Overview of Seven & i Food Systems We aim to provide customers with supreme taste, impressive quality service and pleasant dining experiences, continuing to challenge ourselves and drawing on synergies within our group. Seven & i Food Systems was established in 2007 as a of non-Seven & i Holdings group, where we sell taiyaki result of consolidation and restructuring of food service (fi sh-shaped waffl es with sweet fi lling), takoyaki (octopus operations of the Seven & i Holdings’ group into the balls) and other fast food items that are cooked in front current three businesses: restaurant business, fast food of the customers. In the dining service business, we have business and dining service business. been continuing aggressive expansion of its business In the restaurant business, we have been focusing on outside of our group. the rejuvenation of existing restaurants. Accordingly, We will pursue tasty and quality meals and superb we have been working to improve customer service and service that satisfy and exceed customers’ expectations, pricing to better meet customers’ needs, and have started while continuing to challenge ourselves and drawing on to develop new brands. In the fast food business, we have synergies within our group. opened our small, open-front restaurants in the facilities Seven & i Holdings Denny’s Japan Co., Ltd. Famil Co., Ltd. York Bussan K.K. • Operating family restaurants • Operating family restaurants primarily • Operating fast food restaurants located in Ito-Yokado stores within Ito-Yokado stores • Operating employee cafeterias for businesses within and outside of the group Seven & i Holdings Seven & i Food Systems Restaurant business Fast food business Dining service business Seven Promises (our creed) • Safety and reliability • Delicious • Hospitality • Cleanliness • Comfortable atmosphere • Trust and thoughtfulness • Strive toward future 74 Seven & i Holdings Our CSR focus Developing systems to provide to diversifying menu items, our gas and total energy customers with confi dence in our meals consumption has been increasing in recent years. To Seven & i Food Systems is dedicated to delivering a reduce kitchen’s energy costs and environmental impact, pleasant dining experience that our guests can enjoy Denny’s has started to introduce all-electric restaurants without any concerns. We strictly examine ingredients, since 2002, shifting from conventional gas-powered additives, allergens, processing and preparing procedures kitchen facilities. against our quality requirements specifi ed in the Seven-Eleven Japan Statement of Business Terms. With regard to vegetables Reducing and recycling food waste served in our Denny’s restaurants, for example, we We recognize each of our restaurants needs to minimize require contract farmers in Japan and abroad to prepare and appropriately dispose of food waste. These are Cultivation Plans, and closely monitor fertilizers and other important activities for environmental protection. Denny’s chemicals’ application throughout the entire process has been working to promote appropriate disposal, until harvest. We also obtained the certifi cation of an composting and recycling of food waste by operating international quality control standard ISO 9001, and food waste recycling system jointly with SEJ (p.34). Famil focus on employee education and hygiene control in our and Poppo have also started recycling of food waste by restaurants. using Ito-Yokado’s system. Ito-Yokado Introducing all-electric restaurants to reduce CO2 emissions Most Denny’s dishes are cooked in our restaurants’ kitchens to be served in optimum condition. Mainly due Corporate profi le (as of February 29, 2008) Establishment: January 2007 Paid-in capital: ¥3.0 billion Headquarters: 8-8, Nibancho, Chiyoda-ku, Tokyo 102-8415, Japan Total sales: ¥113.4 billion Nature of business: Operation of restaurants, fast food and dining Number of employees: 16,883 service businesses Number of restaurants: 1,047 Millennium Retailing Business outline Restaurant business Fast food business Dining service business Aiming at greater brand value through Launching one-item specialty Aggressively pursuing expansion into good taste, service and atmosphere restaurants outside of group companies Operation of Denny’s and Famil (located Poppo operates fast food (such as takoyaki We aggressively seek and capture new in Ito-Yokado stores) restaurant chains octopus balls, imagawayaki waffl es and business opportunities. In addition to is the primary activity of our restaurant ramen soup noodles) restaurants mainly employee cafeterias of group companies, business. We are intensifying our efforts located within Ito-Yokado store facilities. we have been expanding outside of our to offer a relaxed dining experience to our Under the themes of customers’ health, Group, such as in-house cafeterias of guests, while keenly attentive to the basics safety and reliability, we deliver fast other corporations, schools and nursing of our operations—good in quality, service, food items made from fresh and healthy care facilities. cleanliness and atmosphere. ingredients together with big smile. York-Benimaru Total sales Number of restaurants Employees by type (¥ billion) (Stores) Regular employees 140 1,200 10.7% 1,063 1,049 1,047 123.6 121.2 120 1,000 113.4 100 800 0 0 Part-time employees 2005 2006 2007 (FY) 2005 2006 2007 (FY) 89.3% Notes: (1) Sales fi gures and the number of restaurants for FY 2005 and FY 2006 represent the simple summations of relevant data of Denny’s Japan, Famil and York Bussan, which were merged in FY 2007. (2) Reclassifi cations of the three predecessors’ FY 2007 semiannual sales were made to calculate the full-year sales. Seven & i Food Systems CSR Report 2008 75 CSR at Seven & i Food Systems Food Safety and Reliability My children like to eat out. How safe are the ingredients of your menu items? We only purchase safe and reliable ingredients that meet our quality standards in the Statement of Business Terms. Rigorous ingredient management and Building traceability systems based hygiene control to ensure food safety and on “Cultivation Plans” and “Cultivation reliability—our top priority Records for Registration” Consumers today have a keener interest in food safety Producers’ visibility, or traceability, is an important and reliability, and check the production histories, e.g., element of our ingredient sourcing policy at Seven & origins, ingredients and producers, of food items they i Food Systems. Th erefore, we are building systems purchase. In response, businesses need to off er reliable to accurately record and manage product origins, products that can bring higher levels of consumer production processes and distribution channels. confi dence, rather than merely observing applicable For instance, we centrally control the quality and laws and regulations. At Seven & i Food Systems, traceability of vegetables to be served in Denny’s food safety and reliability has been our fi rst priority as restaurants by using Cultivation Plans, and Cultivation specifi ed in the fi rst item of our corporate creed “Seven Records for Registration. All the producers of these Promises” (p.74). As a food-related company, we ingredients, whether in Japan or abroad, are required believe ensuring food safety and reliability is the most to submit these documents. We review a Cultivation important responsibility to the society. We therefore Plan to verify the quality of the ingredient, which spare no eff orts to implement thorough hygiene includes the overall production schedule plan from control, purchase safe ingredients, and serve reliable soil preparation, seed planting to harvesting; fertilizer food that our customers enjoy with confi dence. application plan; and details of planned pesticide Strict ingredient inspection using quality use (purposes, name of standards in the Statement of Business Terms pesticides, application timing, and amount, We purchase a wide-variety of food items from various etc.).We then reexamine farms and manufacturers throughout a year in order the ingredient quality to off er delicious meals made from fresh, in-season using a Cultivation Record (From top) Cultivation Plans, Cultivation Record for Registration, ingredients. for Registration, in which and Annual Relay Sourcing At Denny’s, which uses approximately 600 actual processes performed Schedule ingredients, we strictly inspect prospective items are recorded. against the Statement of Business Terms specifying our quality requirements regarding raw ingredients, Traceability systems for fresh produce at Denny’s additives, allergen-content, processing and preparation Fruit and vegetables served in Denny’s restaurants are grown in a procedures, and quality control performance. After safe and well-planned manner. this process, we only purchase and use ingredients that Growing and harvesting are proved to have “Denny’s quality.” In addition, our sourcing and quality control personnel visit suppliers’ factories on a regular basis to monitor the quality and Sorting according to hygiene control during their manufacturing and storage restaurant destination phases. Such on-site inspections are performed Storage in production sites approximately 400 times a year in Japan and abroad, including site visits to Distributing to restaurants observe manufacturing processes of new products On-site inspection at a supplier’s Arriving at Denny’s or by new suppliers. factory warehouse 76 Seven & i Holdings Freshness maintenance with well-planned ISO 9001-based quality control management (Scope