Oisix ra daichi Inc.

In the food e-commerce market, intensifying competition with online supermarkets and delivery service providers is anticipated, and in the B2B subscription business, there is a risk of declining contract prices due to price competition among major players in the school/institutional catering industry. In the social services business as well, efficient business operations are required amid fiscal contraction and growing cost-reduction needs at local governments. The Group aims to differentiate itself by strengthening the uniqueness of its high-value-added products and services and by rapidly responding to latent needs.

In the provision of ingredients and meals in the B2C and B2B subscription businesses, if food poisoning, foreign object contamination, or allergy-related incidents occur due to hygiene management issues, there is a risk of business suspension or liability for damages. In the social services business as well, a serious accident during the operation of public facilities could result in a business suspension order from a local government. The Group works to prevent such incidents through compliance with safety-related laws, regulations, and manuals, as well as regular internal audits.

Because the Group handles agricultural, fishery, and livestock products from the primary industry sector, if a large-scale typhoon, heavy rain, or other wind or flood damage directly hits production areas, shortages or quality deterioration may occur, potentially affecting business and results. In addition, if wind or flood damage affects logistics and distribution, shipping and delivery could also be disrupted. The Group seeks to mitigate this risk by diversifying its contracted production areas nationwide and establishing procurement systems for key items from multiple production areas.

Delays in responding to global greenhouse gas emission regulations and food waste reduction initiatives could lead to a decline in social credibility. In addition, an increase in extreme weather events due to climate change may affect the supply of agricultural products and other goods. The Group is working to reduce greenhouse gas emissions across its entire supply chain and to reduce food loss by utilizing irregularly shaped agricultural products and expanding sales of meal kits.

There is a risk that producers may falsify labeling regarding pesticide use or provide false information about quality, which could lead to administrative sanctions or damage to brand image. Regarding the issue of food radioactive contamination, social consensus has not yet been established, which may make it difficult to respond promptly to future regulatory changes. The Group strives to ensure quality and safety through its own handling standards, on-site inspections of production areas and residual pesticide testing, and an inspection system utilizing third-party organizations.

Because logistics operations are concentrated at specific sites, such as those for the Oisix brand (Ebina City and Atsugi City, Kanagawa Prefecture) and the Daichi wo Mamoru Kai brand (Narashino City, Chiba Prefecture), a natural disaster, fire, or other event that renders operations impossible could result in inventory losses, delivery delays, or service suspension. The Group aims to maintain continuity of shipping operations by adjusting delivery operations using operable sites among its seven nationwide locations in the event of an emergency.

The Group depends on Yamato Transport Co., Ltd. for delivery of products under the Oisix brand, which accounts for just over half of the sales of the B2C subscription business, its core segment. If the delivery company requests a significant increase in delivery fees or scales back the business relationship, this could affect the Group's business and results. The Group promotes joint projects with Yamato Transport not only in last-mile delivery but also in procurement logistics, and strives to maintain a favorable business relationship.

Most operations, including order receiving, ordering, inventory, and shipping, depend on business management systems, and if a system failure occurs due to a sudden surge in access, computer virus intrusion, malicious acts, or application defects, this could have a significant impact on business and results. The Group has strengthened its information security framework for both emergency and normal times through system redundancy measures, firewalls, virus checks, and the establishment of a CSIRT.

Through its e-commerce sales, the Group holds personal information such as names and addresses for a large number of customers, and if an information leak occurs, this could affect business and results through liability for damages or loss of social credibility. The Group obtained ISMS certification in 2018 and implements data encryption, strict access controls, regular system diagnostics by external organizations, and internal education for all employees.

The Group is subject to a wide range of laws and regulations, including the Food Sanitation Act, the Act against Unjustifiable Premiums and Misleading Representations, the Health Promotion Act, the Consumer Contract Act, and the Worker Dispatching Act, and failure to comply with these could affect business and results through restrictions or suspension of business activities. The Group manages this risk through the development of various rules and guidelines such as a code of ethics, annual compliance training, and an internal reporting system via a corporate ethics hotline.