Summary

Yomeishu Seizo Co., Ltd., established in 1923, is a Japanese manufacturer of medicinal herbal liqueurs. The company manufactures and sells health-related products centered on its flagship product, *Yomeishu Herbal Liqueur*, which contains 14 types of medicinal herbs and provides solutions to various health risks. This product accounts for approximately 90% of total sales. Its business model emphasizes customer engagement and aims to build customer loyalty by offering experiential services through its directly operated commercial facility, “Kurasuwa.” The company’s operations are divided into the “Yomeishu-related business” and the “Kurasuwa-related business.” The latter has experienced rapid growth, recording a 46.4% year-on-year increase in sales in fiscal year 2023. Meanwhile, domestic sales of the flagship product have been sluggish due to population decline and intensifying competition. Future growth will require new product development and flexible responses to changing customer needs.

Under its medium-term management plan, the company aims to achieve an operating profit margin of 10% and an ROE of 4%, while promoting sustainability management. In recent performance, net sales for fiscal year 2025 are expected to decrease by ¥224 million year-on-year, particularly due to weak domestic sales of Yomeishu. However, the Kurasuwa-related business continues to grow. Financial indicators show a sluggish operating margin and highlight the need for stable cash flow. The shareholder return policy emphasizes stable dividends, and while an improvement in the dividend payout ratio is expected, flexible responses to changes in the economic environment will be necessary. Business risks include performance volatility, industry-specific risks, financial and managerial risks, technological innovation risks, overseas expansion risks, ESG-related risks, and natural disaster and geopolitical risks. Proper management of these risks is considered essential for sustainable growth. Yomeishu Seizo aims to achieve future growth through product development aligned with consumers’ health consciousness and initiatives toward sustainable management.

1.  Cumulative Performance Overview for Fiscal Year 2025

For fiscal year 2025 (April 2024–March 2025), Yomeishu Seizo reported cumulative net sales of ¥10,017 million, a decrease of ¥224 million compared to the previous fiscal year. Domestic sales of the flagship product, *Yomeishu Herbal Liqueur*, have been sluggish, particularly in the domestic market where the effects of a declining birthrate, aging population, and population decline are significant. Domestic sales are projected to fall to ¥6,410 million. Overseas sales also declined by 25.6% year-on-year, largely due to the closure of the Taiwan branch.

On the other hand, the Kurasuwa-related business has continued to grow, reaching ¥1,476 million in sales in fiscal year 2025, representing a 31.7% increase year-on-year. The opening of new stores and experiential facilities has attracted consumer interest and supported overall performance.

According to the income statement, with net sales of ¥10,017 million and cost of sales of ¥4,273 million, gross profit amounted to ¥5,743 million, and the gross profit margin declined to 57.3%. Selling, general and administrative expenses totaled ¥5,615 million, resulting in operating profit of ¥128 million and an operating margin of 1.3%, reflecting weak profitability. Ordinary profit declined to ¥626 million, and net income for the period fell to ¥679 million, highlighting the need for earnings improvement measures.

On the balance sheet, total assets decreased by ¥898 million to ¥53,518 million. The decline in current assets has raised concerns regarding short-term liquidity. In the cash flow statement, cash flow from operating activities amounted to ¥473 million, while cash flow from investing activities decreased by ¥1,194 million and cash flow from financing activities declined by ¥623 million. Key performance indicators show ROE falling to 1.5%, with continued weakness in operating margins. To achieve sustainable growth, the company needs to build a new business foundation, adopt segment-specific approaches, and implement company-wide strategic innovation.

2. Earnings Forecast for Fiscal Year 2025

The earnings forecast for fiscal year 2025 projects net sales of ¥10,017 million, operating profit of ¥128 million, ordinary profit of ¥626 million, and net income attributable to owners of the parent of ¥679 million, representing year-on-year declines. Domestic sales of the flagship product, *Yomeishu Herbal Liqueur*, are expected to decrease to ¥6,410 million due to demographic changes such as population decline and aging, as well as weakened consumer purchasing appetite.

Meanwhile, the Kurasuwa-related business is expected to continue growing, achieving ¥1,476 million in sales in fiscal year 2025, up 31.7% year-on-year. Strong performance in experiential facilities and health-related product sales is expected to support overall results.

Cost of sales is projected to reach ¥4,273 million, with the gross profit margin declining to 57.3% due to rising raw material and manufacturing costs. The operating margin is expected to remain low at 1.3%, making a review of selling, general and administrative expenses necessary. Total assets are projected to decline to ¥53,518 million, raising concerns over short-term liquidity due to reduced current assets. Cash flow from operating activities is expected to decrease to ¥473 million, and cash flow from investing activities is projected to decline by ¥1,194 million. ROE is forecast to fall to 1.5%, underscoring the urgent need to improve the earnings structure. The company must implement strategic initiatives to achieve sustainable growth amid intensifying competition and a changing market environment.

3. Medium- to Long-Term Growth Strategy

Yomeishu Seizo has formulated a medium-term management plan covering fiscal years 2022 to 2027, with the core strategy of “growth investment and establishment of a sustainable growth foundation for the next 100 years.” The company has set specific targets of achieving an operating profit margin of 10% and an ROE of 4%. It plans to strengthen sales of its flagship product, *Yomeishu Herbal Liqueur*, and further develop the Kurasuwa-related business.

The plan prioritizes customer orientation, strengthens marketing strategies, and emphasizes product development while promoting sustainability management in response to social changes. In particular, the expansion of the experiential facility “Kurasuwa no Mori” is positioned as a strategic initiative not only to increase visitor numbers but also to enhance brand recognition.

In research and development, the company aims to develop functional foods and expand its product lineup to meet consumers’ growing health consciousness. New products targeting younger and middle-aged to senior consumers are expected to be key drivers of revenue growth. With advancing digitalization, efforts are being made to improve customer management and optimize online sales channels, thereby enhancing overall corporate performance.

The company is also exploring overseas expansion, aiming to increase sales in Asian markets where Japanese food and health-related beverages are gaining popularity. Through diversification of new businesses and strengthening the profitability of existing operations, Yomeishu Seizo seeks to achieve sustainable growth. The company has established clear KPIs under its medium-term plan to measure progress, with a particular focus on improving profitability in existing businesses. Promoting sustainability management is also one of its KPIs, with initiatives such as environmental consideration and community contribution aimed at enhancing corporate value. For investors, these indicators demonstrate the company’s growth potential and commitment to social responsibility, contributing to long-term credibility.

To achieve sustainable growth in a fluctuating market environment, Yomeishu Seizo must continue to emphasize risk management and maintain the agility to respond swiftly to changes in the competitive landscape and evolving consumer needs.

・In fiscal year 2025, Yomeishu Seizo recorded cumulative net sales of ¥10,017 million, down ¥224 million year-on-year. While domestic sales of its flagship product and overseas sales declined, the Kurasuwa-related business grew, highlighting the need for earnings improvement measures.

・The fiscal year 2025 outlook forecasts a year-on-year decline in net sales due to weak domestic sales of the flagship product, while the Kurasuwa-related business is expected to continue growing and support overall performance.

・Under its medium-term management plan (2022–2027), Yomeishu Seizo aims to achieve an operating profit margin of 10% and an ROE of 4%, pursuing sustainable growth through strengthening flagship product sales, developing new products, promoting digitalization, and expanding into overseas markets.

Business Overview

1. Overview of the Business Model

Yomeishu Seizo Co., Ltd., established in 1923, is a Japanese manufacturer of medicinal herbal liqueurs. The company primarily manufactures and sells health-related products centered on *Yomeishu Herbal Liqueur*, which is intended to promote general health and vitality. Its flagship product, *Yomeishu Herbal Liqueur*, contains 14 types of medicinal herbs and offers appealing solutions to health concerns such as physical fatigue, sensitivity to cold, and gastrointestinal weakness. This product accounts for approximately 90% of total sales and enjoys strong support from consumers backed by solid brand power.

The company’s business model is characterized by its emphasis on customer engagement beyond merely supplying products. It operates a directly managed commercial facility called “Kurasuwa,” which goes beyond traditional retail by strengthening customer touchpoints through experiential services and health-related education. Through these initiatives, the company aims to build long-term customer loyalty.

In addition, Yomeishu Seizo places strong emphasis on sustainability-oriented management, practicing coexistence with local communities and environmental consideration. These efforts align with the values of modern consumers and contribute to enhancing the company’s image and profitability.

From an investor’s perspective, the company’s business model provides a foundation for stable revenue generation and demonstrates flexibility in responding to market needs. In particular, the development of experiential facilities has the potential to become a new revenue source and is therefore a noteworthy point.

2. Main Business Segments

Yomeishu Seizo’s operations are primarily divided into two segments: the “Yomeishu-related business” and the “Kurasuwa-related business.”

The Yomeishu-related business segment focuses on the manufacture and sale of *Yomeishu Herbal Liqueur* and related products. In fiscal year 2023, this segment recorded sales of approximately ¥87.5 billion. While strong demand is expected particularly from middle-aged and elderly consumers, the segment faces challenges such as population decline, intensifying competition, and changes in consumer behavior driven by rising prices.

In contrast, the Kurasuwa-related business has experienced rapid growth. In fiscal year 2023, it achieved sales of ¥7.68 billion, representing a 46.4% year-on-year increase. Through experiential commercial facilities and the sale of health-related products, this segment seeks to further deepen relationships with customers, serving as a new driver of growth.

Although the two segments pursue different market approaches based on their respective strategies, synergies between them are expected. In particular, strengthening direct channels through the Kurasuwa-related business is anticipated to increase direct customer contact and contribute to higher sales in the Yomeishu-related business.

3. Market Trends and Competitive Advantages

Yomeishu Seizo maintains a strong competitive advantage in Japan’s pharmaceutical and health beverage market. In particular, *Yomeishu Herbal Liqueur*, positioned as a medicinal product, is manufactured under strict quality control standards, ensuring high quality and earning consumer trust. Its use of proprietary medicinal herbs provides unique appeal and enables the company to address diverse consumer health needs.

However, the market is highly competitive with many rival companies. Yomeishu Seizo differentiates itself not only through quality but also by emphasizing customer experience. Experiential sales at Kurasuwa stores and contributions to local communities enhance the company’s brand image.

Furthermore, acquiring new customers through digital marketing and strengthening online channels are positioned as key strategies. As consumers increasingly gather information and make purchases online, the expansion of e-commerce has become an essential element of the company’s business model.

For investors, a key point of interest is whether Yomeishu Seizo’s competitive advantages can contribute to long-term growth. In particular, new product development in response to rising health consciousness is expected to significantly influence corporate growth.

4. Future Challenges and Opportunities

Yomeishu Seizo faces both challenges and opportunities for future growth. The opening of the experiential facility “Kurasuwa no Mori” is expected to contribute significantly to growth by attracting new visitors and deepening relationships with customers. In addition, the development of new products tailored to increasingly diverse customer needs is required, particularly with strengthened marketing initiatives targeting younger consumers.

The company must also address rising raw material costs and supply instability, incorporating sustainable sourcing into its medium-term vision. This will be an important step in balancing corporate growth with social responsibility.

Moreover, projected declines in sales from fiscal year 2024 onward may have an impact, making it essential to maintain target operating profit margins and ROE to secure sustainable profitability. In this challenging external environment, the company must deepen its existing businesses while simultaneously building new business foundations.

To achieve future growth, Yomeishu Seizo must review its existing strategies while flexibly responding to emerging market needs. To survive in an increasingly competitive environment, enhancing corporate value and strengthening its product lineup to meet customer expectations will be indispensable.

5. Conclusion

Yomeishu Seizo Co., Ltd. is a company with strong competitiveness in the medicinal herbal liqueur market, offering a diverse range of health-related products centered on its flagship product, *Yomeishu Herbal Liqueur*. The provision of experiential services through its directly operated facility, Kurasuwa, represents a new growth driver, supported by a flexible management strategy that adapts to market changes.

Looking ahead, further growth will depend on the development of new products and contributions to local communities. By emphasizing trust-based relationships with customers and responding to changes in the economic environment, Yomeishu Seizo is expected to pursue sustainable growth.

Performance Trends

1. Recent Performance Overview

Yomeishu Seizo Co., Ltd. has established a strong position in the medicinal herbal liqueur and health food sectors, and its recent performance trends are of significant interest to investors. In fiscal year 2025, the company recorded net sales of ¥10,017 million, a decrease of ¥224 million compared to the same period of the previous year. This decline was mainly attributable to sluggish domestic sales of its flagship product, *Yomeishu Herbal Liqueur*. In the domestic market, the effects of a declining birthrate, an aging population, and overall population decline are expected to reduce sales of Yomeishu to ¥6,410 million. Overseas sales also fell by 25.6% year-on-year, largely due to the closure of the Taiwan branch.

Meanwhile, the Kurasuwa-related business has continued to grow, achieving sales of ¥1,476 million in fiscal year 2025, representing a 31.7% increase year-on-year. The opening of new stores and experiential facilities has attracted consumer interest and supported overall performance. Thus, while Yomeishu Seizo faces challenges in its existing markets, expectations are high for growth in its newer business segments.

2.  Analysis of the Income Statement

An analysis of Yomeishu Seizo’s income statement clearly highlights recent fluctuations in performance. In fiscal year 2025, net sales amounted to ¥10,017 million, and cost of sales reached ¥4,273 million. Gross profit totaled ¥5,743 million, with the gross profit margin declining to 57.3%. The increase in cost of sales is primarily attributable to rising raw material and manufacturing costs.

Selling, general and administrative expenses totaled ¥5,615 million, showing a slight decrease; however, overall profitability remained under pressure. Operating profit stood at ¥128 million, with an operating margin of 1.3%, indicating the need to review sales costs and advertising expenditures. Ordinary profit declined to ¥626 million, and net income for the period fell to ¥679 million. To reverse this trend, continued measures to improve profitability are required. From a strategic standpoint, strengthening cost control and introducing more efficient marketing methods are urgent priorities.

3. Analysis of the Balance Sheet

As of the end of fiscal year 2023, Yomeishu Seizo’s balance sheet showed total assets of ¥53,518 million, a decrease of ¥898 million compared to the previous year. This decline was influenced in part by the valuation of investment securities, warranting careful attention to the composition of assets. Current assets decreased due to a reduction in cash and deposits, raising concerns about short-term liquidity.

Although the equity ratio remains high at 86.1%, declines in retained earnings and the valuation of securities may affect the company’s earnings structure. Maintaining stable financing through appropriate management of current and non-current liabilities is essential. Furthermore, it is important to consider how new capital investment initiatives align with the company’s growth strategy and capital policy.

4. Analysis of the Cash Flow Statement

In the cash flow statement, cash flow from operating activities for fiscal year 2025 amounted to ¥473 million, representing a year-on-year decrease. This decline was attributable to factors such as profit before tax, consumption tax receivables, and corporate tax payments, and it is important to assess whether the company’s core operating base remains stable.

Cash flow from investing activities is projected to decrease by ¥1,194 million in fiscal year 2025. While new capital investments are being made, continued cash outflows raise concerns. Cash flow from financing activities also declined by ¥623 million, mainly due to dividend payments. Although a stable dividend policy is being maintained, attention must be paid to the narrowing margin of liquidity.

5. Analysis of Performance Indicators

Key performance indicators such as ROE (Return on Equity) and ROA (Return on Assets) warrant close attention. In fiscal year 2025, ROE declined to 1.5%, reflecting net income of ¥679 million. ROA has also shown a lack of stability. EBITDA, which stood at ¥1,032 million in fiscal year 2025, suggests the need for the company to further strengthen its business foundation through investment activities.

In particular, with operating margins continuing to stagnate, it is necessary to reassess marketing strategies and brand direction. To succeed, the company must expand its product portfolio and adopt flexible strategies that respond to consumer needs. Management must therefore focus on improving the earnings structure while enhancing operational efficiency.

For Yomeishu Seizo Co., Ltd. to achieve sustainable growth, it is essential to build a new business foundation. The company must pursue differentiated approaches for each segment while simultaneously innovating its overall corporate strategy. From these perspectives, close attention should be paid to its future business strategies.

Medium-Term Management Plan / Growth Strategy

1. Overview of the Medium-Term Management Plan

Yomeishu Seizo Co., Ltd. has formulated a five-year medium-term management plan covering fiscal years 2022 to 2027, aiming to achieve sustainable growth and enhance corporate value. The core strategy of this plan is “growth investment and the establishment of a sustainable growth foundation for the next 100 years.” Key targets include an operating profit margin of 10% and an ROE (Return on Equity) of 4%, with particular emphasis on strengthening sales of *Yomeishu Herbal Liqueur* and deepening the Kurasuwa-related business.

This medium-term plan prioritizes customer orientation, strengthens marketing strategies, and emphasizes product development. It also promotes sustainability management in response to social changes, highlighting coexistence with local communities and reduction of environmental impact. Although certain revisions were made due to uncertainties in the economic environment, the plan aims to establish a solid growth foundation through its core initiatives. As a result, the company is expected to enhance its competitiveness by overcoming domestic market saturation and securing new revenue sources.

For investors, this medium-term management plan serves as an important document signaling the company’s sustainable growth potential. Understanding the quantitative targets and strategic initiatives provides a basis for evaluating the company’s future prospects. Whether the company’s direction and strategies align with customer needs will directly affect future performance, making these considerations essential for investment decisions.

2. Investment Plan and Key Initiatives

Based on its medium-term management plan, Yomeishu Seizo is focusing on capital investment and research and development. A distinctive feature of its approach is “ambidextrous management,” which simultaneously deepens existing businesses while developing new ones.

In terms of capital investment, the company plans renewal investments aimed at improving manufacturing efficiency and enhancing quality. This is intended to establish a production system capable of flexibly responding to customer quality requirements and market needs. Furthermore, the expansion of the experiential facility “Kurasuwa no Mori” is positioned as a strategic initiative not only to increase visitor traffic but also to enhance brand recognition. This facility serves not merely as a sales outlet but as a key base for deepening customer engagement.

In research and development, the company is expected to develop functional foods that meet growing consumer health consciousness and expand its new product lineup. In particular, new products targeting younger and middle-aged to senior consumers will be key drivers of revenue growth. With ongoing digitalization, efforts are also being made to improve customer management and optimize online sales channels, thereby enhancing overall corporate performance.

Such investment plans form a critical pillar supporting sustainable growth. Investors are expected to assess how these initiatives contribute to short-term performance and how they strengthen long-term competitiveness.

3. New Businesses and Segment-Specific Growth Strategies

Yomeishu Seizo is implementing a growth strategy that combines the launch of new businesses with the strengthening of existing operations. Of particular note is the direct-channel business centered on the “Kurasuwa” brand. This business model leverages physical retail stores to build strong customer relationships, and the customer acquisition strategy centered on the experiential facility “Kurasuwa no Mori” has the potential to deliver positive results.

Within existing operations, enhancing the profitability of the Yomeishu-related business remains a key challenge. Specifically, the company aims to restore sales through strengthened advertising activities and optimized distribution. It is also expanding its product portfolio to diversify offerings in response to health-conscious market demand.

In addition, the company is considering expansion into overseas markets, aiming to increase sales in Asian regions where Japanese food and health beverages are gaining popularity. Such international expansion is expected to diversify revenue sources and accelerate overall corporate growth.

Through diversification of new businesses and strengthening the profitability of existing ones, Yomeishu Seizo seeks to achieve sustainable growth. If successful, this strategy will further reinforce the company’s position as a trusted brand and create attractive investment opportunities.

4. Results, Expected Effects, and KPIs

Under the medium-term management plan, Yomeishu Seizo has established clear KPIs and a framework to measure results. Key indicators include an operating profit margin of 10% and an ROE of 4%, with concrete initiatives underway to achieve these targets.

By focusing particularly on strengthening profitability in existing businesses, the company aims to reinforce its business foundation and achieve stable performance. These initiatives include enhanced marketing strategies and direct promotional activities that connect with customers, leading to improved product recognition and new customer acquisition. If the Kurasuwa-related business succeeds as a new growth driver, additional revenue opportunities are expected to emerge.

Promoting sustainability management is also included as a KPI, with goals of contributing to corporate value through environmental consideration and community engagement. For investors, these indicators demonstrate the company’s growth potential and commitment to social responsibility, thereby enhancing long-term credibility.

By monitoring progress against these KPIs, investors can assess the likelihood of sustainable growth. Steady progress under the plan is expected to improve overall corporate performance and ultimately generate returns for investors.

5. Approach to Risk Factors

Yomeishu Seizo places strong emphasis on risk management within its medium-term management plan. To mitigate the impact of changes in the competitive environment, economic downturns, and fluctuations in consumer needs, the company must maintain the ability to respond swiftly. To address these risks, it continuously monitors and analyzes market trends.

In particular, product quality control and supply chain stability are directly linked to competitiveness. As risk mitigation measures, the company plans to diversify material procurement sources and introduce alternatives, strengthening resilience against market volatility. Investment in human capital is also considered part of risk management, with securing and developing talented personnel seen as key to building the company’s future.

A sincere and proactive approach to these risk factors is an important evaluation criterion for investors. A company’s ability to recognize potential risks and implement concrete countermeasures contributes to long-term stability and enhanced trust.

To achieve sustainable growth in a fluctuating market environment, Yomeishu Seizo remains committed to continuously addressing these risks and enhancing corporate value. These efforts serve as an important indicator of the company’s long-term stability for investors.

By practicing transparent information disclosure while considering its overall policies and strategies, Yomeishu Seizo aims to build strong relationships of trust with investors and realize sustainable growth.

News & Topics

1. Growth in the Alcoholic Beverage and Food Business

In the most recent fiscal period, Yomeishu Seizo Co., Ltd. recorded sales of ¥465 million in its alcoholic beverage and food business, representing a 6.7% year-on-year increase. A key driver of strong sales was the launch of new products, particularly *Craft Gin*, *Herbal Liqueurs*, *Yomeishu Seizo Kuromoji Throat Lozenges*, and *Goyo-gayu (Five-Grain Porridge)*. In addition, the company expanded proposals to mass retailers and foodservice operators and strengthened its e-commerce initiatives, successfully capturing inbound demand.

Although market competition remains intense, the company is reviewing its marketing strategies while promoting product diversification. As sales of products such as *Fruit and Herbal Liqueurs* decline, optimizing the product portfolio has become a key challenge going forward. It will be important to monitor whether this growth can be sustained over the long term.

2. Challenges in Overseas Markets and New Initiatives

In recent years, Yomeishu Seizo’s overseas business has faced challenging conditions, with sales declining to ¥86 million, down 36.3% year-on-year. The primary factor behind this decrease was a reduction in Yomeishu exports. To counter this trend, the company has implemented demand-stimulation measures, including region-specific television commercials and web advertising campaigns.

Efforts to develop new sales channels, such as product tasting events in Singapore, are also underway, raising expectations for the effectiveness of these marketing initiatives. Recovery in overseas markets is expected to play a key role in the company’s long-term growth, making further refinement of its strategy an urgent priority. Close attention should be paid to whether these initiatives will translate into tangible results.

3. Success of “Kurasuwa no Mori” and Collaborative Events

“Kurasuwa no Mori,” an experiential commercial facility operated by Yomeishu Seizo, celebrated its first anniversary following its grand opening. Commemorative events and customer-attraction initiatives proved successful, generating positive spillover effects at three stores in Tokyo. Through new product launches and product showcases at the facility, the company has enhanced communication with customers.

In addition, the mail-order division introduced new products, contributing to total sales of ¥768 million, up 46.4% year-on-year. Experiential events have strengthened engagement with consumers, particularly through sales strategies centered on themes such as “fatigue recovery” and “health consciousness.” As part of its branding strategy, further initiatives in this area are highly anticipated.

4. Promotional Activities and Brand Communication

Yomeishu Seizo has intensified its promotional efforts, particularly targeting the winter season. A new television commercial titled “Jiwa~tto Fuyu no Yomeishu” (Gently Warming Winter Yomeishu) began airing on November 9. This campaign aims to acquire new customer segments and is integrated with broader efforts to expand direct consumer touchpoints.

At the same time, initiatives such as the renovation of factory tour facilities and the launch of experiential pop-up stores have been strengthened. These efforts incorporate direct consumer feedback into product development, contributing to enhanced brand value and deeper customer relationships. The extent to which these promotional activities will impact future sales remains a key point of interest.

5. New Product Development and Featured Products

A notable new product, *Yawaragi Yoku-Yojo*, is scheduled for release on May 16, 2025. Designed to enhance the warming effects of bathing through the power of botanical ingredients, the product contains active components such as dipotassium glycyrrhizinate and rice germ oil, aiming to meet the needs of health-conscious consumers.

Following trial sales, the company plans to optimize its sales strategy based on consumer feedback. In today’s environment of rising health awareness, appropriate targeting is expected to contribute to revenue growth, and the product’s success is highly anticipated.

6. Future Outlook and Corporate Strategy

Under its medium-term management plan covering April 2022 to March 2027, Yomeishu Seizo is promoting ambidextrous management while securing profitability and pursuing growth investments. To respond to evolving consumer health needs and increasingly diverse lifestyles, the company must continue rebranding efforts and developing new products.

In addition, it is strengthening sustainability management, with a clear commitment to reducing environmental impact and coexisting with local communities. Establishing a diversified revenue base over the long term will require bold execution of corporate strategies and flexible decision-making by management.

7. Leveraging Diverse Talent in Growth Strategy

Yomeishu Seizo places strong emphasis on utilizing diverse human resources, particularly by promoting diversity-focused talent development. By fostering collaboration among individuals with varied backgrounds, the company seeks to generate new ideas and approaches that contribute to high-quality product development.

The company has also set a goal of increasing the proportion of women in management positions by 2025 and is working to create a supportive and inclusive work environment. Such talent strategies are expected to drive overall corporate growth and strengthen long-term competitiveness.

Through strategic product development aligned with rising health consciousness and a commitment to sustainable management, Yomeishu Seizo Co., Ltd. is well positioned for future growth. Its ability to respond flexibly to changing market needs and enhance corporate value will be critical. As market trends continue to evolve, the company appears to be laying the groundwork for the next stage of development.

Company Overview

1. Basic Corporate Information

Yomeishu Seizo Co., Ltd. (YOMEISHU SEIZO CO., LTD.) is a manufacturer of medicinal herbal liqueurs headquartered in Shibuya, Tokyo. Established in 1923, the company markets *Yomeishu*, a flagship product with over 300 years of tradition in Japan’s health beverage market. Mr. Hideo Tanaka serves as President and Representative Director, and the company emphasizes transparency and efficiency in its management.

In addition to *Yomeishu Herbal Liqueur*, the company offers a diverse product lineup including health liqueurs, craft gin, seasonings, and health foods. Recently, to strengthen its community-based business model, the company has planned the opening of a new commercial facility, “Kurasuwa no Mori,” in 2024.

In response to growing health consciousness both domestically and internationally, Yomeishu Seizo continues to review its product strategies to meet increasingly diverse consumer needs. The capital and business alliance with Taisho Pharmaceutical Holdings is expected to be dissolved in 2025, after which the company is anticipated to pursue an independent management strategy. Furthermore, it is advancing initiatives focused on community contribution and sustainable management, aiming for long-term growth.

2. Business Activities and Structure

Yomeishu Seizo’s operations are primarily divided into two segments: the Yomeishu-related business and the business related to its directly operated commercial facility, “Kurasuwa.”

Its flagship product, *Yomeishu Herbal Liqueur*, is known for its production method of soaking 14 types of medicinal herbs in a base liquor and has received high acclaim from consumers. The product is said to address health concerns such as physical fatigue, gastrointestinal weakness, sensitivity to cold, and poor complexion, and accounts for approximately 90% of total sales.

In addition, the company is strengthening its mail-order business and other health-related product offerings to enhance product diversity. In light of recent consumer trends, it is required to develop new products that meet the growing demand for healthcare and supplements. Continued innovation will be essential to maintaining a competitive advantage.

While promoting business diversification, Yomeishu Seizo is pursuing a strategy of enhancing brand value through direct engagement with consumers. By leveraging its core strengths, the company aims to secure sustainable revenue growth.

3. Organizational Structure and Management

Yomeishu Seizo’s organizational structure is supported by a management system based on clearly defined roles and responsibilities. President and Representative Director Hideo Tanaka brings extensive experience and leadership perspective, while executives with specialized expertise oversee each business division. This structure is essential for efficiently advancing each segment, with departments such as Corporate Administration, Corporate Planning, and Human Resources working in coordination to ensure operational transparency and efficiency.

The division into two segments—Yomeishu-related and Kurasuwa-related businesses—enables the execution of strategies tailored to the characteristics of each area. The company also places emphasis on enhancing employee engagement by improving working conditions and promoting diversity. Creating an environment in which employees can perform at their best is considered one of Yomeishu Seizo’s key strengths.

To continue adapting to a changing market environment, further enhancement of the organizational structure will likely be required.

4. History and Key Milestones

Yomeishu Seizo’s history dates back to its establishment in 1923, inheriting a Yomeishu business tradition that has continued for over 300 years in the Ina region of Shinshu. In 1955, the company was listed on the Tokyo Stock Exchange, enhancing corporate transparency and expanding nationwide sales and operational bases.

In recent years, notable initiatives include its transition to the Prime Market and the opening of the new experiential facility “Kurasuwa no Mori,” strengthening its community-based business model. These efforts aim to increase consumer touchpoints and enhance brand value.

The capital alliance with Taisho Pharmaceutical, which began in 2006, contributed to performance improvements but is scheduled to end in 2025, drawing attention to the company’s future independent management. These milestones demonstrate Yomeishu Seizo’s ability to adapt to changing times while continuing to grow, and its recent initiatives are viewed as strategic steps toward the future.

5. ESG and Sustainability Initiatives

Amid growing emphasis on corporate social responsibility (CSR) and sustainability, Yomeishu Seizo promotes a management policy that respects diversity. Advancing human rights and diversity initiatives is considered fundamental to long-term growth and building trust both internally and externally. In particular, the company is working to reform its organizational culture, including increasing the proportion of female employees.

Its commitment to the Sustainable Development Goals (SDGs) is also noteworthy. The company promotes environmental consideration and health-oriented management, aiming to gain support from consumers and stakeholders. These initiatives are expected not only to enhance brand value but also to contribute to long-term economic benefits.

To achieve sustainable growth, environmental measures and attention to health and safety are indispensable, and their importance will continue to grow. For investors, how the company addresses these issues may serve as a key evaluation criterion.

6. Geographic Expansion and Market Strategy

Yomeishu Seizo is looking beyond the domestic market to overseas expansion. In particular, market expansion in Asia and North America is expected to play an important role in future growth. While health consciousness continues to rise in Japan, similar demand exists in overseas markets, requiring strategic engagement.

To meet consumer health needs, the company must introduce products tailored to local market acceptance and implement appropriate marketing strategies. Strategic geographic expansion will therefore be a crucial factor in long-term growth.

Strengthening market strategies will require building local partnerships and developing products suited to cultural and regional characteristics. This presents new challenges for Yomeishu Seizo but also opportunities to maintain sustainability and enhance competitiveness.

7. Conclusion and Future Outlook

Yomeishu Seizo Co., Ltd. is a company backed by a long history of trust and a product lineup rooted in health consciousness. By strengthening its community-based business model and advancing initiatives such as new commercial facilities and its medium-term management plan, further growth is anticipated.

However, the company also faces risks such as intensifying competition and economic fluctuations both domestically and internationally. Management must maintain a flexible and strategic stance to pursue sustainable growth. For investors, it is important to monitor not only the company’s financial condition and growth potential but also management’s vision and commitment to social responsibility.

Attention will continue to focus on how Yomeishu Seizo confronts these challenges and strives to achieve sustainable growth in the years ahead.

Shareholder Returns

1. Dividend Policy and History

Yomeishu Seizo Co., Ltd. adopts a dividend policy that emphasizes appropriate returns to shareholders while maintaining economic flexibility in response to its management strategy and market conditions. In recent years, “sustainable growth” and “enhancement of shareholder value” have become central themes in its corporate strategy.

The company has a track record of maintaining stable dividends. Since the 2020s, however, it has faced a challenging market environment, including a declining and aging population and rising raw material costs. As a result, dividend decisions are made with careful consideration of business performance and cash flow, requiring a flexible approach. From 2008 to 2023, dividends generally trended upward. Notably, in fiscal 2022, the company paid a special dividend to commemorate its 100th anniversary, thereby strengthening shareholder returns. Maintaining a stable earnings base is regarded as a key element in meeting shareholder expectations.

The dividend payout ratio fluctuates in line with profit levels, but in recent years stable operating income and secure cash flow have supported consistent dividend payments. In fiscal 2023, the payout ratio improved compared with the previous year, reflecting the company’s prioritization of shareholder returns. Looking ahead, the planned dissolution of the capital and business alliance with Taisho Pharmaceutical Holdings in 2025 warrants attention, as it may influence future dividend policy. Under a new management environment, alignment between investment strategy and dividend policy will be increasingly important.

Overall, Yomeishu Seizo’s dividend policy is closely tied to its growth strategy, and based on past performance and future developments, it is expected to continue delivering flexible and sustainable shareholder returns.

2. Share Buybacks and Their Impact

Share buybacks are an important measure for enhancing shareholder value at Yomeishu Seizo. As with many companies, buybacks function as a direct means of returning profits to shareholders. By acquiring its own shares from the market, the company aims to support its share price and prevent dilution, thereby contributing to stock price stability.

In recent years, the company has conducted share buybacks, notably in fiscal 2021, supported by signs of business recovery. The fiscal 2022 cash flow statement recorded ¥654 million in cash flow from operating activities, indicating a stable financial base for shareholder return initiatives. However, caution is necessary: if business performance becomes unstable, insufficient funds could constrain buybacks, and excessive shareholder returns could limit future growth opportunities.

The company seeks to enhance its equity ratio while conducting appropriate buybacks to strengthen shareholder confidence and demonstrate growth potential. Within its medium-term management plan, the establishment of a new business foundation is underway, and share buybacks are positioned as part of this broader strategy. As such, buybacks remain an important tool for promoting shareholder returns, and strategic communication will be essential as the company pursues sustainable management.

Through these efforts, Yomeishu Seizo is expected to actively utilize share buybacks while maintaining a medium- to long-term growth perspective and fostering strong relationships with shareholders.

3. Total Return Ratio: Current Status and Evaluation

Yomeishu Seizo considers its total return ratio a key indicator in implementing strategic shareholder returns. This ratio represents the percentage of net income returned to shareholders and is calculated based on the combined total of dividends and share buybacks. It allows investors to assess the company’s commitment to shareholder returns and form expectations about future performance.

Over the past several years, the company’s total return ratio has shown a steady recovery trend, with improvement observed in fiscal 2023 compared with the previous year. As performance improved, the company demonstrated its commitment to returning a portion of profits to shareholders, contributing to higher shareholder satisfaction. In addition, enhanced returns during special occasions—such as the special dividend in fiscal 2022—have further strengthened trust with shareholders.

Looking ahead, maintaining stable returns while balancing investments in new businesses will be essential. Given potential fluctuations in economic conditions and market trends, both short-term responsiveness and long-term perspective are indispensable. Shareholder returns should not be viewed solely as a pursuit of yield but as part of a broader strategy aimed at sustainable corporate growth. Continued commitment to this perspective is strongly anticipated.

4. Financial Soundness and Its Impact

The company’s financial health plays a critical role in sustaining shareholder return policies. Yomeishu Seizo places particular emphasis on stable cash flow, with cash flow from operating activities amounting to ¥654 million, reflecting financial stability. This solid foundation enables the company to invest in new businesses while maintaining shareholder returns.

At the same time, cash outflows from investing and financing activities cannot be overlooked. Careful selection of investment targets and prudent capital management are essential. As the company seeks new growth opportunities, it must avoid overemphasizing short-term shareholder returns at the expense of long-term profitability and sustainable growth. A well-balanced strategy is therefore required.

Moreover, economic corrections or shifts in market conditions could have significant impacts, making it essential to maintain stable operations even during periods of uncertainty. Through responsible financial management, Yomeishu Seizo can continue to earn shareholder trust.

5. Medium- to Long-Term Policy and Sustainable Shareholder Returns

Under its medium-term management plan, Yomeishu Seizo aims to realize sustainable shareholder returns while strategically expanding new businesses and enhancing market competitiveness. Specifically, for the period from fiscal 2022 to fiscal 2027, the company has set a target dividend payout ratio of 60%, signaling its intention to provide stable shareholder returns. This approach closely links growth strategy with shareholder returns and forms a foundation for enhancing long-term corporate value.

In addition, the company emphasizes dialogue with investors and transparent communication. By providing sufficient information regarding management policies and financial conditions, it can deepen shareholder trust and foster long-term relationships. Shareholder return initiatives are thus an essential component of building strong ties with investors.

In this way, Yomeishu Seizo’s shareholder return policy is expected to continue evolving with a focus on sustainability, aligning corporate social responsibility with long-term objectives.

Amid a changing market environment, attention will focus on the effectiveness and sustainability of these shareholder return policies. In particular, how capital policy and dividend policy adapt to the new management environment—and how the company meets shareholder expectations—will be key points going forward.

Strategic and sustainable shareholder return initiatives serve as an important bridge between corporate growth and shareholder trust, delivering tangible benefits to both. Investors are encouraged to closely monitor future developments and maintain a strong, engaged relationship with the company.

Business Risks

1. Factors Causing Fluctuations in Business Performance

Yomeishu Seizo Co., Ltd.’s business performance is affected by a variety of internal and external factors. An unstable economic environment and changes in consumer needs are among the primary influences, particularly given the company’s high dependence on its core product, *Medicinal Yomeishu*. In fact, this product accounts for approximately 90% of total sales. As a result, economic downturns and population decline in Japan are likely to have a direct impact on performance. While health consciousness is increasing in Japan’s aging society, the shrinking target customer base that supports sales presents a significant challenge. For example, during periods of economic deterioration, reduced consumer purchasing power may directly lead to declining sales.

Increased competition and product differentiation are also major factors affecting performance. As the number of health-oriented products grows and consumer choices expand, maintaining market share is becoming increasingly difficult. In addition, product quality issues could significantly affect results. As a quasi-pharmaceutical product, Yomeishu is subject to strict quality control requirements. Should any quality defect arise, consumer trust could be damaged, immediately impacting performance. Fluctuations in raw material costs are another important factor. The production of Yomeishu requires a variety of raw materials, and rising prices or supply instability could place pressure on earnings. Given these multiple influencing factors, investors must understand the drivers of earnings volatility and carefully consider associated risks.

2. Industry-Specific Risks

As a company operating in the pharmaceutical and food industries, Yomeishu Seizo faces risks unique to these sectors. First and foremost are regulatory risks. Food and pharmaceutical products are subject to stringent regulations, and violations could result in business suspensions or penalties. Mislabeling or quality issues could severely damage the company’s reputation and erode consumer trust.

Changes in consumer preferences also represent a sector-specific risk. With growing health consciousness, demand for natural-oriented products is increasing, creating the risk that traditional products may fall behind market trends. Competitive pressure must also be considered. Intensifying competition both domestically and internationally increases the likelihood of price competition, making it more difficult to maintain brand competitiveness. Moreover, rising raw material costs and supply instability are inherent risks in this industry. Natural disasters and climate change can significantly affect crop yields of key ingredients, potentially putting pressure on profitability. Proper management of these risks and maintaining transparent operations are essential to sustaining stable growth in the industry.

3. Financial and Management Risks

Yomeishu Seizo faces various financial risks, with particular attention required for the soundness of key financial indicators such as the current ratio and equity ratio. In recent years, a downward trend in sales has been observed, and amid uncertainty regarding future growth, securing working capital has become an important challenge. Efficient capital procurement and stable cash flow management are therefore critical.

Corporate governance issues also cannot be overlooked. Promoting workforce diversity and strengthening compliance are essential to earning stakeholder trust. Ensuring transparency and establishing a robust decision-making framework are urgent priorities. Environmental considerations, as part of corporate social responsibility, must also be addressed, especially as environmental regulations become more stringent. Strengthening risk management systems and maintaining financial transparency will be crucial in building a foundation for sustainable growth.

4. Technology and R&D Risks

For future growth, Yomeishu Seizo must focus on new product development and technological innovation, but these initiatives involve risks. To maintain competitiveness and meet increasingly diverse consumer needs, the company must continuously introduce new products and services. However, product development and market entry require substantial costs, with no guarantee of success. If new products fail to gain market acceptance, development costs may not be recovered.

Rapid technological change also poses risks. The swift adoption of new technologies may disrupt existing business models, requiring the company to continuously pursue innovation and maintain competitive advantages. Investors must evaluate the company’s R&D capabilities and product strategies to determine how effectively they adapt to the evolving market environment and support future performance.

5. Risks Associated with Overseas Expansion

Risks related to overseas expansion are also significant. Although Yomeishu Seizo currently relies heavily on the domestic market, overseas expansion is considered a key component of its future growth strategy. However, entering new markets involves numerous risks, including adapting to local laws and regulations, cultural differences, and changing competitive environments. There is a possibility that expansion may not proceed as planned or that unexpected costs may arise.

In addition, exchange rate fluctuations and political stability must be considered in overseas markets. Currency volatility can directly affect earnings, and political instability in certain regions may disrupt business operations. Proper analysis and strategic planning are essential to mitigating these risks and ensuring long-term success in international markets.

6. ESG-Related Risks

As corporate social responsibility gains increasing attention, risks related to environmental, social, and governance (ESG) factors cannot be ignored. Investors closely monitor companies’ ESG initiatives, and success in this area directly affects corporate credibility and reputation. Failure to appropriately address environmental concerns or social responsibilities could damage brand value.

With environmental regulations becoming stricter, inadequate environmental measures could not only limit growth opportunities but also expose the company to penalties for non-compliance. Clear ESG policies and effective implementation measures are essential to achieving sustainable management. Investors must carefully assess both the company’s ESG policies and their feasibility when evaluating risk.

7. Natural Disaster and Geopolitical Risks

Because Yomeishu Seizo’s manufacturing bases are concentrated in specific regions, the company is exposed to natural disaster risks. Earthquakes, heavy rainfall, and other disasters could directly disrupt production activities. In addition to geographic risks, geopolitical risks must also be considered. If raw materials are sourced internationally, global conflicts or trade tensions could disrupt supply chains and negatively impact performance.

Furthermore, outbreaks of infectious diseases such as COVID-19 can significantly alter market conditions. Such events may make consumer behavior unpredictable and adversely affect business performance. To mitigate these risks, it is important to establish emergency response measures and business continuity plans, thereby enhancing organizational resilience.

In summary, Yomeishu Seizo Co., Ltd. faces a wide range of business risks. Accurately identifying these risks and minimizing them through strategic approaches will be essential to the company’s sustainable development.