KEY COFFEE INC

Business Details

The core segment operated directly by the company (Key Coffee Co., Ltd.). It comprises three markets: the commercial-use market (proposing food and beverage items to coffee shops, hotels, restaurants, etc.), the household-use market (sales of coffee and tea to food wholesalers and retailers), and the raw-material market (sales of raw coffee to beverage manufacturers). This core business accounts for approximately 90% of consolidated net sales, and centers on value-added products such as the premium Indonesian coffee "Toarco Toraja," covering the entire value chain. Major customers are Coca-Cola (Japan) Company, Limited and Mitsui & Co., Ltd.

Recent Overview

Full-year FY2026 (ending March 2026) net sales of ¥83,602 million and segment profit of ¥1,574 million, both up substantially year on year

For the full year of FY2026 (ending March 2026), net sales to external customers in the Coffee-Related Business segment were ¥83,602 million (a substantial increase from ¥69,883 million in the prior year), and segment profit was ¥1,574 million (up approximately 78% from ¥883 million in the prior year). The effects of price revisions and expanded transactions linked to raw coffee bean market prices in the raw-material market are believed to have contributed. Note that, in the correction to the earnings report dated June 25, 2026, the figures for segment assets, liabilities, depreciation expense, and increase in fixed assets were revised due to a review of the aggregation method, but there is no impact on the consolidated financial statements.

Key Products

Growth Drivers

• Raising sales unit prices through price revisions for commercial-use and household-use products (sequential revisions to delivery prices and manufacturer shipment prices)
• Expansion of net sales through transactions linked to raw coffee bean market prices in the raw-material market (benefiting from the surge in the ICO composite indicator price)
• Creating demand in the household-use market through expansion of the "KEY DOORS+" brand product lineup and nationwide promotions
• Expanding the sales channel for professional use through the launch of the commercial-use online shop "KEY'S TABLE"
• Enhancing the succession of coffee shop culture and brand value through the consolidation of Inoda Coffee Co., Ltd. as a subsidiary (July 2025)
• Expanding net sales to the major customer, Coca-Cola (Japan) Company, Limited

Risks

• Continued elevated raw coffee bean prices (with the ICO composite indicator price remaining in a high range above 300 cents per pound), keeping raw material costs elevated
• Rising import raw material costs due to the continued yen depreciation (in the upper ¥150 range against the dollar)
• Market contraction risk from year-on-year declines in domestic raw coffee bean imports and consumption
• Risk of reduced demand from business partners and consumers due to price revisions
• Long-term response costs associated with the "2050 problem" for coffee (shrinking areas suitable for coffee production due to climate change)
• Risk of revenue concentration in major customers (Coca-Cola Japan, Mitsui & Co.)