Ramping up our sustainability initiatives.

Total domestic demand for dairy products was approximately 12 million tons of raw milk equivalent, while domestic raw milk production was approximately 7.5 million tons, a difference of approximately 4.5 million tons. Our Dairy Ingredients and Cheese Business Division is responsible for importing and selling dairy ingredients, which are indispensable for bridging this gap in domestic supply and demand.
The domestic dairy products market is facing difficult prospects for future expansion due to the decline in the working-age population and the aging of the population combined with fewer children. In recent years though, health has become a global trend in the food industry and I think this health consciousness will be a tailwind for milk, which is considered  complete nutritional food. For example, we recognize that milk has a lot of potential for the future, especially since the rich protein content of milk is attracting increasing attention.
On the other hand, the global supply of raw milk is almost at a standstill due to climate change and other factors, and milk production is expected to decline in Japan as well, as the number of dairy farmers decreases. While these conditions in production and imports are a risk to Lacto Japan’s mission of securing the supply of dairy products for the Japanese market, we also see this as a major opportunity.


The global situation is greatly changing at a pace unimaginable in the past five or ten years, with climate change having a major impact on the dairy and livestock farming industries, the pandemic caused by the new type of coronavirus infection, and more recently, geopolitical risks such as the conflicts in Ukraine and the Middle East. Against this backdrop, we at Lacto Japan are actively engaged in sustainability initiatives throughout the Group.


Of these initiatives, making employees more aware of sustainability issues has been important for us, but recently there has been an increasing number of requests from our customers to solve sustainability-related issues, and this has become an integral part of our daily operations. We recognize that this is a very positive environmental change for our sustainability drive. Until now, suppliers mainly in Europe and Oceania have led the way when it comes to promoting sustainability initiatives such as clean energy and carbon neutrality. However, Japanese food manufacturers have been pushing ahead more with their efforts in recent years, and I feel that we will soon see consumers in Japan also choose products based on the sustainable merits of a company.


In order to realize our new management philosophy and long-term vision, we have established six materialities as ESG goals. I believe that it is important for each and every employee to see sustainability as a commercial opportunity and to apply it to their sales and other activities. This, I believe, is our greatest demand for the times we now live in.
It is also important to think through the social role that the Company, and we ourselves, play in our work. When establishing Lacto Japan, the founding members deeply considered and discussed the roles and functions we should play in the future. When we are immersed in our work every day, we can sometimes lose sight of our roles. In such a situation, I believe that if all employees ground themselves on our stated material issues, if we can all think about and reflect on the issues that matter to us, it will be of great significance in realizing sustainable growth not only for the Company and for employees as individuals, but also for society as a whole.
As a specific business activity, efforts are also being made to match suppliers that utilize clean energy with sustainability-conscious purchasers. Matching requires knowledge of carbon neutrality and clean energy, which helps to raise employee awareness and expand their knowledge. By steadily implementing such individual initiatives, we hope to accelerate our sustainability drive throughout the Company.
In terms of organization, we have established a Sustainability Promotion Task Team consisting of members from across the Company. Sustainability initiatives are spearheaded by the Task Team for implementation throughout the Group. The progress of individual initiatives is reported to the Executive Committee, and some matters are considered for discussion by the Board of Directors. 


Since assuming the position of President, I have continued to focus my energy on transforming the Company into one that can sustainably grow and develop in the future, and in my New Year's Message for 2020, I called on all employees to "aim to become a 100-year company.”
Some analysts believe that so-called “100-year companies” have the following three elements: continuous communication with the market and business partners, continuous self-improvement in response to the changing times while adhering to the Company's founding philosophy, and global business expansion. I believe that Lacto Japan is fully capable of achieving these elements.
At Lacto Japan, we will realize sustainable growth together with society and with our stakeholders by incorporating the six newly established materialities into specific activities, aiming to be a “100-year company” of the future.

Motohisa Miura

Lacto Japan Co., Ltd.