Food subscriptions: Oisix ra daichi Inc. is an online and catalog retailer specializing in subscription sales and delivery of fresh food products and ingredients. The company takes pride in offering products that are safe, delicious, and of high added value, including organic vegetables, specially cultivated agricultural products, and additive-free processed foods. It says its business concept goes beyond a simple food delivery service as it aims to provide solutions to bring more value to customers’ dining tables once the products are delivered to their homes. It had about 417,000 subscribers (customers) across its three domestic home delivery businesses (Oisix, Daichi wo Mamoru Kai, and Radish Boya) at end-March 2021 (versus 339,000 a year earlier) and recorded FY03/21 consolidated sales of JPY100.1bn (+40.9% YoY).
Business model: In contrast to the typical e-commerce website, where the majority of sales are accounted for by one-off purchases, most Oisix ra daichi customers are subscribers to a weekly home delivery service. Each week, customers can add or delete items as necessary from a recommended list of products found in their shopping carts. Because the orders received from customers are then passed along to producers, the company can usually avoid holding inventories at its distribution centers (with the exception of items that have long shelf lives and can be easily handled), allowing it to keep spoilage costs below those of other sellers (including online supermarkets and brick-and-mortar retailers). For last mile delivery, the company uses Yamato Transport (which allows customers to specify delivery times) and chartered trucks that run on scheduled delivery routes. The company sources exclusively from producers (farmers) and processed food manufacturers that fulfill its safety and quality standards, so both purchase and sales prices are in the premium range. Its gross profit margin is about 50%.
Key performance indicators (KPIs): Core KPIs are the number of subscribers, order size, and purchase frequency (per-customer order count over a given period), with the number of subscribers having the greatest effect on sales growth. Customer spending per order is relatively stable due to the presence of a minimum order amount for free delivery while purchase frequency is generally determined by the lifestyles of the target customer base. Growth in the number of subscribers is affected by the amount the company spends in advertising. The company has three brands—Oisix, Daichi wo Mamoru Kai (Daichi), and Radish Boya, which are managed as individual segments. The segment profit to sales ratio, before advertising expenses is about 20% for all brands. Segment profit is defined by the company as “sales minus costs that can be linked to each business segment.”
Growth driver and sales growth targets by brand: A growth driver for the Oisix brand is the popularity of the Kit Oisix meal kit among customers seeking to save time in meal preparation. Kit Oisix meals are also attractive and photograph well for posting on social media. The company’s basic strategy in the short term is to communicate the safety, security, and convenience of Kit Oisix to acquire new customers.The growth rate of different brands varies depending on the stage that particular business is in; at its growth driver Oisix brand, the company hopes to see sales continue to grow at about the same pace seen in recent years, roughly 20% per annum. At the Daichi wo Mamoru Kai (Daichi) and Radish Boya brands, it expects annual growth rates running above 10% in the long term.
Brands, customers, business segments: The name Oisix ra daichi combines the names of Oisix, Radish Boya (merged October 2018), and Daichi wo Mamoru Kai (Daichi; merged October 2017). Main customers for Oisix are in their 30s and 40s, late 50s or over for Daichi, and 40s and 50s for Radish Boya. Because the different brands target different customer needs, the company is able to successfully differentiate them and aims to maintain all three brands while at the same time pursuing synergies in marketing and fulfillment. The company reports four business segments–the home delivery businesses of Oisix, Daichi, and Radish Boya, and the Other businesses segment, which includes retail stores. Subscriber counts at end-March 2021 were 309,000 for Oisix (+28.8% YoY), 45,000 for Daichi (+22.0% YoY), and 63,000 for Radish Boya (+10.2% YoY).
Push into US market: In April 2019, the company announced it would acquire US-based Three Limes Inc., which runs a vegan meal kit home delivery service under the brand name Purple Carrot. The company is looking to accelerate growth at Purple Carrot with the application of the management expertise it has built up in the meal kit subscription business through its operation of Oisix, Daichi, and Radish Boya. At the same time, it is using the recipes developed by Purple Carrot as the basis for selling vegan meal kits in Japan through its Kit Oisix meal kit service. Starting with FY03/22, Oisix ra daichi will disclose data on Purple Carrot as an independent segment.
Main competitors: Having acquired Daichi and Radish Boya, Oisix ra daichi does not compete with any large domestic companies in the premium price range. Businesses such as consumer cooperatives, supermarkets, online food retailers, and convenience stores are not direct competitors in all respects, as each has its own appeal depending on the consumer’s particular situation and budget. Overseas, HelloFresh SE (Frankfurt Stock Exchange [Prime Standard]: HFG) pursues a similar business model. For FY12/20, the company reported sales of EUR3.8bn (JPY500bn; +107% YoY), a marginal profit margin of 28.2% (versus 28.7% in FY12/19), an adjusted EBITDA margin of 13.5% (versus 2.6% in FY12/19), and marketing cost-to-sales ratio of 12.4% (22.3% in FY12/19) (Source: Company reporting materials for Q4 FY12/20). According to an August 2021 report from Reuters, HelloFresh says it intends to enter the Japanese market by end-2021.
FY03/21: Full-year sales of JPY100.1bn (+40.9% YoY), operating profit of JPY7.5bn (+202.6% YoY), EBITDA of JPY8.9bn (+147.6% YoY) and net income attributable to owners of the parent of JPY5.0bn (+ 536.8% YoY). The full-year progress rate compared to the company’s plan (after the revision on January 28, 2021) was sales 102.6%, operating profit 114.8%, EBITDA 111.3% and net income attributable to owners of the parent 125.8%. Although the growth in demand for home delivery services is gradually stabilizing, sales of the company’s three domestic home delivery businesses increased by around JPY10.0bn due to the increase in subscriber numbers and by JPY10.2bn yen due to the increase in ARPU. EBITDA increased by around JPY2.0bn due to the increase in the number of subscribers and by JPY3.4bn due to the increase in ARPU compared to FY03/20. In Q4, large-scale promotional activities such as TV commercials helped increase Oisix subscriber numbers by about 24,000. ARPU increased by about 10% YoY, with logistics and delivery efficiency improved. This boosted the segment profit margin on a one-time basis.
Company forecast for FY03/22: The full-year forecast for FY03/22 is sales of JPY105.0bn (+4.9% YoY), operating profit of JPY5.0bn (-33.0% YoY) and net income of JPY3.0bn. (-40.4% YoY). Although ARPU, which was temporarily higher in FY03/21 due to the effects of the pandemic, is expected to fall back, company initiatives to improve ARPU such as measures to increase purchasing frequency are expected to underpin a 5% improvement in ARPU compared to where it was pre-pandemic. According to the company, ARPU in Q1 FY03/22 has been affected by the reimposition of the state of emergency in certain areas in April 2021. At the time of the FY03/21 financial results briefing, ARPU was said to be around 10% higher than it was before the start of the pandemic. The number of subscribers to the mainstay Oisix business as of the end of March 2022 is expected to increase by around 48,000 to 357,000. Based on the adoption of a subscription model, the company expects that the increase in the number of subscribers due to COVID-19 is sustainable. The company expects a decline in profits reflecting a temporary increase in costs due to the start of operations at the new Ebina Distribution Center and the dropping out of temporary factors behind the rise in ARPU.
Medium-term business plan: The company has not announced its future outlook in the form of a medium-term business plan. The company stated in its results briefing materials for FY03/21 that it targets an EBITDA margin of 10% by the end of FY03/24 (up about 4% points from its level in FY03/21 excluding temporary factors).
Shared Research sees the company’s strengths as its relationships with producers and manufacturers that provide access to a stable supply of quality food, a unique distribution network that connects producers with consumers, and product development that addresses latent consumer needs with such offerings as Kit Oisix.
Weaknesses in our view are the difficulty of having the value of organic food recognized by consumers who are satisfied with supermarket-quality food, the company’s focus on both safety and convenience, which pushes up prices and limits the market, and the tendency of prices that include delivery charges to jump in tandem with rises in distribution costs.
|Gross profit margin||47.8%||48.0%||47.8%||47.7%||48.9%||48.7%||46.8%||47.7%||47.6%||50.6%|
|Operating profit margin||4.6%||5.0%||4.7%||3.6%||3.8%||3.3%||2.2%||3.6%||3.5%||7.5%||4.8%|
|Recurring profit margin||4.7%||5.0%||4.9%||3.7%||4.0%||3.4%||2.3%||3.6%||2.6%||7.0%|
|Per-share data (split-adjusted; JPY)|
|Shares issued (year-end; '000)||17,853||21,873||22,998||23,681||24,269||31,752||33,102||33,595||34,324||37,999|
|EPS (fully diluted)||-||17.9||17.1||13.6||21.2||20.9||7.2||70.5||23.0||133.5|
|Dividend per share||-||-||-||-||-||-||-||-||-||-||-|
|Book value per share||-||130||147||160||167||288||304||371||409||523|
|Balance sheet (JPYmn)|
|Cash and cash equivalents||829||1,959||2,379||2,659||2,718||5,248||7,236||8,136||7,676||15,580|
|Total current assets||2,546||3,688||4,430||5,061||5,424||10,688||15,262||16,602||18,250||29,226|
|Tangible fixed assets||251||545||624||485||481||785||878||1,008||1,432||2,234|
|Investments and other assets||440||162||312||407||402||943||1,323||2,993||2,170||3,062|
|Total fixed assets||856||1,025||1,261||1,270||1,380||4,363||4,585||6,148||7,837||9,059|
|Total current liabilities||1,792||1,788||2,224||2,480||2,867||5,334||8,730||9,450||11,043||17,466|
|Total fixed liabilities||78||86||93||74||70||570||1,069||794||848||828|
|Total net assets||1,531||2,838||3,373||3,778||3,867||9,148||10,048||12,505||14,195||19,991|
|Total interest-bearing debt||2||4||3||3||2||74||150||139||116||1,349|
|Cash flow statement (JPYmn)|
|Cash flows from operating activities||453||582||712||516||818||665||1,638||3,115||1,080||8,819|
|Cash flows from investing activities||-529||-468||-388||-290||-307||-497||-281||-2,216||-1,754||-2,780|
|Cash flows from financing activities||-2||956||96||54||-452||38||629||6||254||1,894|
|Financial leverage (equity multiplier)||1.9||1.7||1.7||1.7||1.7||1.8||1.9||1.8||1.9|
|Total asset turnover||3.6||3.1||3.0||3.1||2.1||2.3||3.0||2.9||3.1|
Simple YoY comparisons of consolidated sales and earnings are not possible, because Daichi and Radish Boya were added to the consolidated financial statements from end-FY03/17 and end-FY03/18 respectively. (Note that only the balance sheet is consolidated as of financial year-end.)
|(JPYmn)||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||% of Est.||FY Est.|
|Gross profit margin||47.4%||47.2%||47.1%||47.6%||50.1%||50.4%||50.5%||50.6%||49.2%||49.1%|
|Operating profit margin||3.3%||2.8%||3.0%||3.5%||9.0%||8.4%||8.2%||7.5%||7.0%||6.0%||4.8%|
|Recurring profit margin||2.9%||2.3%||2.7%||2.6%||8.0%||7.7%||7.9%||7.0%||6.9%||5.8%|
|Gross profit margin||47.4%||46.9%||46.9%||49.1%||50.1%||50.7%||50.6%||50.9%||49.2%||48.9%|
|Operating profit margin||3.3%||2.2%||3.5%||4.7%||9.0%||7.8%||7.9%||5.3%||7.0%||4.9%|
|Recurring profit margin||2.9%||1.6%||3.4%||2.2%||8.0%||7.5%||8.1%||4.6%||6.9%||4.7%|
|Home Delivery: Oisix||8,308||16,524||26,522||35,829||11,265||23,047||37,036||49,863||14,145||28,580|
|Home Delivery: Daichi wo Mamoru Kai||2,587||5,138||7,936||10,541||3,636||7,094||10,761||13,978||3,314||6,628|
|Home Delivery: Radish Boya||3,771||7,460||11,410||14,980||4,721||9,083||13,653||17,704||4,331||8,732|
|Home delivery: Purple Carrot||2,842||5,536|
|Operating profit (segment profit)||543||900||1,597||2,467||2,076||3,976||6,131||7,465||1,950||3,347|
|Operating profit margin||3.3%||2.8%||3.0%||3.5%||9.0%||8.4%||8.2%||7.5%||7.0%||6.0%|
|Home Delivery: Oisix||933||1,868||3,261||4,801||2,367||4,335||7,012||8,984||2,057||4,045|
|Segment profit margin||11.2%||11.3%||12.3%||13.4%||21.0%||18.8%||18.9%||18.0%||14.5%||14.2%|
|Home Delivery: Daichi wo Mamoru Kai||457||885||1,397||1,889||724||1,368||2,160||2,751||663||1,319|
|Segment profit margin||17.7%||17.2%||17.6%||17.9%||19.9%||19.3%||20.1%||19.7%||20.0%||19.9%|
|Home Delivery: Radish Boya||688||1,273||2,001||2,667||899||1,626||2,449||3,023||584||1,143|
|Segment profit margin||18.2%||17.1%||17.5%||17.8%||19.0%||17.9%||17.9%||17.1%||13.5%||13.1%|
|Home delivery: Purple Carrot||549||811|
|Segment profit margin||-||-||-||-||-||-||-||-||19.3%||14.6%|
|Segment profit margin||15.4%||15.8%||10.3%||8.5%||11.1%||12.2%||11.8%||12.3%||12.7%||12.6%|
|Home Delivery: Oisix||8,308||8,216||9,998||9,307||11,265||11,782||13,989||12,827||14,145||14,435|
|Home Delivery: Daichi wo Mamoru Kai||2,587||2,551||2,798||2,605||3,636||3,458||3,667||3,217||3,314||3,314|
|Home Delivery: Radish Boya||3,771||3,689||3,950||3,570||4,721||4,362||4,570||4,051||4,331||4,401|
|Home delivery: Purple Carrot||-||-||-||-||-||-||-||-||2,842||2,694|
|Operating profit (segment profit)||543||357||697||870||2,076||1,900||2,155||1,334||1,950||1,397|
|Operating profit margin||3.3%||2.2%||3.5%||4.7%||9.0%||7.8%||7.9%||5.3%||7.0%||4.9%|
|Home Delivery: Oisix||933||935||1,393||1,540||2,367||1,968||2,677||1,972||2,057||1,988|
|Segment profit margin||11.2%||11.4%||13.9%||16.5%||21.0%||16.7%||19.1%||15.4%||14.5%||13.8%|
|Home Delivery: Daichi wo Mamoru Kai||457||428||512||492||724||644||792||591||663||656|
|Segment profit margin||17.7%||16.8%||18.3%||18.9%||19.9%||18.6%||21.6%||18.4%||20.0%||19.8%|
|Home Delivery: Radish Boya||688||585||728||666||899||727||823||574||584||559|
|Segment profit margin||18.2%||15.9%||18.4%||18.7%||19.0%||16.7%||18.0%||14.2%||13.5%||12.7%|
|Home delivery: Purple Carrot||-||-||-||-||-||-||-||-||549||262|
|Segment profit margin||-||-||-||-||-||-||-||-||19.3%||9.7%|
|Segment profit margin||15.4%||16.1%||3.5%||5.3%||11.1%||12.9%||11.0%||13.5%||12.7%||12.5%|
The home delivery service (Purple Carrot) has been separated from Other in FY03/22. Figures in the above table for previous fiscal years have not been adjusted to reflect this change.
Seasonal factors: Spend per order tends to be higher in Q3 (October–December) than the rest of the year because of sales of products with a high unit price including Christmas-related items, nabe (hotpot) dishes that are mainly consumed in winter, and osechi (food traditionally served at New Year). Profit particularly spikes in Q3. On the other hand, spend per order tends to be lower during the Obon break in mid-August, when many customers are away from home. Additionally, seasonal trends were different in FY03/21 due to the COVID-19 pandemic.
Goodwill amortization is not reflected in the profit figures shown for individual segments, and is included in adjustments.
Except for the personnel expenses related to employees who are not full-time, regular employees (i.e. those that are part-time or contract workers), all personnel expenses (including wages, salaries, allowance, and mandatory social welfare payments) are recorded under corporate overhead (adjustments) and not at the individual segment level.
|KPI for the three home-delivery businesses||FY03/20||FY03/21||FY03/22|
|Oisix||No. of subscribers||221,612||226,187||230,393||239,837||252,303||274,929||285,168||308,899||333,850||347,772|
|Of which, KitOisix subscribers||119,458||124,753||128,320||130,165||140,934||156,416||163,496||181,930||198,821||209,964|
|Average spend (JPY)||5,884||5,840||6,055||6,166||6,748||6,201||6,315||6,215||6,098||6,057|
|Purchase frequency (times)||1.89||1.82||1.88||1.90||2.05||2.09||2.08||2.10||2.11||2.07|
|Daichi||No. of subscribers||38,517||37,532||37,121||37,127||43,941||44,878||44,998||45,307||45,196||45,394|
|Average spend (JPY)||8,195||8,292||8,732||8,508||9,234||8,610||9,000||8,729||8,425||8,557|
|Purchase frequency (times)||2.54||2.55||2.56||2.54||2.94||2.80||2.71||2.69||2.73||2.72|
|Radish Boya||No. of subscribers||61,009||59,400||58,528||56,935||62,515||61,822||61,518||62,751||65,320||66,464|
|Average spend (JPY)||6,055||6,060||6,398||6,206||7,028||6,373||6,696||6,441||6,402||6,407|
|Purchase frequency (times)||3.01||2.96||3.07||3.00||3.30||3.28||3.14||3.15||3.15||3.08|
|Oisix||No. of subscribers (YoY)||124.8%||121.0%||119.1%||118.5%||113.8%||121.5%||123.8%||128.8%||132.3%||126.5%|
|KitOisix subscribers (YoY)||-||-||-||-||118.0%||125.4%||127.4%||139.8%||141.1%||134.2%|
|Average spend (YoY)||98.0%||97.8%||98.5%||102.5%||114.7%||106.2%||104.3%||100.8%||90.4%||97.7%|
|Purchase frequency (YoY)||98.4%||97.8%||100.5%||102.2%||108.5%||114.8%||110.6%||110.5%||102.9%||99.0%|
|Daichi||No. of subscribers (YoY)||87.4%||85.7%||88.2%||92.4%||114.1%||119.6%||121.2%||122.0%||102.9%||101.1%|
|Average spend (YoY)||103.7%||102.1%||101.9%||105.7%||112.7%||103.8%||103.1%||102.6%||91.2%||99.4%|
|Purchase frequency (YoY)||99.2%||104.5%||108.5%||106.7%||115.7%||109.8%||105.9%||105.9%||92.9%||97.1%|
|Radish Boya||No. of subscribers (YoY)||82.2%||82.9%||88.6%||90.5%||102.5%||104.1%||105.1%||110.2%||104.5%||107.5%|
|Average spend (YoY)||110.9%||107.9%||104.6%||105.7%||116.1%||105.2%||104.7%||103.8%||91.1%||100.5%|
|Purchase frequency (YoY)||95.9%||97.4%||101.7%||101.0%||109.6%||110.8%||102.3%||105.0%||95.5%||93.9%|
The number of Oisix subscribers has been increasing because of a steady rise in customers purchasing Kit Oisix (209,964 at the end of September 2021, +34.2% YoY), with new customers attracted by meal kits. Chanto Oisix plan subscribers have been removed from KPIs from FY03/22. The number of subscribers increased sharply in Q1 FY03/22 as a result of successful spring promotions. The high rate of increase is in part due to the fact that the company had to curtail promotions in Q1 FY03/21 because of the capacity constraints at that time.
Oisix was impacted by the loss of around 2,000 subscribers in Q2 FY03/22, because the company implemented withdrawal procedures for low-usage customers. A further loss of around 10,000 subscribers is expected in Q3. The company plans to complete the withdrawal procedures for low-usage customers by the end of Q3. This action raises the average order frequency of remaining customers and thus lifts ARPU.
In Q1 FY03/21, the number of subscribers and ARPU increased sharply YoY for all three businesses due to the surge in home delivery demand in the wake of the COVID-19 pandemic. Demand for home consumption remained strong from Q2, but as consumers became more accustomed to “living with COVID-19” as time passed since the start of the pandemic, the growth in home delivery demand seen in Q1 stabilized and the sharp YoY growth in ARPU subsided in stages. The pace of new subscriber growth also subsided. Nevertheless, the reimposition of the state of emergency in January 2021 in response to a resurgence of infections slowed the rate of decline in the pace of ARPU and new subscriber growth.
Purchase frequency is on the rise at Oisix, due partly to the effects of a customer success program for new customers, and partly to the popularity of an all-you-can-drink dairy service (this service formerly known as Prime Pass provides fruits and vegetables at a discount and allows subscribers to choose three dairy or egg items per order for a flat monthly fee).
For Daichi, the number of subscribers declined from Q4 FY03/18 until Q4 FY03/20, while ARPU was on the rise over the same period. This reflected changes in services and the company’s ongoing efforts toward targeted promotions.
The number of Radish Boya
subscribers was coming down until Q4 FY03/20 as the company changed the delivery
fee schedule and made other changes aimed at reducing the number of light users
(whose order value is below the company’s breakeven point per order) and
otherwise increase profits as opposed to sales. In addition to reducing the
number of light users, the company’s move to focus more resources on making
purchase proposals to existing subscribers has led to increases in spend per order. Fuzoroi Radish, which specializes in selling imperfect fruit, vegetables, and seafood, has been performing well, with the number of subscribers in FY03/22 surpassing the initial target.
Seasonal factors: Spend per order tends to be higher in Q3 (October–December) than the rest of year because of sales of products with a high unit price including Christmas-related items, nabe (hotpot) dishes that are mainly consumed in winter, and osechi (food traditionally served at New Year). Profit particularly spikes in Q3.
|% of initial full-year forecasts||FY03/20||FY03/21||FY03/22|
|Home Delivery: Oisix||23.8%||47.3%||76.0%||102.7%||26.2%||53.6%||86.1%||116.0%||24.8%||50.1%|
|Home Delivery: Daichi wo Mamoru Kai||23.7%||47.1%||72.8%||96.7%||33.1%||64.5%||97.8%||127.1%||25.5%||51.0%|
|Home Delivery: Radish Boya||24.6%||48.8%||74.6%||97.9%||33.7%||64.9%||97.5%||126.5%||27.9%||56.3%|
Progress toward initial forecasts
at the three home delivery businesses in Q2 FY03/22 was slower than in Q2 FY03/21, which benefited from the spread of COVID-19, but faster than in Q1 FY03/20.
Direct YoY comparisons are not possible for Radish Boya because FY03/19 included 13 months of results.
In a typical year, the rate of progress for sales toward initial full-year forecasts tends to rise in Q3. Furthermore, spend per order tends to be higher in Q3 (October–December) than the rest of the year because of sales of products with a high unit price including Christmas-related items, nabe (hotpot) dishes that are mainly consumed in winter, and osechi (traditional New Year cuisine).
For 1H FY03/22, the company reported consolidated sales of JPY56.2bn (+18.1% YoY), operating profit of JPY3.3bn (-15.8% YoY), EBITDA of JPY4.2bn (-10.5% YoY), and net income attributable to owners of the parent of JPY2.2bn (-12.1% YoY). Spring promotions (mainly for Oisix) were successful, boosting subscribers of the three domestic home delivery services by around 43,000 versus end-FY03/21. Although ARPU was down, having spiked in 1H FY03/21 in the wake of the pandemic, it consistently ran ahead of the company's initial expectations. Versus pre-pandemic levels, ARPU was around 18% higher for Oisix and 10% higher for Daichi wo Mamoru Kai and Radish Boya.
Normally, the company could expect to see sales decline during Q2 as people take off for summer vacations and holidays such as Obon, then start picking up again during Q3 on rising demand for osechi (food traditionally served at New Year) and other year-end holiday foods. In FY03/21, however, the onset of the COVID-19 pandemic suppressed much of these regular seasonal effects. In FY03/22, the pandemic has been posing less and less of a drag on everyday life in Japan as the year wears on, and the company reports that this has brought back the normal seasonal effects in a big way, especially compared with the previous fiscal year.
Of the roughly JPY8.6bn YoY increase in consolidated sales, JPY4.7bn came from the company's three domestic home delivery services. Of this, new subscribers added JPY7.6bn while reduced ARPU took away JPY2.9bn. Purple Carrot accounted for roughly JPY1.5bn of the increase while Other businesses added JPY2.4bn.
EBITDA was down about JPY490mn YoY, mainly because the company cut back on promotions (investing for growth) due to logistics capacity constraints at Oisix. Excluding growth-oriented investments, the three domestic home delivery services saw EBITDA increase by approximately JPY800mn, with new subscribers adding roughly JPY1.5bn and lower ARPU reducing EBITDA by JPY700mn. The increase in growth investments effectively reduced EBITDA by about JPY1.6bn (with JPY1.5bn of this representing additional PR spending by its three domestic home delivery services). In Purple Carrot, EBITDA was up roughly JPY400mn YoY; in Other businesses, EBITDA was up JPY300mn YoY. The rise in fixed cost effectively reduced EDITDA by about JPY400mn.
The company made no changes to its full-year forecast for FY03/22. 1H sales were 53.5% of its full-year target, operating profit 66.9%, EBITDA 64.4%, and net income attributable to owners of the parent 71.9%. At the time of its Q2 results announcement, the company said it would be difficult to rationally estimate the impact from the COVID-19 pandemic on its 2H business performance. In 1H FY03/22, Oisix increased its subscriber count by around 39,000 versus its full-year target of 48,000. ARPU did not decline as much as initially expected, but the company expects it to continue coming down in 2H FY03/22. The company plans new PR spending at the maximum level while keeping cost per acquisition down to a reasonable level. The company forecasts around JPY800mn temporary increase in distribution costs in 2H associated with starting operation of a new distribution center. See the “Full year FY03/22 forecast” section for details of the forecast.
Sales were JPY28.6bn (+24.0% YoY) and segment profit was JPY4.0bn (-6.7% YoY).
The company boosted the number of subscribers to its Oisix Club home delivery service to 347,772 as of the end of Q2 FY03/22 (September 2021), up from 308,899 at the end of FY03/21 (March 2021). The number of Oisix subscribers increased by about 39,000 in 1H versus the full-year target of 48,000.
During Q2, Oisix saw its subscriber count decline by roughly 2,000 as it implemented withdrawal procedures for relatively inactive customers. The company expects the number of Oisix subscribers will decline by another 10,000 or so in Q3. It plans to end the withdrawal procedures by the end of Q3. This action raises the average order frequency of remaining customers and thus lifts ARPU.
After the new Ebina Distribution Center begins operation, the current Ebina Distribution Center will be repurposed as the Oisix Food Rescue Center, which will reduce food loss by processing imperfect food and vegetables. The company plans to utilize imperfect vegetables as ingredients and processed food for Kit Oisix and upcycled products, which in turn will increase Oisix manufacturing capacity. This will not require large capital investment, because the company only needs to invest in machinery and equipment to repurpose an existing facility.
The company has started exploring collaboration with Akachan Honpo Co., Ltd., a subsidiary of Seven & i Holdings Co., Ltd. (TSE1: 3382). Akachan Honpo runs 121 stores in Japan selling maternity, baby, and kids products. Oisix ra daichi and Akachan Honpo are planning to jointly launch services mainly for parents of young children, aiming to grow the business to a scale of JPY10.0bn in five years' time.
Sales were JPY6.6bn (-6.6% YoY) and segment profit was JPY1.3bn (-3.6% YoY).
Daichi's subscriber count hit 45,394 at the end of Q2 FY03/22 (September 2021), up from 45,307 at the end of FY03/21 (March 2021). However, the service has been slow to improve the balance between LTV and CPA, and the subscriber count is still far below the initial target of 48,000 at end-FY03/22. The company is therefore revamping the service.
Sales were JPY8.7bn (-3.9% YoY) and segment profit was JPY1.1bn (-29.7% YoY).
Radish Boya's subscriber count hit 66,464 at the end of Q2 (September 2021), up from 62,751 at the end of FY03/21 (March 2021). As of Q2, the subscriber count was progressing at a faster pace than the initial target of 66,000 at end-FY03/22 (+3,000 versus end-FY03/21). Fuzoroi Radish, which specializes in imperfect fruit, vegetables, and seafood continued to perform well. The segment profit margin was only 13.1%, however, because the company stepped up promotions.
Sales were JPY5.5bn and segment profit was JPY811mn. The Purple Carrot business was separated from Other businesses from Q1 FY03/22. Although the subscriber count was down QoQ as economic activity resumed, the business stayed in the black and its performance trended ahead of the company's plan. The company believes this is due to heightened awareness of health and sustainable retail.
Sales were JPY6.9bn and segment profit was JPY869mn. E-commerce support services for other companies performed strongly.
Oisix Shanghai will resume detailed local surveys, because travel restrictions related to the spread of COVID-19 have been relaxed.
The company will begin providing Space AD, an offline promotion support service devoted to subscription business models. Target sales are JPY5.0bn in three years' time.
|(JPYmn)||1H Act.||2H Act.||FY Act.||1H Act.||2H Act.||FY Act.||1H Act.||2H Est.||FY Est.|
|Cost of sales||17,195||20,027||37,222||23,587||25,852||49,439||28,599|
|Gross profit margin||47.2%||48.0%||47.6%||50.4%||50.8%||50.6%||49.1%|
|Operating profit margin||2.8%||4.1%||3.5%||8.4%||6.6%||7.5%||6.0%||3.4%||4.8%|
|Recurring profit margin||2.3%||2.8%||2.6%||7.7%||6.4%||7.0%||5.8%||-6.7%|
|(JPYmn)||1H Act.||2H Act.||FY Act.||1H Act.||2H Act.||FY Act.||1H Act.||2H Est.||FY Est.|
|Operating profit (segment profit)||900||1,567||2,467||3,976||3,489||7,465||3,347||1,653||5,000|
|Operating profit margin||2.8%||4.1%||3.5%||8.4%||6.6%||7.5%||6.0%||3.4%||4.8%|
|Segment profit margin||11.3%||15.2%||13.4%||18.8%||17.3%||18.0%||14.2%||15.0%||14.6%|
|Segment profit margin||17.2%||18.6%||17.9%||19.3%||20.1%||19.7%||19.9%||18.5%||19.2%|
|Segment profit margin||17.1%||18.5%||17.8%||17.9%||16.2%||17.1%||13.1%||20.1%||16.1%|
|Segment profit margin||15.8%||4.5%||8.5%||12.2%||12.3%||12.3%||12.6%||9.8%||10.8%|
The company left its full-year FY03/22 earnings forecast unchanged. 1H results versus full-year forecasts were 53.5% for sales, 66.9% for operating profit, 64.4% for EBITDA, and 71.9% for net income attributable to owners of the parent. The company commented that it was difficult as of the time of the 1H results announcement to make a rational estimate of the impact of COVID-19 on 2H earnings results. The Oisix subscriber count was up by around 39,000 in 1H versus the full-year target of a 48,000 increase. ARPU had not fallen as much as initially expected, but the company expects it to decline in stages in 2H. The company plans to keep promotional spending within the range of appropriate CPA. A one-time distribution cost increase of about JPY800mn is forecast in 2H due to a new distribution center starting operation.
Oisix home delivery business was impacted by the loss of around 2,000 subscribers in Q2 FY03/22, because the company implemented withdrawal procedures for low-usage customers. A further loss of around 10,000 subscribers is expected in Q3. The company plans to complete the withdrawal procedures for low-usage customers by the end of Q3. This action raises the average order frequency of remaining customers and thus lifts ARPU.
The number of new COVID-19 cases in Japan has trended at a low level since the state of emergency ended at end-September 2021. This likely means that opportunities for travel and eating out are gradually increasing for Oisix ra daichi customers. The company explained that it was not revising its full-year forecast, because while it assumed a decrease in purchase frequency and lower ARPU from Q3 onward, it was difficult to make a rational estimate at the time of the 1H results announcement regarding the rate of ARPU decline and impact on seasonal produce for the holiday period, which make a substantial sales contribution.
Q4 is a peak promotion period of the Oisix brand in the final months of Japan's fiscal year, which starts in April. The company says that as in previous years, it plans new promotional spending within the range of appropriate CPA.
The company left its full-year FY03/22 forecast unchanged. Progress versus the initial forecast put sales at 26.6%, operating profit at 39.0%, EBITDA at 35.6%, and net income attributable to owners of the parent at 43.1%. Oisix is aiming to increase its subscriber count by 48,000 during the fiscal year, but the count grew by about 25,000 in Q1 alone, so it is well on its way to achieving its goal. Although the decline in ARPU is currently smaller than initially anticipated, the company still expects a gradual decrease over the remainder of FY03/22. It plans new PR spending at the maximum level, while keeping cost per acquisition down to a reasonable level. The company forecasts a temporary increase of about JPY700–800mn in distribution costs in 2H associated with the launch of a new distribution center.
While Oisix and Purple Carrot achieved strong growth in their subscriber counts in Q1, it should be noted that their growth is typically seasonal, with Oisix seeing its biggest jump between April and June and Purple Carrot between January and March (when their promotional spending is highest). It should therefore not be assumed their subscriber counts will grow at a similar pace from Q2 onward. In addition, the company's spend per order tends to be higher in Q3 (October–December) than the rest of the year because of sales of products with a high unit price including Christmas-related items, nabe (hotpot) dishes that are mainly consumed in winter, and osechi (food traditionally served at New Year). Profit particularly spikes in Q3. On the other hand, spend per order tends to be lower during the Obon break in mid-August, when many customers are away from home.
In Q2 (July–September), the company usually sees sales dip because that quarter includes the Obon break, when Japanese typically travel to see relatives or for pleasure. However, such seasonality had a weaker impact in 2020 because fewer people traveled due to the COVID-19 pandemic. The government's state of emergency declaration remained in place in 2021 in Tokyo and some other urban areas, but the level of restraint on travel was not actually as great as in 2020, so the company says some seasonal impact will return, but not to pre-pandemic levels.
When announcing its initial forecast, the company said it expected a gradual decline in ARPU going forward, and it did not change this assumption when it announced its Q1 results. Currently, the number of new COVID-19 cases remains high or is even growing, so the decline in ARPU has been smaller than initially projected. While the number of new cases among the elderly, who were among the first to be vaccinated, has not grown significantly, the number of new cases is trending upward among those aged 30–50, Oisix's main customer base, and the company says this may be affecting customer behavior. However, it still expects ARPU to decline as the number of new COVID-19 cases falls, so it aims to maintain ARPU above pre-pandemic levels with measures to enhance its value proposition. On the other hand, the current situation suggests that COVID-19 may stay with us longer than initially anticipated, so the company is reconsidering its planned measures in response to the changing external environment.
The full-year forecast for FY03/22 is sales of JPY105.0bn (+4.9% YoY), operating profit of JPY5.0bn (-33.0% YoY) and net income of JPY3.0bn. (-40.4% YoY). EBITDA is forecast at JPY6.5bn (-27.0% YoY). Although ARPU, which was temporarily higher in FY03/21 due to the effects of the pandemic, is expected to fall back, company initiatives to improve ARPU such as measures to increase purchasing frequency are expected to underpin a 5% improvement in ARPU compared to where it was pre-pandemic. According to the company, ARPU in Q1 FY03/22 has been affected by the reimposition of the state of emergency in certain areas in April 2021. At the time of the FY03/21 financial results briefing, ARPU was said to be around 10% higher than it was before the start of the pandemic. The number of subscribers to the mainstay Oisix business as of the end of March 2022 is expected to increase by around 48,000 to 357,000. Based on the adoption of a subscription model, the company expects that the increase in the number of subscribers due to COVID-19 is sustainable. The company expects a decline in profits reflecting a temporary increase in costs due to the start of operations at the new Ebina Distribution Center and the dropping out of temporary factors behind the rise in ARPU.
The company expects the temporary boost to ARPU dropping away in the three domestic brands to push down sales by JPY10.0bn and EBITDA by JPY3.4bn. However, it anticipates that improved ARPU capabilities at the three domestic brands will boost sales to the tune of JPY3.0bn and EBITDA by JPY900mn. Overall, it expects measures implemented to increase ARPU to lead to the maintenance of about 30% of the ARPU growth achieved in FY03/21. The company does not expect to be able to hold on to the other 70% of the ARPU growth. Oisix ra daichi expects spend per order to decline to the level where free delivery kicks in. It will continue to take measures to avoid a decline in purchase frequency.
The increase in subscriber numbers for the three domestic brands is expected to increase sales by JPY11.5bn and EBITDA by JPY2.3bn. Segment profit margins before accounting for advertising expenses hovered around 20% for each brand, so the company estimates EBITDA to increase at the pace of roughly 20% of sales growth.
Increases in logistics costs for the Ebina Distribution Center and promotional expenses are expected to lower EBITDA by JPY1.3bn.
The company forecasts sales of JPY57.0bn (+14.3% YoY) and segment profit of JPY8.3bn (-7.6% YoY). It forecasts the segment profit margin at 14.6% (18.0% in FY03/21) due to increased logistics costs at the new Ebina Distribution Center (concurrent operating expenses with one-time expenses for transport of goods between centers) and increased promotional expenses. The company expects 357,000 subscribers (+48,000 YoY) at end-FY03/22.
The company forecasts sales of JPY13.0bn (-7.0% YoY), segment profit of JPY2.5bn (-9.1% YoY), and a segment profit margin of 19.2% YoY (19.7% in FY03/21). It expects 48,000 subscribers (+3,000 YoY) at end-FY03/22.
The company forecasts sales of JPY15.5bn (-12.4% YoY), segment profit of JPY2.5bn (-17.3% YoY), and a segment profit margin of 16.1% YoY (17.1% in FY03/21). It expects 66,000 subscribers (+3,000 YoY) at end-FY03/22.
The company forecasts sales of JPY19.5bn (+3.1% YoY), segment profit of JPY2.1bn (-9.5% YoY), and a segment profit margin of 10.7% (12.3% in FY03/21). It expects both sales and profit at Purple Carrot to decline. The company has different performance expectations from the three domestic businesses, and has accounted for a certain number of subscription cancellations from those who had signed up due to the COVID-19 pandemic. The company also expects ARPU to fall YoY.
HelloFresh is a German company that provides food and meal kit delivery services online. It pursues a business model similar to that of Oisix ra daichi and operates mainly in Europe and the U.S. For FY12/20, the company reported sales of EUR3.8bn (JPY500bn; +107% YoY), a marginal profit margin of 28.2% (versus 28.7% in FY12/19), an adjusted EBITDA margin of 13.5% (versus 2.6% in FY12/19), and marketing cost-to-sales ratio of 12.4% (22.3% in FY12/19) (Source: Company reporting materials for Q4 FY12/20). In Q1 FY12/21, HelloFresh had 7.28 million active users (+74.2% YoY), an average of 4.0 orders per quarter (+14.3% YoY), and spend per order of EUR49.3 (approx. JPY6500; +4.0% YoY). The company’s FY12/21 guidance calls for sales growth of 35–45% and an adjusted EBITDA margin of 10–12% (Source: Company reporting materials for Q1 FY12/21). We expect HelloFresh to enter the Japanese market in earnest in the near future as evidenced by its website, which indicates that it is recruiting for 14 positions in the country, centering on managerial roles (as of end-May 2021).
The company assumes that there are two types of trends in consumer behavior that have occurred as a result of the COVID-19 pandemic: those that are more irreversible and those that are less irreversible. The ones the company believes are more irreversible are the establishment of food e-commerce (including delivery services), remote work in urban areas (i.e., more meals eaten at home, increased need for easy-to-prepare meals), and increased health consciousness. The company believes that consumption patterns as regards types of entertainment that consumers prefer to consume outside of the home (but had no choice but to find at-home substitutes for during the pandemic) will return to pre-pandemic norms.
|Results vs. Initial Est.||FY03/12||FY03/13||FY03/14||FY03/15||FY03/16||FY03/17||FY03/18||FY03/19||FY03/20||FY03/21|
|Revenue (Initial Est.)||16,351||18,300||20,000||23,000||38,000||61,000||70,000||78,000|
|Results vs. Initial Est.||-2.7%||-1.3%||0.8%||0.1%||5.2%||5.0%||1.5%||28.3%|
|Operating profit (Initial Est.)||827||750||750||820||670||1,200||2,200||3,000|
|Operating profit (Results)||580||734||741||649||774||753||891||2,312||2,467||7,465|
|Results vs. Initial Est.||-10.5%||-13.5%||3.2%||-8.2%||33.1%||92.7%||12.1%||148.8%|
|Recurring profit (Initial Est.)||833||775||770||830||-||-||-||-|
|Recurring profit (Results)||596||734||775||669||806||778||937||2,302||1,825||7,037|
|Results vs. Initial Est.||-6.9%||-13.7%||4.7%||-6.3%||-||-||-||-|
|EBITDA (Initial Est)||1,390||2,000||3,200||4,400|
|Results vs. Initial Est.||20.1%||57.7%||12.3%||102.3%|
|Net income (Initial Est.)||500||465||480||580||390||900||1,000||1,200|
|Net income (Results)||332||339||437||347||539||515||237||2,388||790||5,031|
|Results vs. Initial Est.||-12.6%||-25.3%||12.2%||-11.2%||-39.2%||165.3%||-21.0%||319.3%|
Since the company’s sales mainly come from subscription services, the difference between initial sales forecasts and results tend to be small. In FY03/21, sales were much higher than the company’s initial forecast due to a significant increase in both the subscriber count and ARPU as a result of at-home demand caused by the COVID-19 pandemic. On the profit front, in addition to the effect of the increase in the subscriber count, improved delivery efficiency due to the rise in ARPU led to an improvement in profit margins, and profits at each level also comfortably outstripped the company’s initial forecast.
Oisix ra daichi does not currently disclose a medium-term business plan. We have outlined the company’s thinking on strategy conveyed during our interviews with management as follows. For information about the short-term actions, please refer to the “Quarterly trends and results” or “Full-year FY03/22 company forecast” sections. The company stated in its results briefing materials for FY03/21 that it targets an EBITDA margin of 10% by the end of FY03/24 (up about 4% points from its level in FY03/21 excluding temporary factors).
The company says it wants to go beyond operating a simple food delivery service, becoming instead a company that enriches consumer lifestyles by helping to create a more fulfilling dining experience after the delivery is made by providing safe, delicious, and high value-added food products. In keeping with this aim, it intends to keep the focus on food-related products and is not thinking about establishing a full-scale business dealing in daily-use goods or any other products outside of foods.
Because the company deals in premium-priced food products, both as a buyer and a seller, the majority of its customers at this time are in upper-income households that can pay premium prices. Over the long term, however, the company would like to expand its customer base outside the upper-income household demographic. The company noted that online sales of food, beverages, and liquor still account for only 2.89% of nationwide retail sales in this category (according to the FY2019 International Economic Research Project for the Development of an Integrated Domestic and International Economic Growth Strategy [E-Commerce Market Survey]), but that it expects the proportion of sales accounted for by e-commerce in this area to rise over the long term and eventually reach roughly the same level as other product categories.
While the growth rate of its different brands varies depending on the stage that particular business is in, at the Oisix brand, its growth driver, the company hopes to see sales continue to grow at about the same pace it has seen in recent years, or 15–20% per annum. At the Daichi and Radish Boya brands, it will first focus on creating new products and services that better meet customer needs and have sales move into a second growth stage, after which it expects annual growth rates running 7–8% or above in the long term.
The domestic home delivery businesses were the mainstay in the past, but in recent years Oisix ra daichi has started full-scale advances into other business domains, including domestic brick-and-mortar retail sales and overseas home delivery businesses. It is looking to continue expanding its presence in all three of these business domains. The main pillar of earnings growth is the food home delivery business.
The company said it is still undecided as to whether it would try to develop multiple brands in the US, but did not dismiss this as a possibility at some point in the future. The company has a locally incorporated subsidiary in Hong Kong and another in Shanghai, China. Yet while believing the Chinese market has great growth potential, the company said it will be quite some time before it is able to grow its business in the Chinese market.
With respect to future mergers and acquisitions, the company said it would consider opportunities like Purple Carrot, where it can leverage its expertise in subscription delivery services and generate synergies, and like DEAN & DELUCA, with strong attributes it did not already possess that would allow it to expand its presence in a particular business domain. It said it would also consider companies with functions it does not possess (e.g., engineering and design companies). In all of these cases, the company said its focus would not be on the growth rate shown by reported earnings but rather on cash flow, and whether the acquisition would return at least as much cash flow as its investment criteria require. For expansion into businesses with strong attributes it does not already possess, the company said it will not be able to handle multiple projects simultaneously, and that it plans to gradually expand the business formats.
The company in February 2021 announced a capital and operational tie-up with AP Holdings (TSE1: 3175) and the acquisition of a 51% stake in Toyoichi Co., Ltd. (formerly Seven Work), a marine products wholesaler operating under AP Holdings. The stock acquisition is somewhat different than M&A activity conducted by the company in the past, reflecting its expanded scope for M&A. The acquisition of businesses positioned upstream in its existing businesses will enable the company to secure fresh marine product purchasing channels free from intermediaries, thereby increasing the value of the marine products category in the home delivery business while also reducing costs. The company has indicated that it plans to hire 20 leadership candidates for the promotion of new businesses, including overseas businesses and alliances, by March 2022.
In addition to Oisix, the company acquired Daichi wo Mamoru Kai (Daichi) in an absorption-type merger in October 2017 and in February 2018 acquired Radish Boya, making it a consolidated subsidiary. With these acquisitions, the company now has a total of three domestic brands. In contrast to its mainstay Oisix brand, which targets customers in their 30s and 40s, the Daichi brand targets users in their late 50s or older, while Radish Boya targets users in their 40s and 50s. The company is able to successfully differentiate these brands and aims to maintain all three, through which it can offer subscription services designed to meet the needs of each age group, while at the same time pursuing synergies in marketing, fulfillment, and other areas. We would note that Radish Boya was operating in the red before Oisix ra daichi acquired it in February 2018, but has since moved into the black thanks to the application of Oisix ra daichi’s KPI-focused management system and the resulting improvement in profit per delivery.
The growth of the Oisix brand is driven by the popularity of its Kit Oisix meal kits among customers looking to save time in meal preparation and who therefore value the kit’s convenience. Kit Oisix meals are also attractive and photograph well for posting on social media, which is another reason they enjoy a good reputation among customers. The company’s basic strategy in the near term is to go after new subscribers, basing its appeal on safety and security and high level of convenience offered by its Kit Oisix meal kits, as well as helping to reduce food loss.
Oisix began selling Kit Oisix meal kits in 2013, but sales growth accelerated from about 2017. The company attributes the pickup in growth to an increase in favorable media coverage, which helped the meal kit concept become more widely known among the general public, as well as the entry of other companies into the market.
The company will focus particularly on increasing its subscriber count.
Because the spend per order is influenced greatly by the minimum order size needed to qualify for free delivery, the company is looking to keep the value near the current level.
The company would like to see the purchase frequency (number of orders placed by a subscriber during a given period) increase a bit more.
The company stated in its results briefing materials for FY03/21 that it targets an EBITDA margin of 10% by the end of FY03/24 (up about 4% points from its level in FY03/21 excluding temporary factors). Its main measures toward this end are unchanged from before. The improvement of the margin in this context is the effect across all businesses, and the degree of margin increase would vary between brands. For example, the effect of the new distribution center will only impact the Oisix brand.
The company seeks to lower product costs and strengthen the upstream processes of the supply chain (manufacturing and development) by promoting automation of meal kit and salad kit manufacture and bringing processes such as meat processing and repackaging of fruits and vegetables in house. The company plans to focus on bringing meat processing in house, which should make a significant cost reduction impact and offers scope for further quality improvement, targeting an in-house processing ratio of 70% by end-FY03/21 from the current 30% or so. It plans to begin this initiative in FY03/21. The company anticipates synergies created by the abovementioned acquisition of Toyoichi Co., Ltd.
The new distribution center will be used by Oisix and the Solution Business. Completion is scheduled for September 2021, which will triple shipment capacity versus FY03/20. The company also plans to promote automation within warehouses. Since 2H FY3/22 will be a transition period, the profit margin will temporarily decline due to the cost of running parallel operations and shifting inventory between distribution centers. From FY03/23 onward, however, the company expects logistics costs to fall as operations are centralized.
The company is encouraging customers to use multiple subscription services (e.g., Oisix subscriber occasionally adds a vegan plan to Kit Oisix) to increase spend per order and reduce the ratio of overheads (operational expenses) to sales. Whereas the previous focus was on increasing SKU, it has changed its policy due to shipment capacity constraints.
Distribution costs from producer to the company is part of product cost. In the past, producers organized their own shipments, which incurred labor and cost for both parties. Oisix ra daichi is considering a joint project with Yamato Transport to centralize shipments at Yamato Transport to streamline the logistics process from producer to the company. A pilot joint collection program confirmed that procurement and delivery cost savings were possible. The project began in earnest in Q4 FY03/20, and is expected to be a long-term endeavor.
The company will open its new Ebina Distribution Center in September 2021 to expand shipment capacity of Oisix. This capex plan was scheduled before demand increased in response to the spread of COVID-19. In April 2021, the company commented that the plan was on track.
It announced a public offering of new shares in March 2020 and received payments in April and May with estimated net proceeds of up to JPY4,548mn. Of this amount, JPY3,560mn has been budgeted for investment spending on the company’s new Ebina Distribution Center and computer systems, with this spending expected to be completed by October 2021. Another JPY880mn has been budgeted for upgrading core systems, including upgrades of the core system platform for the Radish Boya business; this investment spending is expected to be completed by March 2023.
When it released its Q1 FY03/22 earnings results, the company also announced that it would invest about JPY4.0bn to expand its freezer facilities. It plans to triple its frozen shipment capacity versus FY03/21, with the new facility starting operation in fall 2023.
After consolidating its frozen goods operations, which differ from its handling of refrigerated goods, the company will consider opening a distribution base in western Japan to strengthen business continuity planning (BCP). However, it said that the opening of a distribution center in western Japan is a long-term consideration issue and will be scheduled as capex in or after FY03/25. The company has not yet settled on the details of these investments, and thus it is currently undecided on the amount it plans to spend.
There is a limit to the number of households that can afford to eat premium-priced food on a daily basis, but the price points at which the company sells its meal kits make it hard for it to make inroads into the mass market. Because domestic production of organic agricultural products is constrained by soil and climate conditions, and thus tends to be very labor-intensive, there is a limit to how much the company can bring down its own purchasing prices even when buying in greater volume. For these reasons, in order for Oisix ra daichi to achieve substantial growth, it will need innovations to bring down costs on the production side. Since the company has no expertise on the production side, it is instead hosting gatherings to give its contract farmers a forum to share their own expertise with other farmers, investing in agriculture technology ventures, and establishing business alliances with other companies that do have expertise in this area. The acquisition of Toyoichi Co., Ltd. is another one of the company’s upstream initiatives. The company aims to secure fresh marine product purchasing channels free from intermediaries, thereby increasing the value of the marine products category in each brand while also reducing costs.
The company states that it will continually evolve the way it connects consumers with producers to create a sustainable society, and that it will employ business methods that address social issues related to food. The company is actively working on sustainable retail in the sense of harnessing its business model and technology to provide quality food that is good for people and the planet. Its belief is that taking the initiative to address heightened social awareness of food loss reduction and carbon neutrality will help its business grow.
In its 1H FY03/21 results announcement, Oisix ra daichi announced new initiatives to protect the environment. It plans to adopt its own “green standards” (aiming to halve greenhouse gas emissions from its production processes within five years) and conduct trials of delivery vehicles powered by green energy, work to make its packaging more environmentally friendly (changing at least half of its packaging to eco-friendly alternatives within five years), enhance efforts to prevent food loss throughout its supply chain centered on its Kit Oisix meal kits, and promote sales of upcycled foods (made by converting foodstuffs that would otherwise be discarded into new foods).
Oisix ra daichi is an online and catalog retailer specializing in the sale and delivery of fresh food products and ingredients. The company takes pride in offering products that are safe, delicious, and of high added value, including organic vegetables, specially cultivated agricultural products, and additive-free processed foods. It says its business concept goes beyond a simple food delivery service as it aims to provide solutions to bring more value to customers’ dining tables once the products are delivered to their homes.
The company has three domestic brands–Oisix, Daichi wo Mamoru Kai (Daichi), and Radish Boya. They all offer home delivery services for fresh produce, but do not share the same distribution system and operational flow due to differences in origins and history. The company plans to improve overall efficiency by consolidating their common functions. However, because the brands’ business focus and the value they offer to customers are different, the company assigns a manager for each brand who spearheads brand-specific strategies for business operation and product development.
Unless otherwise indicated, the discussion below refers to the company’s three major domestic brands: Oisix, Daichi, and Radish Boya.
Oisix ra daichi has established a subscription model that generates sustainable profit by rigorously recovering cost per acquisition (CPA)*1 and managing profit and loss per delivery.
The company aims to recover cost at an early stage by managing cost per acquisition (CPA) against the lifetime value (LTV)*2 of a customer on a profit basis, calculated as “ARPU (average spend per order x average purchase frequency [per-customer order count over a given period]) multiplied by the segment profit to sales ratio*3 before advertising expenses.” The company assumes it generally takes six months to recover CPA for the average subscriber. It lumps subscribers acquired through online ads and TV commercials together when considering the recovery period of CPA.
ARPU per month is about JPY11,000 for Oisix, over JPY20,000 for Daichi, and slightly below JPY20,000 for Radish Boya. These values are before ARPU increased due to the impact of COVID-19. The segment profit to sales ratio before advertising expenses is about 20% for all brands.
Daichi and Radish Boya have a longer history than Oisix, and their growth was mainly driven by newspaper ads. Following the global financial crisis in 2008, subscription rates for paper media declined in tandem with changes in the economic situation of the company’s target customer base. This meant the same amount of money spent on advertising produced fewer new customers, and the CPA went up even as the LTV per customer went down. Oisix was able to adapt to this change because it mainly uses online advertising. Daichi and Radish Boya were slow to adapt, but since the merger they have adopted the management methods used by Oisix to address the issue. In FY03/19, the Radish Boya business moved into the black on a segment profit-basis.
*1 Cost per acquisition (CPA): Cost of acquiring one customer. Advertising and promotional expenses divided by number of contracts closed.
*2 Lifetime value (LTV): Total value (profit) generated by a customer from when he/she begins transactions with a specific company or brand to when he/she ends such transactions (customer life cycle).
*3 Segment profit to sales ratio: The company uses the term “segment profit” in reference to profit calculated as “sales minus costs that can be linked to each business segment.”
The company quantifies loss-making deliveries as a percentage of all deliveries, and applies this data to structurally reduce such loss. According to the company, a delivery unit will be profitable at the segment profit level before advertising expenses if the spend per order exceeds a certain level.
The lifetime value (LTV) of a customer measured on a profit basis is an important metric in analyzing the profitability of a subscription business model. The company positions components of profit-based LTV as its core KPIs, which it further breaks down into sub-KPIs it has established, and sets targets for individual indicators.
We note that the company’s definition of segment profit is “sales minus expenses that can be linked to business segments;” not “sales minus variable expenses,” which is its common definition in Japanese management accounting.
The company deducts cost of logistics centers and advertising from sales when calculating segment profit, because they can be linked to business segments.
Core KPIs include the number of subscribers, spend per order, and purchase frequency (per-customer order count over a given period), with the number of subscribers having the greatest effect on sales growth. Spend per order remains relatively stable due to the presence of a minimum order amount for free delivery and purchase frequency is generally determined by the lifestyles of the target customer base. Growth in subscriber count is affected by the amount the company spends in advertising.
Until end-FY03/19, the definitions of “number of subscribers” differed by brand, but following the company’s push toward more stringent subscription management, definitions at Daichi and Radish Boya were revised to exclude non-active users.
Companies adopting a subscription model usually focus on lowering the cancellation rate to ensure a steady increase in subscribers (regular customers) who are the source of future profit.
According to the company, subscriptions are cancelled because of a mismatch between the sales price and the price range the customer can tolerate. Some customers also realize after becoming subscribers that regular home deliveries do not suit their lifestyles. The company is working on lowering the cancellation rate by introducing a dedicated committee responsible for improving customer satisfaction.
The number of subscribers to Oisix is rising because new subscriptions are increasing faster than cancellations. Assuming the cancellation rate does not change, in order to sustain growth the company must continue spending on advertising to win new subscribers. Most new Oisix customers are women who adjusted their thinking about the importance of food as a result of pregnancy, childbirth, and child-rearing, and now want to serve safe and reliable food to their children.
It is relatively easy to cancel the company’s services after the end of the initial free delivery period (in the first three months), which usually produces a pattern of a sharp increase in subscribers in one quarter followed by a slowdown in the net increase in the following quarter. According to the company, cancellation rates drop six months into a subscription as customers become accustomed to regular home deliveries and adjust their lifestyles accordingly.
Buying habits of new subscribers are developed soon after joining so it is crucial to lift ARPU at an early stage through measures to promote the purchase of products across various categories. Spend per order does not differ significantly between new and existing subscribers due to the existence of a line where free shipping kicks in. However, purchase frequency is lower for new subscribers until they become established.
The process of commercialization takes one to three months. The company identifies vegetables whose tastiness growers/sellers have difficulty conveying to consumers, and sells them under a new, appealing name. For example, it sells juicy turnips with a peach-like sweetness when eaten raw under the name “Peach Turnip.” Various improvements are made to packaging and other peripheral items. Assuming produce is used for home cooking, it is packaged in a way that they can be preserved better in refrigerators or in quantities that can be finished by small families. Oisix interviews subscribers to identify latent customer needs. For the Kit Oisix service, the company develops menus so that a minimum of 20 different meal options are available at all times to prevent boredom. The company plans and develops processed food products other than Kit Oisix, mainly those processed to the point that they only require the final cooking stage such as grilling. In product planning, the company first determines the product design and estimated selling price based on a price range at which the product is likely to sell. It sets a fair gross margin and then works out procurement.
Promotions are mostly conducted online (listing ads and social media ads), primarily to attract new customers. The company also advertises its brand through TV commercials.
The company procures directly from producers. It has contracts with about 1,200 producers for Oisix, 2,700 for Daichi, and 2,400 for Radish Boya. Excluding overlap, the total comes to about 4,000 as of May 2021. The company also procures from around 5,000 food processing companies. The company previously faced a shortage of producers, but the merger with Daichi and Radish Boya largely resolved the shortage, and the company noted that procurement is no longer a bottleneck to business expansion as of November 2020. According to the company, the scale of producers tends to expand as the company grows.
- Each brand has its own standards and, generally speaking, compliance with these standards raises producers’ costs compared with traditional farming that uses agrochemicals and chemical fertilizers.
- Each brand buys from different suppliers because of differences in their safety and quality standards, although there is overlap of about 50% between Daichi and Radish Boya, which have similar standards.
- The company cultivates new suppliers mainly through referrals from existing suppliers, plant nurseries and seed suppliers, and fertilizer manufacturers.
The company has a structure for supplying fresh produce for as long a period as possible by working with producers all over Japan, because harvest locations change with the seasons. Weather conditions can make the difference between large and small harvests. If a harvest is poor, the company buys from suppliers in other regions. If a harvest is larger than expected, the company is not obliged to buy more than the contracted volume.
When it comes to forecasting demand, the company reaches a general agreement with producers on approximate order quantities and prices some 3–6 months prior to actual orders being placed. Buying prices are fixed when these preliminary agreements are put in place. This arrangement works to the benefit of producers by providing clarity with regard to their expected future income, while offering the company the benefit of being able to buy at lower prices when market prices rise above the agreed price. (Put another way, the company has assumed the price risk.) From the consumer’s standpoint, the company’s prices are stable regardless of market prices, so few customers switch to other companies because of short-term price fluctuations. Since doing business with the company allows producers to forecast their revenue, the company says they are more likely to agree to increase the order volume when needed. Thus, the company does not expect supply-side constraints based on usual rates of business growth.
The company places individual orders with suppliers after receiving orders from customers and does not hold inventory at distribution centers with the exception of items that are easy to handle and have long shelf life.
The majority of the company’s purchases are made directly from producers. Processed foods are planned by the company, but manufactured by contract suppliers.
Japan Agricultural Cooperatives (JA): Cooperatives formed in the spirit of mutual aid to protect and improve farmers’ business operation and livelihoods to create a better society (JA refers to regional cooperatives and JA Group, an administrative body). JA provides training on agricultural business and lifestyle management, organizes joint purchases of business and home supplies, oversees joint sales of fresh produce and livestock products, runs savings and loan services (business and personal loans), establishes facilities for communal use, and operates mutual aid organizations to prepare for disasters.
Since unprocessed fresh produce is difficult to differentiate from a functional perspective and has a limited shelf life, farmers produce large volumes of standardized produce for distribution via JA for sale at supermarkets and other retailers.
Procurement from overseas: Although the company sources some items overseas, it currently thinks that overseas procurement is not economically viable because of the high cost of transportation to Japan (an island country) and quality control requirements for fresh produce.
As of November 2021, each brand had its own distribution center and the facilities have not been integrated. The roles and functions of distribution centers vary from brand to brand.
All of the company’s distribution centers are leased. Oisix operates its own distribution centers; Daichi and Radish Boya outsource distribution with the exception of frozen foods. Oisix initially used third-party distribution centers but subsequently switched to running most of its own distribution centers after the company it had outsourced to suddenly went out of business. For order picking, the company has created efficient distribution center operations through the use of a specialized digital picking system dedicated to handling food delivery.
Distribution costs break down into variable expenses (personnel expenses, which have a large weighting), and fixed expenses such as rent, which have a relatively small weighting.
In Q1 FY03/21, the company established a satellite center devoted to the small SKU service Sakutto! Oisix in Fujisawa (in Kanagawa Prefecture, like Ebina) in response to the sharp increase in demand for Oisix amid the COVID-19 spread. It also uses part of Radish Boya’s Zama Station for trial kits.
As an interim solution before the new Ebina Distribution Center opens (see below), the company built a new satellite center in Sayama (Saitama Prefecture) in October 2020. It is expected to cover capacity from Q4 FY03/21 onward until the new Ebina Distribution Center starts operation in October 2021, with an up to 50% increase in capacity (including increased shipping capacity of existing distribution centers due to the start of operation of Sayama Station). The company plans to use the Sayama satellite center only temporarily, which will increase logistics costs by about JPY15mn per month while in operation as it will conduct interfacility product transfers with Ebina Distribution Center.
The new Ebina Distribution Center for the Oisix brand is due to open in September 2021, with a planned tripling of capacity versus FY03/20. This will consolidate all distribution for the Oisix brand. As of November 2021, the new Ebina Distribution Center was in pilot operation and is scheduled for full operation in early 2022. The Fujisawa/Sayama satellite center is to close on a phased schedule and the Zama Station returned to exclusive use by Radish Boya when the new Ebina Center opens. After the new Ebina Center is up and running, the current Ebina Center will be repurposed as the Oisix Food Rescue Center, which will specialize in reducing food loss, such as processing imperfect fruit and vegetables. This will not require large capital investment, because the company only needs to invest in machinery and equipment to repurpose an existing facility.
In addition, when it released its Q1 FY03/22 earnings results, the company announced that it would invest about JPY4.0bn to expand its freezer facilities. It plans to triple its frozen shipment capacity versus FY03/21, with the new facility starting operation in fall 2023.
|brand||No||Distribution base(s)||Temperature zones||Function||Last mile delivery|
|Oisix||1||ORD Ebina Station||Yes||Yes||Yes||Packing and delivery base for Oisix||-||Yes|
|2||ORD Kit Kitchen (in the Ebina Station)||-||Yes||-||Manufacturing function for Kit Oisix||-||-|
|3||Oisix Food Rescue Center||-||-||-||Processing center that specializes in reducing food loss||-||-|
|Daichi||4||ORD Narashino Station||Yes||Yes||Yes||Packing and delivery base for Daichi wo Mamoru Kai||Yes||Yes|
|Radish Boya||5||ORD Sapporo Station/Hokkaido office||Yes||Yes||-||Packing and delivery base for Radish Boya in Hokkaido||Yes||Yes|
|6||ORD Sendai Depository/Tohoku office (w/o logistics)||-||-||-||Delivery base for Radish Boya in Tohoku||Yes||-|
|7||ORD Itabashi Station/East Metropolitan office||-||Yes||Yes||Packing and delivery base for Radish Boya in northern metropolitan area||Yes||-|
|8||ORD Zama Station/West Metropolitan office||Yes||Yes||Yes||Packing and delivery base for Radish Boya in southern metropolitan area and Shizuoka||Yes||Yes|
|9||ORD Ichinomiya Depository/Chubu office (w/o logistics)||-||-||-||Delivery base for Radish Boya in Tokai||Yes||-|
|10||ORD Higashiosaka Station/Kansai office||Yes||Yes||Yes||Packing and delivery base for Radish Boya in Kansai||Yes||Yes|
Capacity utilization rates of distribution centers vary between brands and locations. Due to the increase in demand associated with the spread of COVID-19, logistics capacity of the Oisix brand temporarily tightened in 1H FY03/21, but this was resolved in 2H.
As a rule, the company does not hold inventory of fresh produce at distribution centers, because orders are placed with suppliers after the company receives orders from customers. For products such as milk and eggs for which there is a risk of damage, the company orders in volumes that reflect the risk. As an exception, the company holds inventory for products that can be stored at room temperature, such as bottled water.
Deliveries from producers to distribution centers take about a day, dispatching orders from distribution centers takes another day, and last mile delivery to customers takes another day, so the total lead time is generally about three days. Daichi and Radish Boya have shorter lead times for last mile delivery, because they charter delivery trucks rather than using regular delivery services and thus orders delivered to the distribution center in the morning can be delivered to customers the same day. Because this is generally less time than it takes for fresh food to get to the consumer via traditional channels (going from the market, to the wholesaler, to the retail outlet, and then to the consumer), the company is able to deliver products that are fresher than those that can be found in the average grocery store.
For Oisix, last mile delivery is provided by Yamato Transport (Yamato Holdings’ home delivery service; see reference below on Japan’s home delivery business). The company uses chartered delivery trucks for Daichi and Radish Boya.
Differences in distribution centers and last mile delivery between brands are mainly attributable to the difference in when the brands were founded. Daichi (founded in 1975) and Radish Boya (1988) have a longer history than Oisix, and considering the limited network of refrigerated home delivery services and the associated costs back then, the two brands had no option but to work with local delivery companies to build their own networks and gradually extend them. In contrast, Oisix was founded in 2000, when major home delivery companies already had their own refrigerated delivery networks. Thus, the brand was able to utilize these networks and quickly expand into a nationwide service.
The company commented that it uses Yamato Transport in addition to its chartered trucks, because Yamato offers the best quality of service. For chartered delivery, the company works with transport companies in each region to set up regular delivery routes, which are covered by dedicated delivery trucks. These trucks are marked with the name of the brand, helping to raise its profile in the community.
The home delivery business in Japan: Japan has a highly developed home delivery industry. Major home delivery companies are Yamato Holdings (TSE1: 9064), SG Holdings (TSE1: 9143), and Japan Post (TSE1: 6178). A parcel dispatched from Tokyo can be delivered to most regions on the next day and to all but the most remote locations within two days. Many services allow senders and recipients to specify delivery time in a range of a few hours. In Japan, the parcel will not be left outside if the recipient is out. The driver leaves a redelivery request form and returns the parcel to the depot. Specifying the time of delivery minimizes the risk of non-delivery as well as being convenient for the recipient. With the growth of online sales, many residential properties now have courier boxes so that items can be delivered when the recipient is out. Delivery costs vary according to the size and weight of the parcel, distance, and whether or not the sender is a major customer. A standard parcel can be delivered for less than JPY1,000, but the rise in delivery costs in recent years due to the increase in delivery volume and labor shortage has become a widespread problem.
The company sources food products and ingredients focused on food safety (such as organic vegetables, specially cultivated agricultural products, and additive-free processed foods), and sells them to consumers online or via mail-order catalogs. The basic model is the same for Oisix, Daichi, and Radish Boya. The company’s products are high value-added and suppliers are limited to producers (farms, etc.) and food processing companies that can satisfy the safety and quality standards established by Oisix ra daichi. This high bar pushes both purchase and sales prices into the premium range. Although the company does not particularly target certain geographical areas in its marketing strategy, most of its customers reside in major cities. We understand this is because major cities have a larger percentage of high-income households and a greater need for buying food online.
Oisix is a service that was created from the user’s perspective, Daichi from the producer’s perspective, and Radish Boya from an environmental perspective (see History section of each brand below). This accounts for the differences in the features and positioning of each brand. The company plans to maintain all three brands and pursue synergies in indirect functions such as marketing and fulfillment. According to the company, there is little migration of customers between brands.
|Target user||Two-income households with young children||Elderly two-person households||Households committed to housework and parenting|
|Concept||Quick and easy meals you can be proud of||Sense of healthy life come in handy||Enjoyable lifestyle through cooking|
|Main customer segment (by age)||30s and 40s||Over 55||40s and 50s|
|How to join||Mostly online||Mostly online||Online and door-to-door sales|
|How to order||Online only||Online, telephone, mail order catalog||Online, telephone, mail order catalog|
|Last mile delivery||99% outsourced to Yamato Transport||85% own delivery service||95% own delivery service|
|No. of subscribers||333,850||45,196||65,320|
|Average spend (JPY)||6,098||8,425||6,402|
|Purchase frequency (x)||2.11||2.73||3.15|
Dedicated to the user’s perspective from the start, the company chose the name Oisix for the service based on the results of a survey of potential customers.
At the time of its inception, the company formed an alliance with the trading house Nissho Iwai Corporation (now Sojitz; TSE1: 2768), gaining personnel support and referrals of supplier farms from the Nissho Iwai organic products team. In the early days of the company, most members of the management team and most employees had little knowledge of agriculture. However, this inspired them to help consumers learn more about food production and bring them closer to producers by selling nonstandard/imperfect vegetables that were typically discarded rather than sold and types of vegetables that farming families produced for their own consumption only, due to the difficulty of maintaining freshness in conventional retail channels.
Oisix has a policy of identifying products consumers want to buy instead of selling what producers want to sell. Based on this policy, the company will not choose produce because it had a good harvest, but rather, estimates orders based on customer demand, and coordinates the timing and volume of harvest with producers.
Oisix sells products that enable busy families juggling work, housekeeping, and parenting to enjoy delicious and varied meals that are easy to make. The brand’s safety and quality standards can be summed up as “ingredients that producers feel comfortable giving to their own children.” It handles vegetables that are at least certified as “specially cultivated agricultural products” or meet an even more stringent standard. All processed food must be free of artificial colorings and preservatives, and the main ingredient must be GMO-free. All fruits and vegetables, dairy products, eggs, fresh fish, and meat are tested for radioactivity before shipment.
“Specially cultivated agricultural products” are grown by methods that comply with the Ministry of Agriculture, Forestry and Fisheries (MAFF) “Labeling guidelines regarding specially cultivated agricultural products.” The use of agrochemicals and chemical fertilizers targeted for reduction must be 50% or less than levels customarily used in the region where the product is grown.
The company’s response to the Great East Japan Earthquake: We summarize the company’s response to the Great East Japan Earthquake, because it is a specific example of its action policy. After the earthquake and the disasters that followed, the company did its utmost to continue operating, but experienced disruptions in supply and delivery as a result of distribution networks. The nuclear power plant accident in Fukushima caused radioactive contamination in surrounding areas and consequently food contamination. The company set up a testing structure based on the Ministry of Health, Labour and Welfare’s 2002 “Manual on radiation measurement of food in emergency situations” to confirm for itself that the food it sells is what “producers feel comfortable giving to their own children” and began testing all of its product items on March 18, 2011, shortly after the disasters struck on March 11.
Every Thursday at 19:00, Oisix places a recommended list of items for the weekly subscription boxes in the customers shopping carts, to which they can add or remove products as necessary before the deadline.
The company generally has more than 1,000 products available. Fresh produce accounts for just over 20%, Kit Oisix about 20%, and other perishables (such as dairy and eggs) 15–20% of sales.
Products are delivered on a day of the customer’s choice by third-party delivery service Yamato Transport. Delivery is free on orders over JPY6,000 (excluding tax), lowered from JPY8,000 in February 2019 to encourage light users to buy more frequently.
The deadline for orders is generally 10am two days before the delivery date (except for deliveries on Sundays, Mondays, and Tuesdays and those to remote locations for which the deadline can be as early as 10am five days before the delivery date). Customers can cancel the week’s delivery if they wish, provided it is before the deadline. This ordering method allows customers to plan their orders around recommended products, reducing the time it takes to plan menus and helping them make new discoveries in each order. Orders can be customized, which minimizes the stress of customers ending up with products they do not need or not receiving items they do need. Meanwhile, the method helps the company because it provides a guaranteed sales channel provided customers do not cancel. As the supply of agricultural products is not always stable, the system also allows the company to make adjustments by including or excluding an item from the subscription box depending on availability.
The company refers to removing an item from the subscription box as abandonment. Abandonment refers to items that subscribers have decided not to buy. Each customer makes a maximum of 52 selections per year, which enable the company to make recommendations that suit each customer’s food preferences.
Customers can choose from four subscription box plans and switch between them at any time. The default option at registration is the Kit Oisix menu plan for two people.
Kit Oisix menu plan: Main contents are the Kit Oisix meal kit consisting of prepared ingredients and seasonings, and food items that help save time, such as pre-sliced vegetables. The plan caters to customers with busy lifestyles who wish to make tasty meals. In addition to the previous options of two or three servings per meal, a new four-serving option has been added (doubling the two servings option) to accommodate the recent trend of sheltering in place due to COVID-19.
“Delicious selection” plan: This plan provides an all-around combination of seasonal fresh produce, unusual vegetables, and easy-to-use daily goods. Kit Oisix is not part of this plan. This plan is for customers who like to enjoy tasty vegetables.
Chanto Oisix plan: This plan provides an evening meal recipe and ingredients set combining vegetable-based ingredients for three or five days (Chanto Oisix) as well as time-saving ingredients. This plan is for busy customers who like to enjoy tasty vegetables while saving time. Customers can choose between three-day and five-day plans.
“Mothers and expectant mothers” plan: This plan is centered on products that have undergone radioactivity testing, offering organic vegetables and other ingredients that can be used for baby food, with monthly advice from a nutritionist for specific cases such as pregnancy and children. This plan is for expectant mothers and those with young children.