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Research Projects 2011 Fellow's Research Projects 2010 Fellow's Research Projects 2009 Fellow's Research Projects Close Home Purpose Value Creation Model Value Creation Story 35 Years of Partnership with Sri Lanka. Sustainable Future Created by KIRIN Gogo-no-Kocha 35 Years of Partnership with Sri Lanka. Sustainable Future Created by KIRIN Gogo-no-Kocha The Environment Community Engagement 2021.08.05 Community Engagement The Environment Gogo-no-Kocha is celebrating its 35th anniversary since its launch. Through this brand, Kirin Beverage is trying to realize the evolution of “purpose branding”*1 by combining the brand strategy with the CSV (Creating Shared Value) strategy*2 in order to make it continue to be a beloved brand 100 years to come. Tea leaves are the basis of the taste. Gogo-no-Kocha has been using Sri Lankan tea leaves since its launch, and our relationship with Sri Lanka has also marked its 35th anniversary. The activities of the Kirin Sri Lanka Friendship Project are also a symbol of our CSV. What kind of activities should we engage in through Gogo-no-Kocha and what should we aim for through those activities? This section looks back on the 35 years of partnership between Sri Lanka and Gogo-no-Kocha and describes the future we want to create. A method to grow a business by gaining empathy from society and consumers through consistent marketing based on brand purpose　(the social significance of a brand) A strategy to create economic value by solving social issues A win-win relationship between Gogo-no-Kocha and Sri Lanka Because tea becomes naturally cloudy when cooled, it is extremely difficult to make tea beverages that have both good taste and good appearance. After repeated trial and error, the development team at that time successfully invented a technology to keep the liquid clear, and Gogo-no-Kocha made a good start in 1986 as Japan’s first plastic-bottle tea. The success of Gogo-no-Kocha has been supported by this technology as well as tea leaves, which form the basis of the flavor. At the time of its launch, the developers of Gogo-no-Kocha focused on tea leaves from Sri Lanka, which is only about 0.8 times the size of Hokkaido. Although Sri Lanka is a small country, it is characterized by its geographical features rich in altitude differences, which brings variation in the taste of tea leaves. Believing in the quality of Sri Lankan tea leaves, as well as the great potential of flavors that vary among regions, we stared the relationship between Sri Lanka and Gogo-no-Kocha. As the production volume of Gogo-no-Kocha increased, the amount of tea leaves we procured increased, which began to affect the amount of tea leaves imported into Japan. In the 5 years between 1985 (before the launch of Gogo-no-Kocha ) and 1990 (after its launch), the volume of tea leaves Japan imported from Sri Lanka increased approximately 1.5 times, and in the 15 years up to 2000, it increased approximately 2.3 times. (Source: Japan Tea Association) In 2018, about 24% of Sri Lankan tea leaves Japan imported (*data by Kirin Beverage) were used for Gogo-no-Kocha. Sales trends since launch and target for 2021 By purchasing high-quality tea leaves from Sri Lanka, we can produce high-quality tea beverages. Because we purchased a large amount of tea leaves, in the meantime, the profit of tea farms in Sri Lanka increases. This has been literally a win-win relationship. In 2006, which was the 20th anniversary of the launch of Gogo-no-Kocha, we took a step further and began to brand Sri Lanka as a production area of tea leaves. “I want to get a feeling of satisfaction smartly when I feel a little hungry in the midafternoon.” To meet this need, we developed ”KIRIN　Gogo-no-Kocha Special Double Tea Leaves Milk Tea “, which was launched in 2006. in the product name is the place in Sri Lanka where the tea leaves were produced. This is the first Gogo-no-Kocha product whose name and package bear the production area. Uva is located southeast of the central highlands in Sri Lanka and has long been famous for production of one of the world’s three branded tea varieties. At the time, however, only a small number of tea fans knew it in Japan. It was our first challenge to show the name of the production area. We believe that the success of this product has helped to raise awareness of Uva in Japan and contributed to the enhancement of the brand value of the production area. Kirin Sri Lanka Friendship Project started with gratitude Apart from temporary declines, the sales of Gogo-no-Kocha have continued to grow steadily. So, we would like to express our gratitude again to the tea farms in Sri Lanka that support the flavors loved by our customers. The late Mr. Takeshi Isobuchi, who was a leading authority on tea research in Japan, empathized with this thought and gave us ideas. Mr. Isobuchi, who had a deep relationship with Sri Lanka, told us that even in this modern age when all things are mechanized, tea cannot be made without people, and “Craftsmanship starts with human resource development.” In order to start with “human resource development,” the children who will bear the future of tea farms need to receive proper education. With this advice from Mr. Isobuchi in mind, the Kirin Library started in 2007 and continues to this day. In Sri Lanka, tea leaves are produced nationwide. Many of those regions, including Uva, which produces one of the world’s three branded tea variations, are rural areas. Unlike in urban areas, they have no classroom libraries or school libraries, which are found everywhere in Japan. Therefore, we began activities to donate good-quality books to elementary schools which children of people working for tea farms go to. In order to help children improve their academic abilities and envision their dreams for the future, we are donating one bookshelf and about 100 local books for each school, including stories, illustrated reference books, and maps we have selected based on requests from the schools. From 2007 to 2011, the first period of the program, we provided support to 12 schools. From 2012 to 2016, the second period, we extended support to 109 schools. In the third period from 2017 to 2022, we are continuing the activities　with the target of about 100 schools. When we started the Kirin Library in 2007, CSR (Corporate Social Responsibility) was gradually taking root in Japanese companies, but the term CSV was not yet known among the public. Building on these activities, we started support for the acquisition of Rainforest Alliance certification*3 to further strengthen relations with Sri Lanka, and launched the full-scale Kirin Sri Lanka Friendship Project. It has now evolved into an initiative that symbolizes Kirin’s CSV. Rainforest Alliance certification is a certification granted to farms that are certified to be practicing more sustainable farming while protecting nature and producers. Started providing training to support the creation of sustainable farms The 10th Conference of the Parties to the Convention on Biological Diversity (COP10) held in 2010 in Nagoya, Aichi Prefecture, was the catalyst behind our initiative to support the acquisition of Rainforest Alliance certification. Biodiversity will be lost unless we come up with feasible measures and take action. We as food companies are facing the frontline of such reality. This is what we learned there. Elavulated in 2012 Risk research of biodiversity Losing biodiversity also means losing raw materials for beverages. In addition, there have been many cases around the world where economic activities that disregarded the conservation of biodiversity led to impairment of brand value or boycott. Therefore, we conducted surveys from the perspective of deforestation risks and reputational risks. It was found that although risks for tea leaves were rated modest at the time of the surveys, any major problems in tea leaves or Sri Lanka were likely to mean risks in the production of Gogo-no-Kocha. What can be done to maintain the quality of Gogo-no-Kocha and to continue producing it? The answer was to reinforce the sustainability of raw material production, i.e. to support tea farms in Sri Lanka, where tea leaves are produced. After a series of discussions on how to support them, we came to the conclusion that we should support their acquisition of Rainforest Alliance certification. In Sri Lanka at that time, soon after the end of the civil war, the gap between the rich and the poor was so acute that only larger farms of a certain economic scale had obtained Rainforest Alliance certification. If we only procure certified tea leaves, we can appeal to the public that the raw materials of Gogo-no-Kocha are sustainable. This would also mean, however, the abandonment of farms that are unable to aim for sustainable agriculture due to lack of funds, which will not lead to improved sustainability of the production area as a whole. There are also risks arising from the limited number of suppliers. So, instead of purchasing tea leaves from certified farms, we decided to provide support so that more farms in Sri Lanka can obtain the certification. If the number of more sustainable farms is increased by supporting the acquisition of certification, Sri Lankan tea leaf production will become more sustainable, and we will be able to procure high-quality tea leaves for a longer period and in a more stable manner. In addition, farms will be able to develop business with other companies as well as with us by obtaining the certification. Just as the success of Gogo-no-Kocha increased import of Sri Lankan tea leaves, we expected that we could forge another win-win relationship. About 30% of tea farms will obtain the certification This is how support for the acquisition of Rainforest Alliance certification started in 2013. In order to encourage tea farms to become more serious about obtaining certification, we decided that the cost of the certification audit would be borne by the farms and we would support the training costs necessary to obtain certification. The actual training covers a wide variety of topics, including construction to build farms for stable harvests that prevent the outflow of good quality soil, landslides and other disasters caused by torrential rain; conservation activities to ensure the coexistence of farms and surrounding wildlife; environmentally friendly treatment of waste and wastewater; guidance on agricultural chemicals to maintain health and well-being of workers; and educational support for children who will bear the future of farms. A scene of training In 2018, we started supporting the acquisition of certification for small farms in addition to large ones. Because tea leaves harvested at small farms are also carried into factories in large farms for processing and shipment in bulk, we felt that true sustainability could not be achieved unless both large and small farms became sustainable. Progress of target Inpact on profitability of supporting the acquisition of Rainforest Alliance certification As of the end of 2020, eight years after the start of the program, 93 large tea farms in Sri Lanka had received the certification. This figure accounted for about 30% of tea farms that had obtained certification in Sri Lanka, and the increase in certified farms has contributed to an increase in both their revenue and salaries for people working for the farms. Currently, 789 small farms are working on training to obtain the certification, and we are working with the target that 10,000 small farms can start acquisition of certification at the end of 2025. We are also addressing new issues that have emerged from these activities. In a corner of tea farms in Sri Lanka, there is a place where springs called micro watersheds gush out. Though these are the headwaters of rivers flowing into coastal cities, dialogue with farm managers has revealed that while many places used for farming or grazing in high-altitude areas where Sri Lankan tea farms are located are in rough condition, the protection of water sources has made little progress due to the lack of a government budget. In 2018, therefore, we began activities to conserve water sources in tea farms, such as fencing off micro watersheds and educating local residents about the importance of protecting water sources. We will continue activities to improve the sustainability of tea farms that receive our support for acquisition of certification and their surrounding areas. Gogo-no-Kocha disseminates CSV to society With the cooperation of people in Sri Lanka, Gogo-no-Kocha has grown into the Kirin Group’s flagship brand 35 years after its launch. In Japan, it has grown into a product that has the greatest number of points of contact with customers regardless of generation. The Kirin Group’s flagship brand Gogo-no-Kocha also embodies our CSV activities. In 2013, we became the first Japanese company to establish a CSV Division and make a major shift toward CSV management. In addition to becoming a responsible alcohol producer, we have set out the following three agendas of CSV Purpose as guiding principles aimed at sustainable growth and creating value together with people across society: Health and Well-being, Community Engagement, and The Environment. Gogo-no-Kocha embodies all of them. Among them, the activity embodying Community Engagement and The Environment is the Kirin Sri Lanka Friendship Project. This activity consists of the Kirin Library, which provided an opportunity to support Sri Lanka, and the support for the acquisition of Rainforest Alliance certification, which builds the win-win relationship between tea farms and us, as introduced earlier. Gogo-no-Kocha is still in the middle of realizing true CSV. The further expansion of CSV and the further improvement of sustainability require the participation of consumers and customers. To this end, we would like as many people as possible to know about our activities embodied by Gogo-no-Kocha. Kirin Gogo-no-Kocha Straight Tea 250 ml LL Slim, which has been renewed and launched on August 3, 2021, is made from more than 90% Rainforest Alliance Certified tea leaves from Sri Lanka for the first time after 35 years of continuously using Sri Lankan tea leaves. The Rainforest Alliance certification seal is placed on the front of the package to raise awareness of our CSV activities and the certification system itself. In the renewal of our three standard products this spring, the production areas of tea leaves for straight, milk, and lemon tea were shown as Dimbula, Kandy, and Nuwara Eliya, respectively, on the label. We will extend the successful branding of Uva with Double Tea Leaves Milk Tea to other regions and contribute to the building of brand assets in Sri Lanka’s tea leaf producing areas. From economic impact to social impact ahead What value will our CSV activities through Gogo-no-Kocha create in society? Ryosuke Mizouchi, Senior Executive Officer of Kirin Holdings Company, Limited, says: “We are proud that our activities have enabled us to build sustainable win-win relationships with Sri Lanka. Through Gogo-no-Kocha, the brand value of Sri Lankan tea leaves will increase, Sri Lankan farms will become richer, and the Sri Lankan economy will develop. The brand assets of Gogo-no-Kocha, which uses select tea leaves with such high brand value, will be reinforced, and sales will also increase. What happens then? If the Kirin Group, which is reinforcing sustainability of raw material production areas, is growing while making a social impact, many other companies would start taking action following us. The same applies to protection of the natural environment. There are not many things we can do alone as a single company. Nevertheless, our activities can have a positive impact on nature and society by causing a stir in the business world. We want to contribute to a sustainable future through the Kirin Group’s flagship Gogo-no-Kocha brand.” Profile Ryosuke Mizouchi Mr. Mizouchi has been with Kirin group companies since 1982, mainly in marketing insight, international business, and corporate planning departments, and is currently a Senior Executive Officer of Kirin Holdings Company, Limited, overseeing the Creating Shared Value (CSV) function of the whole group. *Stated information as at the date it is made Value Creation Story Kirin Group is aiming to partner with society in achieving mutual growth byplacing CSV at the core of its management. We create social value and economic value by solving social issues through our business activities in the Group.Value Creation Model is our business model that amplifies the two values through a sustainable cycle of reinvesting the economic value in our drivers. 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