Cultivating relationships with customers

Relationship with Customers

In order to keep growing, we must continue to be our customers’ most reliable partner. To this end, we will continue to pursue high quality through rigorous R&D efforts, ensure the proper disclosure of information, and strengthen partnerships with suppliers on a global scale.


Quality management

The Takasago Group has established "Corporate QC policy", in order to deliver products of trusted quality that satisfy our customers under our corporate philosophy, which includes all affiliated companies, domestic and overseas, with daily effort and commitment.

The Quality Assurance Department, located in our main offices in Japan, directly connects to top management in order to ensure independence from manufacturing, sales, and other departments. In addition, the chain of command system in the Quality Assurance Office in each factory in Japan directly connects to the Quality Assurance Department, so that fair quality assurance is ensured.

Corporate Quality Assurance Headquarters works very closely with affiliates and promotes the enhancement of the global Quality Assurance framework.
It provides for the unified management of information on safety requirements and regulations, such as national regulations and customer restrictions, and promotes the standardization of testing and inspection methods.
In terms of quality management systems, Takasago establishes requirements and provides support to all manufacturing sites with regards to two distinct systems. ISO 9001 has been implemented in headquarters-related divisions, as well as fine chemical and aroma ingredient manufacturing sites on a global basis. In addition, food safety management systems (FSSC 22000 / ISO 22000 / BRC) are in place at Takasago flavor manufacturing facilities.

Takasago promotes enhanced quality and service by effectively operating in the areas described above in order to support our customer’s business as a global partner.


Research & Development

Based on our corporate philosophy of "Contributing to Society through Technology", our R&D contributes to the improvement of QOL (Quality of Life) by developing unique and superior technologies and products through organically and functionally integrating three types of innovations (“concept innovation”, “product innovation” and “processes innovation”) and open innovation in collaboration with external partners. In recent years, global warming caused by climate change is becoming more pronounced. As part of our important efforts to solve these global challenges addressed by the SDGs, we promote environmentally friendly R&D with green chemistry always in mind. To reduce environmental impact, we are focusing on green chemistry such as utilizing our original catalytic technology, white biotechnology, designing ecofriendly processes, and considering wastewater to facilitate efficient use of water and reduction of energy and greenhouse gas. In addition, we are also actively working to explore and utilize renewable raw materials, reduce the use of natural flavor ingredients by developing alternative ingredients, and utilize unused resources to use natural resources more efficiently. We will continue to contribute to the realization of a sustainable society by resolving various social issues through these innovative R&D activities that consider SDGs.


Hiratsuka R&D located adjacent to the Hiratsuka Factory

 Hiratsuka R&D located adjacent to the Hiratsuka Factory

Green Chemistry - Process Innovation

Our R&D activities and manufacturing are oriented toward Green Chemistry, based on the well known 12 principles. One of the key activities is to fully utilize continuous flow processing, realizing safer operation with less energy. Takasago has successfully implemented several continuous flow processes including pipe flow reactor and CSTRs (Continuous Stirred-Tank Reactors). To realize them, the process development function in R&D has played a key role from process design to actual implementation. The importance of this function is not limited to the continuous flow implementation, but every new material launch. In this context, Takasago strives to strengthen this function. The process development department was established in 2017 as an independent laboratory which works closely with fine chemicals and aroma ingredients research groups. A wider green chemical viewpoint can be incorporated from the very early stage of research.
Some of the viewpoints from chemical engineers include safety and energy saving, which are key components of green chemistry. At the process development laboratory, reaction data are collected by using special instruments, giving thermodynamic data for both safety assessment and energy control. These data with interpretation are promptly fed back to the research team, helping them to optimize reaction conditions. Under this circumstance, the development period of the processes is reasonably shortened by considering green chemistry. While the new organization works as expected, instruments to generate kinetic data are fully engaged. To further facilitate these activities, Takasago is aware that enhancing this capability is necessary. As such, Takasago began investing new infrastructure. Installing energy saving technology in new facility design will incorporate greener processes from the start and contribute in more environmentally friendly development. The above mentioned approach coupled with introduction of new catalyst and natural aroma will further enhance Takasago's capability to contribute to realizing a greener world.

Green Chemistry Process Innovation

Natural Aroma Ingredients

As a company that started its business in Japan, Takasago has heritage based on Japanese culture called “Mottainai” for reducing waste and recycling. White biotechnology is another key driver in green chemistry. This takes advantage of enzyme or microorganism biocatalysts, which fulfills many key criteria of green chemistry and contributes to SDGs. Increasing demand for natural flavors also drives new R&D using biocatalyst.
As for captive natural specialty R&D, the targets are requested by flavorists, the production process that complies with EU natural regulation and kosher is investigated using microorganisms and enzymes. We cooperate with Takasago Food Products Co., Ltd. And US-based Centre Ingredient Technology, Inc. (CIT), which joined our group in 2016. They will become a leading manufacturing hub for bioprocess production of our natural aroma ingredients. CIT is a high-tech production and pilot production facility which uses fedbatch cultivation with accurate cultivation control and monitoring, downstream processes with consideration of production safety and recovery by thin film distillation. Our key natural products manufactured at CIT include gamma-decalactone, gamma-octalactone, gamma-nonalactone, phenylethyl alcohol, hexanal and other specialties. In 2019, we successfully launched captive natural specialty by white biotechnology which will significantly add value to our flavor compounding.

Cultivating relationships with suppliers

Our Supply Chain

Procurement Model at a Glance

Takasago values sustainability in its business activities. It is, therefore, essential to source raw materials used by its all business units in a responsible way, in full alignment with the group values and needs of both clients and civil society’s aspirations. Takasago uses approximately 13,000 different raw materials sourced from more than 1,000 suppliers all over the world. About 4,000 of those raw materials are natural ingredients derived from natural sources such as fruits, vegetables, plant roots, leaves and flowers. On the other hand, approximately 9,000 of the raw materials are synthetics, made by sophisticated chemical technologies. Their main starting materials can be of natural origin like wood or synthetic origin such as natural gas or naphtha. They can provide a unique sensory profile which does not exist in nature as well as replace natural ingredients to decrease usage of protected ingredients such as musk and ambergris. To timely supply of high-quality raw materials with appropriate prices to our facilities around the world, we are promoting procurement activities using our global network. In order to build fair and trustful relationship with worldwide business partners for sustainable procurement, we have established a Corporate Procurement Policy, Corporate Procurement Guidelines, and Takasago Supplier Code of Conduct.


Corporate Procurement Policy

To clarify the responsibility in all procurement activities involving the Takasago group, we have revised our Corporate Procurement Policy this year. Takasago accomplishes “responsible sourcing” by establishing a corporate procurement policy, and by sharing values with business partners and their cooperating businesses not only in raw materials’ supply chain but also in procuring all goods and services necessary for the business.

Foreword

Corporate Procurement Policy is established in alignment with Takasago’s core values and corporate philosophies and is openly shared with our suppliers. With this, we strive to realize responsible procurement in sourcing raw materials, products and services in the conduct of our business. As business partners, we expect our suppliers and their suppliers to respect and abide by our Corporate Procurement Policy.

Corporate Procurement Policy

  • ● Pursue the three key and basic elements of quality, cost, and stable supply
  • ● Observe and abide by all relevant laws, respect human rights, remain fair, open and impartial in all our dealings and always have sustainability and preserving the environment
  • ● Recognizing and valuing regional cultures in building partnerships with the suppliers

Corporate Procurement Guidelines

Corporate Procurement Guidelines embody Corporate Procurement Policy.
The Guidelines include fundamental subjects such as compliance, fair trade, anti-corruption, human rights and environmental protection, to be align with the concept of responsible sourcing.
In the Takasago group, all staff in charge of procurement activities, including day-to-day purchasing at each local site, follows the Guidelines. To ensure its implementation, Global Procurement Training includes sessions on Corporate Procurement Guidelines as well as other basic corporate policies.

Takasago Group Supplier Code of Conduct

As we emphasize global environment, we respect business partners who value environmental and social responsibility to maintain a high level of trust from society. To ensure business partners understand our policy and our expectations, we have established Takasago Group Supplier Code of Conduct. It is included in our questionnaire and ensure their full understanding before dealing with Takasago.

You can find the full Takasago Group Supplier Code of Conduct here.

We also established “Takasago Responsible Sourcing Policy” which consists of concrete guidelines and questionnaires. By these, we would like to share our vision, objective, and commitment with suppliers to work towards the realization of Responsible Sourcing.

Click here to see Forest guideline.

Global Procurement Team

Teamwork is one of the important values in the Takasago group.
We have established a Global Procurement Team to consolidate procurement activities. Additionally, in today’s VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) world, mutual-aid between affiliates is becoming more important from the point of view of BCP (Business Continuity Plan). The Team currently contains delegates from 11 global production sites. As we handle various raw materials from all over the world, mostly having different cultural background, our presence at their source is one of the major keys to ensure stable supply. As such, each affiliate is responsible for supplier relationship management as an international procurement office of the Takasago group.
Based on the concept of standardization, including harmonization of raw materials, we continue to explore every possible opportunity for comprehensive optimization of raw material management. Global RFQ (Request for Quotation) is one example of such activities. When it is necessary to manage the availability of raw materials due to global volume constraints, the Takasago team globally shares inventory within the group. In addition to a regular annual meeting at the headquarters, our global procurement team schedules various workshops, regional meetings, visits, and training via a matrix-like structure by region, ingredient category, or business type under the corporate initiative.

Training Session

Global Procurement Team members have the opportunity to attend a training session at the headquarters in Japan.
These have been conducted the session twice a year, with the aim of deepening the Teams understanding of corporate medium-term management plan, corporate procurement policy and guidelines as well as intergroup networking and building teamwork through face-to-face meetings. Even under current challenges due to COVID-19, we are trying to continue providing the opportunity for trainees via video conference etc.

Training Session

Voice

Yasutada Miyato in Takasago Europe Perfumery Laboratory S.A.R.L. (France)

I am working in France, engaging in raw material procurement and sustainability matters in Europe. Europe is the origin of many authentic fragrance and flavor ingredients. Access to Africa where there is a large number of precious ingredients is easy. Working in such region is convenient to grasp market situations. In addition, meeting people directly locally is a wonderful opportunity to understand their cultural background.
I believe this kind of cooperation will help us to make a stronger and more respectful relationship.

Voice

Winnie 王蒨 in Shanghai Takasago-Union Fragrances & Flavors Co., Ltd (China)

Training for me is a great chance to get a general overview of our global internal organization and workflow in a very short time, and understand more about the challenges and issues faced by each affiliate.
It is also an excellent opportunity for me to communicate with everyone face-to-face.
I believe that with more discussion and information exchange, we can help each other to improve work processes in the future.

Responsible Sourcing

In June 2017, Takasago signed the UN Global Compact (UNGC). We therefore continue our efforts to align with the UN Global Compact's Ten Principles in the areas of human rights, labor, environment, anti-corruption and support UN’s 17 SDGs. We are striving for sustainable procurement, focusing on compliance with laws in each country, respect for human rights, environmental conservation, fair business practices, involvement and development of local communities. To that end, in 2019 Takasago Responsible Sourcing Policy was confirmed by Group Ecocert (EEC/ E&H) to be in line with global standards and practices of ISO26000, and SMETA (Sedex Members Ethical Trade Audit).*1
Our Responsible Sourcing Policy and Supplier Code of Conduct are linked. Based on the Policy, we are investigating the risks and potential impact of our procurement activities in various fields of "human rights, labor, environment, and anti-corruption". If a possibility of negative influence is confirmed, we will promptly plan for improvement and take measures in cooperation with suppliers and other stakeholders for remediation.

*1 An audit methodology, providing a compilation of best practice ethical audit techniques.

1) Supplier Relationship Management

The Takasago group conducts international procurement activities utilizing the global procurement organization with Procurement Department in the headquarters at the center. Through global procurement activities, we will continue to contribute not only to our customers but also to all stakeholders by reliable supply of high-quality, safe, and secure products. For this purpose, we utilize dialogue with suppliers, supplier questionnaire, Sedex*2 SAQ, Responsible Sourcing Questionnaire, and RFQ (Request For Quotation) to conduct supplier relationship management as stated below.

  • Build strong, mutually beneficial, and transparent partnerships with suppliers.
  • Maintain and strengthen a system that can stably and reliably procure high-quality raw materials.
  • Mutually understand shared goals through dialogue and RFQ with suppliers.
  • Implementation of "Takasago Supplier Code of Conduct" and “ Takasago Responsible Sourcing Policy”. Both emphasize on corporate social responsibility, sustainability, environment and respect for basic human rights.
  • Periodic supplier surveys utilizing questionnaires are conducted.

According to the supplier questionnaire results in 2019, we confirmed all our business partners acknowledged as Takasago global suppliers meet the social and environmental standards.

*2 An online platform for sharing information on ethical and responsible practices.

2) Collaboration with 3rd Party Organization

In order to pursue responsible sourcing, the Takasago group has joined social organizations promoting sustainable and ethical sourcing. We improve procurement taking into consideration environmental conservation. We have become a member of RSPO (Roundtable on Sustainable Palm Oil)*3 and JaSPON (Japan Sustainable Palm Oil Network), *4 and attended a sustainable palm tour in Malaysia to understand the sustainability in palm oil supply chain. In 2019, our affiliate in France received RSPO certificate for Mass Balance as the first step in producing fragrance sustainably. RSPO team including Sales, Supply Chain, Regulatory, and QA in the US as well as France RSPO team are working for the next target of receiving RSPO-MB certificate for the New York facility in 2020.

Training Session

In early 2016, we joined Sedex (AB membership) enabling assessment of suppliers in the areas of work environment, health and safety, environmental management, and ethical business practice. Using the world’s largest collaborative platform for sharing supply chain data globally, along with a separate Supplier Questionnaire, we will ensure an ethical supply chain. By 2019, relationships with around 180 major suppliers overseas and in Japan were established on Sedex. We confirm whether new business partners are Sedex members when starting transactions, and encourage them to become a Sedex B member if they are not.
We continue to promote activities for prioritized existing suppliers to attend Sedex for sustainable relationship.

*3 A social organization trying to transform the palm oil industry into a sustainable industry with fewer burdens on the environment.
*4 A platform for sustainable procurement and consumption of palm oil in Japan.

3) Sustainability: Evolution of Our Sourcing

To enable us to realize sustainable procurement, we developed a sourcing assessment tool; TAKASOURCE.
This is a matrix for evaluating the sustainability of our sourcing, validated by Group ECOCERT, based on the three pillars of sustainable development: environment, economy, and society. This allows us to identify a list of priority raw materials which we must reduce the related risks.

〈More than 500 raw materials sources and 60 suppliers have been assessed around the world by TAKASOURCE〉

TAKASOURCE

Takasago is committed to a more sustainable sourcing approach.
We are launching a supply program which promotes sources certified as "sustainable" through the TAKASOURCE.
The idea is to support producers and advocates who share our commitments by participating financially through the purchase of their productions. On the other hand, certifications such as RSPO, Fair for Life, and FSC are not always financially accessible for all suppliers. In such case, we have several factors in the program to confirm commitment to sustainability of those suppliers. We have also followed this commitment in terms of preserving resources by working on all of our raw materials containing palm oil or those derived from palm oil. Following the headquarters becoming a member of the RSPO in September 2017, Takasago’s European fragrance production has taken the next step in receiving the RSPO-MB certification. A team representing purchasing, QA, and sustainability department was formed to highlight the key steps in identifying all raw materials derived from palm, tracing volumes of ingredients purchased as mass balance, and volumes supplied as compounded fragrances. Following accreditation in October 2019, the first CoA for customers with a RSPO-MB engagement was issued in February 2020. Based on this experience, other fragrance manufacturing facilities are due to also received certification in 2020-21, demonstrating our sustainable commitments to protect the forests, biodiversity, and local communities.

4) “TaSuKI” Update

1. Overall

2020 is indeed quite unique for Takasago as we are celebrating the 100th anniversary of the Company. One hundred years ago, back in 1920, our founder, Tadaka Kainosho, successfully established the Company in Japan. An avid learner and visionary, he first spent many years abroad to better understand the emerging fragrances and flavors industry prior to returning to Japan and incorporating Takasago.
To celebrate Tadaka Kainosho’s early 1900’s discovery journey, we have combined our TaSuKI initiatives and recreated our own “From Kyoto to Grasse” itinerary. Reorganizing TaSuKI initiatives under one single “Kyoto to Grasse banner” will improve overall visibility, implementation as well as ensure best practices to be shared.

TaSuKI Originals - From Kyoto to Grasse - Sourcing posts

TaSuki Originals - From Kyoto to Grasse - Sourcing posts
Takasago Sourcing withe Responsible Care and Ethics

2. Ongoing Projects Update

 

Strengthen “Green Chemistry” Procurement

  • Sustainable Myrcene and pine chemicals : Agreement on Stockholding –
     “TaSuKI Originals, Care and Comply”

In March 2020, Takasago International Corporation announced that it concluded an agreement to acquire part of the shares of LAWTER B.V. and signed agreement between shareholders with parent company of LAWTER B.V., Harima Chemicals Group. The agreements will strengthen Takasago procurement, specifically procurement of raw materials for aroma chemicals including l-Menthol, which are manufactured by “Green Chemistry”, Takasago’s core technology.

Pine chemicals, which are derived from pine tree and are used for the production of aroma chemicals like l-Menthol, are utilized for various products such as resin, electronic materials, and other chemicals. In terms of starting raw material for aroma chemicals, crude sulphate turpentine and gum turpentine, both pine chemicals, are important raw materials. However, demand for gum rosin, a co-product of gum turpentine, has been decreasing in recent years, causing unstable availability and fluctuating prices of gum turpentine. Therefore, Takasago decided to reinforce its control on pine chemicals supply chain and integrate upstream.

Furthermore, as consumers expect transparency throughout the supply chain, backward integration was required. Particularly regarding pine chemicals, where global initiatives such as Carbon Disclosure Project (CDP Forest started in 2013) and SDGs Goal 15 (“sustainably manage forests”) required responsible procurement specific actions.

The primary raw material and source of operation at LAWTER is crude sulphate turpentine (CST) from paper mill companies. It is considered that CST has less fluctuation in availability and price as well as better traceability than gum turpentine. By strengthening this partnership, Takasago aims to improve and stabilize procurement conditions for the key raw material, which will not only support aroma ingredients business but also flavors, fragrances and fine chemicals. Takasago intends to fully leverage its new shareholding for further development of its businesses mid- to long-term.

FLORIDA GRAPEFRUIT

  • Sustainable Grapefruit: New Groves Plantation –
    “TaSuKI Originals, Care and Comply”

Takasago strengthened long-term support for the grapefruit industry under the Tree Funding Agreement. For the first time in 100 years, Takasago Corporations joined in an ambitious plan to increase grapefruit plantations in the State of Florida.
Peace River Citrus Products, Inc. (citrus processor) and The Scott Family Companies (citrus grower) have launched a project to plant a quarter million new grapefruit trees on 1,000 acres in Florida’s St. Lucie and Indian River counties.
This is the first major grapefruit planting in the State since citrus greening disease decimated Florida’s grapefruit groves. Through this innovative grove planting commitment, Peace River and The Scott Family Companies aim to boost Florida’s grapefruit crop by 15 percent when the new groves reach maturity.

Takasago Sourcing withe Responsible Care and Ethics

Takasago gained the rights to procure 100% of the grapefruit essentials oil produced under this agreement. Increase in volume will reduce the impact of open market fluctuation.
Despite Takasago not being a citrus grower, it is important that we engage closely with the plantation business by supporting the costs for planting each new tree. Peace River Citrus Products, Inc. is a privately held and vertically integrated citrus grower, processor, and packager founded by Bill Becker and headquartered in Vero Beach, FL. Peace River employs 325 people in its modern and efficient citrus grove and processing sites located throughout central Florida. Peace River is a strategic supplier and brand partner of The Coca-Cola Company, supplying orange, grapefruit and lemon juices, and citrus products to support Coca-Cola’s brands across the globe. Peace River also supplies juices and citrus by-products such as pulp, essence, and oil to private label bottlers, retailers, and flavor companies in both US and international markets. The Scott Family Companies is a vertically integrated organization that grows, packs, and markets fresh grapefruit in the US and international markets. The companies that make up this organization include Scott Family Groves, Scott Citrus Management, Riverfront Packing Company, and Scott Marketing. The Scotts are third generation citrus growers that have a long history of farming in the famous Indian River growing district. Five family members are intimately involved in the day-to-day operations across management of the farms, fresh fruit packing plant, and marketing and distribution company of the fresh product.

New Groves Plantation

Indonesia

  • Leverage Indonesia's rich Oils and Spices Heritage –
     “TaSuKI Originals”.

First, identify sourcing potential: While local patchouli sourcing and processing has been already in full swing for decades at Takasago, we embarked on a comprehensive program to leverage Indonesian oils and spices sourcing and upgrading opportunities. The first step is to confirm and prioritize the next raw materials TaSuKI will address. (as shown in the graphs below)

New Groves Plantation

Second, deploy strategies and plans: Combine Takasago’s 40 years of local experience with a thorough due diligence of agro- and socio-economic trends (graph 1) to prioritize, design, and implement natural ingredients sourcing and manufacturing strategies and plans (graph 2).

1. Responsible Sourcing due diligence

New Groves Plantation

2. Takasago potential sourcing plan – Indonesia

Indonesia

Vanilla MADAGASCAR

  • News from Takasago Madagascar -
     “TaSuKI Originals, Care and Comply”

1. Strategic Sourcing – TaSuKI Originals

2019 - 2020 is finally the time for the cycle to bounce back and prices to decline. This seven year unprecedented “storm” was rough. However, Takasago’s local infrastructure, many years of local sourcing presence, and expertise in Madagascar proved to be a great asset to support our clients to secure high-quality supply and further grow their businesses. It is also said that one should “never waste a good crisis”. Takasago used every opportunity during these past years to fully understand issues impacting the vanilla supply chain (social, cultural, economic, and scientific) and address them accordingly. One key example is our presence upcountry. We source vanilla from 6,000 individual farmers. However, some of those farmers must transport their vanilla to far away villages for collection. In 2020, Takasago intends to open a large purchasing station close to where farmers are located. This will facilitate logistics, diminish risks, and facilitate and accelerate payments. This Takasago Upcountry Buying Station will serve 250 individual farmers. We are planning to further deploy additional Upcountry Buying Stations in other locations in need of this service.

2. Support to Local Communities and Environment –TaSuKI Care

Besides the above described local Upcountry Buying Stations which benefit the farmer communities, Takasago is making good progresses in its multi-year academic research program in cooperation with universities in Europe and Madagascar. Once the program is completed, findings will be shared, and training will be organized for smallholders, with the primary objective being to improve quality and yields, thus benefit the farmers. Publications will soon be released followed by immediate local implementation of the program. Environmental conservation is another important priority for Takasago. Without forests, vanilla would not exist. Therefore, Takasago Madagascar SA joined two reforestation programs in 2019. The first in May in the Toamasina area and the second in October (images below). Takasago Madagascar SA and its partner, Ramanandraibe Exportation SA, participated in a national reforestation project monitored by local environmental authorities “DREED”, with a target to replant 10 million trees in 2020. Takasago Madagascar SA contributed in planting 2,600 new trees in two days.

New Groves Plantation

3. CSR Compliance – TaSuKI Comply

Since Takasago established in Madagascar for vanilla sourcing and manufacturing 7 years ago, it took steps to thoroughly understand each dimension of the sourcing process and implement required best practices. As we conducted backward integration, we deepened relationship with smallholders and further identified risks in vanilla beans supply chain as well as points of improvement. With the recent deployment of Upcountry Buying Station, we felt we had sufficient insights and control and decided to begin fair trade certification process (Fair for Life).

New Groves Plantation