iscompany has changed significantly. In addition, the change

Value Creation Story.

one of our strengths and essential for the future growth ofis accelerating and heavily impacting consumer behavior

To address Mitigation of and Adaptation to Climate

our company.

and business operations. Because of this and other factors,

Change, a material issue categorized as one of the Key

We will continue to maintain high quality standards tothe business environment remains challenging and

Themes in Sustainable Value Provision, we will establish aprovide safe and secure products and services to meet theuncertain. In order to realize our mission to “Deliver happy

new Sustainability Committee in 2023. Our aim is toneeds of everyone. In addition, by providing value to various

moments to everyone while creating value,” we havestrengthen the system for establishing policies andstakeholders through our business activities, we will create

reviewed our existing material issues identified whenstrategies on climate change and other issues and toa virtuous cycle for society as a whole. No matter how

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

15

Introduction

Financial &Non-Financial Strategy

Value Creation Story

Sustainability

Risk Management

Governance

Financial /Corporate Information

16

Value Creation Process
Coca-Cola Bottlers Japan Holdings aims to realize our mission by continuously providing value forall stakeholders through our unique value creation process.

Main Capital / Strengths

Business Model and Output
Business Model

OutputPartnership with The Coca-Cola Company andCoca-Cola (Japan) Company

Beverages for Life

Input
Manufacturing &Commercial capital

Supply chain and sales foundation forthe stable supply of a varied product line

17

PlantsSales/distribution centers
Vending machines

Lineup of about 40 brands andmore than 600 products

About 700,000
Sales plan

The globally shared Coca-Cola brandand the innovation capabilities of the
global Coca-Cola system

About 225

Human capital

Diverse human resources supporting
sustainable growth and an organizational
culture that maximizes ability
Number of employees About

Production

Coca-Cola Japan’s
Value Chain

CCBJH Group’s
Value Chain

Align

Research anddevelopment

Logistics

Planning

Collection /Recycling

14,500

Sales /
MarketingSocial capital

Innovation forSociety

Measures to address issues suchas recycling, water conservation,and open innovation

13,287,000 m
Water replenishment rate 420%

3

Water usage

Financial capital

A sound and stable financial foundation
and a decisive financial structure to
realize strategic investment measures

Creating a sustainableglobal environment for
future generations

࠮Promoting businessprocess management

࠮+L]LSVWPUN0;WSH[MVYT
and DX system

࠮:\Z[HPUHIPSP[`
framework࠮Establishment of CSV
promotion structure

Mission࠮0TWYV]PUN
business resilience

࠮7YVTV[PUNO\THU
resource management

Achieving sustainable developmentof local communities throughcollaboration for regional economic
growth and community building

Platform for
Sustainable Growth

Growth platform for employees,
customers, suppliers, and otherstakeholders

Natural environment

Deliver happy
moments toeveryone while

Suppliers

creating value
Impact on operations
Achieving stable andsustainable growth in
the market

Mitigating environmental impact
by raising consumer awarenessand forming a responsible
recycling/circular society

Shareholders / Investors

Foundational initiatives

Increasing share value throughprofit growth, enhanced
shareholder returns, andthorough implementation of
corporate social responsibility

830 billion yen
A+ (R&I) / AA- (JCR)

Total assets Approx.
Rating

Impact on
the environment

Communities

About 111 million

Sustainable securing of biologicalresources, raw materials, and supplies
through conservation of natural capital

Contributing as
a partner to all
stakeholders

Achieving sustainable businessgrowth through constructive
relationship building

35 prefectures

Natural capital

Impact on society

Employees

Tokyo, Osaka, Kyoto andConsumers insales area

Customers (Consumers)
Fostering wellness by providing
high-quality products andservices that enrich daily life alongwith new occasions to enjoy
beverages and refreshments

Improving engagement throughsystems and work environmentsthat facilitate employee growth
to reach their full potential, as
well as through the formation ofautonomous organizations

Collaboration and engagement withstakeholders, including local communities
and customers, to solve social issues

Sales area

ImpactContributing to the creation of
economic, social, andenvironmental value for customers
through expansion of business
opportunities and collaboration

Marketing

The Coca-Cola
Company

Outcomes

Ideal Image

Business partners

Procurement

Beverage
base
production

About 40

Bottling partners
worldwide

Beverages in tune with people’s
life and daily living

About 300

Intellectual capital

Brands in Japan

Value to Stakeholders

As of December 31, 2022

Key Themes in Sustainable Organizational Management

CCBJH Group’s Material Issues(Go to page 20)

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

and Safety ࠮ Resilience to Natural Disasters ࠮ Corporate Governance࠮ Product Quality
࠮ Sustainable Supply Chain ࠮ Responsible Commercial Practices

࠮Key Themes in Sustainable Value Provision࠮Packaging and Recycling (Circular Economy)
Mitigation of and Adaptation to Climate Change
Employee Development & Wellbeing

࠮

Key Themes in Sustainable Society࠮ Water Stewardship࠮ Healthy Products / Services ࠮ Contribution to Local Community Development
࠮ Sustainable Conservation of Biological Resources ࠮ Diversity, Equity and Inclusion
Coca-Cola Bottlers Japan Inc. Integrated Report 2022

17

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

18

Process for Identifying Material Issues
As part of Coca-Cola System in Japan’s Sustainability Framework, we are committed to pursuing activities that
address social issues through creating shared value (CSV). To further advance our efforts and fulfill our mission,
we have identified our material issues for 2023.

STEP

1

Recognizing the current status

STEP

2

Identifying material issues

Further adaptation is required to changes in the social environment while promoting the Sustainability Framework

Gaining New Perspectives: Identifying material issues through analysis, surveys, and evaluation

In 2019, the Coca-Cola System in Japan established its
Sustainability Framework, which outlines three platforms Inclusion, Communities, and Resources - and nine key issues
to be addressed. Despite our ongoing efforts to promote
activities based on this framework, it has been four years since
its formulation and the macro environment continues to evolve.
These include changes to the global economy, geopoliticalrisks, a declining birthrate and aging population, and climatechange. Additionally, the recent COVID-19 pandemic, risingIn identifying material issues, we first revisited the agreed
Coca-Cola System Sustainability Framework for Japan. We
then conducted a social axis evaluation based on ESG reports,
NGO reports, industry reports, media analyses, etc. Thisevaluation was used to identify topics of social attention andimportance, from which a list was made of items to be added
as material issues.
The listed items were surveyed for their degree ofimportance. Based on the results of this survey, they weregrouped and organized, social axis evaluation was conducted,
and we drafted a proposal of what our material issues should
be. The project team conducted an internal evaluation by

raw material and energy prices, and the weak yen have had amajor impact on consumer behavior and business. This has led
to sustained uncertainty and challenges in the businessenvironment, making forecasting increasingly difficult.
To fulfill our mission of delivering happy moments toeveryone while creating value, we have established agroup-wide, cross-divisional project team to identify ourmaterial issues in response to these changes.

analyzing documents such as the Annual Review and the CSV
Report. This evaluation checked the materiality proposal forcomprehensiveness and appropriateness, and the team thendiscussed the proposed definition of material issues. Based onthese discussions, we have identified and defined 13 material
issues unique to our Group, covering three categories of“environmental,” “social,” and “governance.”
The importance of the 13 material issues was scored byinterviewing ESG-related investors, NGOs, local governments,and our management team, including the CEO, as well as byconducting employee surveys. This information was used toplot a materiality map of importance levels.

The Sustainability Framework for the Coca-Cola System in JapanThe Coca-Cola System in Japan has identified 189 issues fromvarious sources such as SDG-related reports and guidelines,
benchmark surveys by outside consultants, stakeholder interviews
with consumer groups, retailers, NPOs, academic groups, and
ESG investors, ISO 26000, and government agency reports. Theseissues were then narrowed down to 33 based on common sharedcategories such as renewable energy and aging society. We thenspecified 15 issues that were highly relevant to both society andour business.
Through interviews and workshops with management andemployees of Coca-Cola Japan and Coca-Cola Bottlers Japan, four
key issues were identified. Further discussions on the 19 total key
issues led to a common framework that specified three platforms Inclusion, Communities, and Resources - and nine key issues.

Three platforms and nine priority issues

Priority
Topics

Focus
TopicsInclusionCommunities

Resources

Gender࠮ Drive impact throughtwo national platforms(Inclusion, Resources)

Packaging/PET

Age/Generation
Disabilities
LGBTQ࠮ Initiatives that are
sustainable andadditionally have local
relevance

Water

1

Organization andidentification of issue items• Identifying topics of social and industry attention and importance• Listing of items to be added as material issues

2

Drafting of a proposal formaterial issues

3

Selection and definition of
13 material issues• Conducting importance surveys on existing and additional issues• Grouping issues and reorganizing the issue list based on issue granularity• Conducting social axis evaluation in accordance with issue granularity,
drafting a proposal for material issues• Organizing and preparing a proposal for material issues and their proposed
definitions through internal evaluations, including analysis of our data
• Discussing issue granularity and definition within the project team
• Selecting 13 key material issues across three categories:
Environmental, Social and GovernanceGreenhouse gas emissions
Renewable energyof material issue
4 Scoring
importance

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

• Confirming and organizing existing issues being addressed by
the Coca-Cola System in Japan• Conducting interviews with stakeholders• Conducting interviews with management including the CEO and employee surveys• Scoring importance for the preparation of the proposed map of material issues

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

19

Introduction

3

Organizing material issues

Very
high

Key Themes in
Sustainable Society

Key Themes in
Sustainable Value Provision࠮Packaging and Recycling (Circular Economy)
Mitigation of and Adaptation
to Climate Change
Employee Development &Well-Being
Contribute to Local
Sustainable
Community Development
Conservation of
Water Stewardship
Biological Resources
Diversity, Equity
Responsible
and Inclusion
Commercial Practices
Corporate Governance
Healthy Products/
Services࠮Sustainable
Supply Chain

Product
Quality and
SafetyHigh

Our own material issues are based on the key issues identified in
the Sustainability Framework and the 19 key issues selected during
the framework’s formulation process, to which topics to be added
as material issues were also incorporated. These were evaluatedand material issues were identified, then classified in connection to
three platforms: Inclusion, Communities, and Resources. This
enables us to ensure consistency between our sustainability

Importance for the CCBJH Group

Go to page 51

Mitigation of and Adaptation
to Climate Change

To mitigate and adapt to climate change, we aim to reduce our environmental impact throughinitiatives throughout the value chain, including the reduction of our greenhouse gas emissions.

Go to page 53

Employee Development &Wellbeing

We believe that employees are important assets in conducting sustainable business. Therefore,in our human resource development system, we work to create a workplace environment thatmaximizes and develops the potential of each employee. We focus on our employee’s safety
and their physical and mental well-being by measures such as enhancing their work-life balance.

Go to page 35

20

Key Themes in Sustainable Society
Water StewardshipAs a company whose main product ingredient is water, we strive to reduce, reuse, and properly
treat water used in manufacturing. We also work with local communities to conserve water
resources in a sustainable manner to pass on abundant water resources to future generations.

Go to page 53

Sustainable Conservationof Biological Resources

We conserve biodiversity and achieve sustainable business by recognizing and reducing theimpact on the natural environment and ecosystems whilst making business decisions.

Go to page 48

Healthy Products/Services

We contribute to consumer wellness by providing high value-added products and services that
contribute to the maintenance and promotion of health and nutrition.

Go to page 61

Diversity, Equity andInclusion

We foster a culture that respects human rights, diversity, and fairness, and create anenvironment where each individual can maximize their abilities regardless of gender, age,disability, race, nationality, sexual orientation, gender identity or expression, or other attributes
throughout the value chain.

Go to page 43

Contribution to Local
Community Development

Based on collaboration and communication with local communities and other stakeholders, we
engage in activities aimed at developing sustainable local communities and solving social issues.
Through our business, we contribute to the revitalization of local economies.

Go to page 47

Very highactivities and the key issues of the Coca-Cola System in Japan, as
well as our own material issue areas—Key Themes in Sustainable
Value Provision and Key Themes in Sustainable Society.
Furthermore, the Key Themes in Sustainable Organizational
Management, common to all three platforms, have been
established as the foundation for our organization’s management.

Inclusion
Gender
Age/Generation
Disabilities
LGBTQ

Communities• Drive impact through two national
platforms (Inclusion, Resources)• Initiatives that are sustainable andadditionally have local relevance

Resources

Key Themes in Sustainable Organizational Management
Product Quality
and Safety

In order to provide safe, high-quality, fresh, and refreshing products and services to ourconsumers, we implement strict quality systems and processes in all business processes,
from raw material procurement, manufacturing, distribution and transportation, to sales andservice. In this way, we guarantee and improve the safety and quality of our products.

Go to page 63

Resilience to
Natural Disasters

We strive to build a system and structure that is safe and robust enough to minimize the impact
on our business in the event of any injury to employees and damage to facilities for
manufacturing, logistics, sales operations, and business sites caused by large-scale natural
disasters such as earthquakes and typhoons.

Go to page 62

Corporate GovernanceWe strive to build and maintain a strong corporate governance structure to improve
management soundness and maximize corporate and shareholder value. In accordance with
the intent of the Corporate Governance Code, we strive to improve the skill sets of ourdirectors and all employees, pursue an optimal organizational design for our company, andfurther strengthen our governance.

Go to page 69

Sustainable Supply Chain

We build a sustainable supply chain through the stable procurement of materials and raw
materials, addressing human rights and environmental issues in the supply chain, conducting
appropriate transactions and responsible procurement.

Go to page 33

Responsible Commercial
Practices

We build our relationships with our consumers by ensuring responsible marketing of our full
beverage portfolio, including alcohol, ensuring compliance with all commercial activities in line withlaws and regulations. We provide our stakeholders with access to useful and sufficient informationon the health and nutrition of our products through easy-to-understand communications.

Go to page 25

Packaging/PET
Water
Greenhouse gas emissions
Renewable energy

Key Themes in
Sustainable Value
Provision

Employee Development& Well-Being—

Packaging and Recycling(Circular Economy) /Mitigation of and Adaptation
to Climate Change

Key Themes in
Sustainable Society

Diversity, Equity
and Inclusion

Healthy Products and Services /Contribute to Local Community
Development

Water Stewardship /Sustainable Conservationof Biological Resources

Key Themes in Sustainable
Organizational Management

Product Quality and Safety / Resilience to Natural Disasters / Corporate Governance
Sustainable Supply Chain / Responsible Commercial Practices

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Financial /Corporate Information

To achieve the Coca-Cola Company’s 2030 Global Vision World Without Waste, we will workon activities such as light-weighting, horizontal recycling, and waste reduction through thethree pillars of design, collection, and partnerships. By doing so, we contribute to thepromotion of recycling of plastic and other materials in Japan.

Relationship between the Sustainability Framework and our own material issues

The CCBJH
Group’smaterial issues

GovernancePackaging and Recycling(Circular Economy)

Resilience to Natural Disasters

Key Themes in Sustainable
Organizational Management

Focus Topics

Risk Management

Key Themes in Sustainable Value Provision

Map of material issues

Importance for stakeholders

In mapping our material issues, for the social axis we scoredimportance for stakeholders based on factors such as
interviews with outside experts and analysis of various reports.
For the business axis, we scored importance for the CCBJHGroup based on interviews with management and employee
surveys. The resulting scores were plotted along the axis ofimportance for stakeholders and for the CCBJH Group to
create a map of material issues. We then classified the material
issues in the upper right of the map as Key Themes in
Sustainable Value Provision, those in the upper left as Key
Themes in Sustainable Society, and those in the lower right as
Key Themes in Sustainable Organizational Management.

Priority Topics

Sustainability

The CCBJH Group’s material issues and definitions

Mapping material issues based on importance to stakeholders and the CCBJH GroupThe Coca-Cola
System in Japan

Financial &Non-Financial Strategy

Material Issues

Process for Identifying Material Issues

STEP

Value Creation Story

Coca-Cola Bottlers Japan Inc. Integrated Report 2022