What changed in this filing

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Item 1. Business

2023-02-22 compared with 2022-02-22 · 44 added, 49 removed, 202 unchanged (32% of the section changed)

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(“Dr Pepper”) and Monster Energy Company (“Monster Energy”).

Our purpose is to honor God in all we do, serve others, pursue excellence and grow profitably.

Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, together with the trustees of certain trusts established for the benefit of certain relatives of the late J.

Frank Harrison, Jr., control shares representing approximately 86% of the total voting power of the Company’s total outstanding Common Stock and Class B Common Stock on a consolidated basis.

As of December 31, 2021, The Coca‑Cola Company owned shares of the Company’s Common Stock representing approximately 5% of the total voting power of the Company’s Common Stock and Class B Common Stock on a consolidated basis.

Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably.

As of December 31, 2022, J.

Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 1,004,394 shares of the Company’s Class B Common Stock, which represented approximately 71% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis.

As of December 31, 2022, The Coca‑Cola Company owned shares of the Company’s Common Stock representing approximately 9% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis.

The number of shares of the Company’s Common Stock currently held by The Coca‑Cola Company gives it the right to have a designee proposed by the Company for nomination to the Company’s Board of Directors in the Company’s annual proxy statement.

Frank Harrison, III and the trustees of the J.

Frank Harrison, III and the trustees of certain trusts established for the benefit of certain relatives of the late J.

Frank Harrison, Jr.

family trusts described above, have agreed to vote the shares of the Company’s Class B Common Stock that they control in favor of such designee.

have agreed to vote the shares of the Company’s Common Stock and Class B Common Stock that they control in favor of such designee.

The Coca‑Cola Company does not own any shares of the Company’s Class B Common Stock.

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Bottle/can sales include products packaged primarily in plastic bottles and aluminum cans.

Other sales include sales to other Coca‑Cola bottlers, “post-mix” products, transportation revenue and equipment maintenance revenue.

Other sales include sales to other Coca‑Cola bottlers, post-mix sales, transportation revenue and equipment maintenance revenue.

Post-mix products are dispensed through equipment that mixes fountain syrups with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses.

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The Coca-Cola Company Products:

Barqs Root Beer Fanta Zero AHA Gold Peak Tea

Cherry Coca-Cola Fresca BODYARMOR products Honest Tea

Cherry Coca-Cola Zero Mello Yello Coca-Cola with Coffee Hubert’s Lemonade

Coca-Cola Mello Yello Zero Core Power Minute Maid Juices To Go

Coca-Cola Orange Vanilla Minute Maid Sparkling Dasani Peace Tea

Coca-Cola Vanilla Pibb Xtra Dasani Flavors POWERade

Coca-Cola Zero Sugar Seagrams Ginger Ale FUZE POWERade Zero

Diet Barqs Root Beer Sprite glacéau smartwater Tum-E Yummies

Diet Coke Sprite Zero Sugar glacéau vitaminwater Yup Milk

Barqs Root Beer Fresca AHA Peace Tea

Cherry Coca-Cola Mello Yello BODYARMOR products POWERade

Cherry Coca-Cola Zero Mello Yello Zero Core Power POWERade Zero

Coca-Cola Minute Maid Sparkling Dasani Tum-E Yummies

Coca-Cola Vanilla Pibb Xtra fairlife products

Coca-Cola Zero Sugar Seagrams Ginger Ale glacéau smartwater

Diet Coke Sprite glacéau vitaminwater

Fanta Sprite Zero Sugar Gold Peak Tea

Fanta Zero Minute Maid Juices To Go

Products Licensed to Us by Other Beverage Companies:

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(“CCR”), a wholly owned subsidiary of The Coca‑Cola Company.

The CBA requires the Company to make quarterly sub-bottling payments to CCR on a continuing basis in exchange for the grant of exclusive rights to distribute, promote, market and sell the authorized brands of The Coca‑Cola Company and related products in certain of the Company’s distribution territories.

The CBA relates to a multi-year series of transactions, which were completed in October 2017, through which the Company acquired and exchanged distribution territories and manufacturing plants.

The CBA requires the Company to make quarterly acquisition related sub-bottling payments to CCR on a continuing basis in exchange for the grant of exclusive rights to distribute, promote, market and sell the authorized brands of The Coca‑Cola Company and related products in certain of the Company’s distribution territories.

In addition to customary termination and default rights, the CBA requires us to make minimum, ongoing capital expenditures in our distribution business and to meet certain minimum volume requirements, gives The Coca‑Cola Company certain approval and other rights in connection with a sale of the Company or of the distribution business of the Company and prohibits us from producing, manufacturing, preparing, packaging, distributing, selling, dealing in or otherwise using or handling any beverages, beverage components or other beverage products other than the beverages and beverage products of The Coca‑Cola Company and certain expressly permitted cross-licensed brands without the consent of The Coca-Cola Company.

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Similar to the CBA, these beverage agreements contain restrictions on the use of trademarks and approved bottles, cans and labels and the sale of imitations or substitutes, as well as provisions for their termination for cause or upon the occurrence of other events defined in these agreements.

Sales of beverages under these agreements with other beverage companies represented approximately 17%, 16% and 15% of our bottle/can sales volume to retail customers in 2021, 2020 and 2019, respectively.

Sales of beverages under these agreements with other beverage companies represented approximately 14%, 17% and 16% of our total bottle/can sales volume to retail customers in 2022, 2021 and 2020, respectively.

Finished Goods Supply Arrangements

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Incidence-Based Pricing Agreement with The Coca‑Cola Company

The Company has an incidence-based pricing agreement with The Coca‑Cola Company, which establishes the prices charged by The Coca‑Cola Company to the Company for (i) concentrates of sparkling and certain still beverages produced by the Company and (ii) certain purchased still beverages.

Under the incidence-based pricing agreement, the prices charged by The Coca‑Cola Company

are impacted by a number of factors, including the incidence rate in effect, our pricing and sales of finished products, the channels in which the finished products are sold, the package mix and, in the case of products sold by The Coca‑Cola Company to us in finished form, the cost of goods for certain elements used in such products.

(ii) certain purchased still beverages.

Under the incidence-based pricing agreement, the prices charged by The Coca‑Cola Company are impacted by a number of factors, including the incidence rate in effect, our pricing and sales of finished products, the channels in which the finished products are sold, the package mix and, in the case of products sold by The Coca‑Cola Company to us in finished form, the cost of goods for certain elements used in such products.

The Coca‑Cola Company has no rights under the incidence-based pricing agreement to establish the prices, or the elements of the formulas used to determine the prices, at which we sell products, but does have the right to establish certain pricing under other agreements, including the RMA.

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CONA Services LLC

We are a member of CONA Services LLC (“CONA”), an entity formed with The Coca‑Cola Company and certain other Coca‑Cola bottlers to provide business process and information technology services to its members.

Along with certain other Coca‑Cola bottlers, we are a member of CONA Services LLC (“CONA”), an entity formed to provide business process and information technology services to its members.

We are party to an amended and restated master services agreement with CONA, pursuant to which CONA agreed to make available, and we became authorized to use, the Coke One North America system (the “CONA System”), a uniform information technology system developed to promote operational efficiency and uniformity among North American Coca‑Cola bottlers.

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Nashville, TN 10

Mid-West A significant portion of Indiana and Ohio and a portion of southeastern Illinois, including Anderson, Bloomington, Evansville, Fort Wayne, Indianapolis, Lafayette and South Bend, Indiana, Akron, Columbus, Dayton, Elyria, Lima, Mansfield, Toledo, Willoughby and Youngstown, Ohio and surrounding areas.

Mid-West A significant portion of Indiana and Ohio and a portion of southeastern Illinois, including Anderson, Whitestown, Evansville, Fort Wayne, Indianapolis and South Bend, Indiana, Akron, Columbus, Dayton, Elyria, Lima, Mansfield, Toledo, Willoughby and Youngstown, Ohio and surrounding areas.

Indianapolis, IN

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In addition to concentrates purchased from The Coca‑Cola Company and other beverage companies for use in our beverage manufacturing, we also purchase sweetener, carbon dioxide, plastic bottles, cans, closures and other packaging materials, as well as equipment for the distribution, marketing and production of nonalcoholic beverages.

We purchase all of the plastic bottles used in our manufacturing plants from Southeastern Container and Western Container, two manufacturing cooperatives we co-own with several other Coca‑Cola bottlers, and a majority of our aluminum cans from two domestic suppliers.

We began sourcing aluminum cans from international locations in 2020, and we may continue to change our sourcing model in the future in order to ensure an adequate supply of aluminum cans at commercially favorable prices.

We purchase all of the plastic bottles used in our manufacturing plants from Southeastern Container and Western Container, two manufacturing cooperatives we co-own with several other Coca‑Cola bottlers, and all of our aluminum cans from two domestic suppliers.

Along with all other Coca‑Cola bottlers in the United States and Canada, we are a member of Coca-Cola Bottlers’ Sales & Services Company LLC (“CCBSS”), which was formed to provide certain procurement and other services with the intention of enhancing the efficiency and competitiveness of the Coca‑Cola bottling system.

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Further, we are exposed to commodity price risk on crude oil, which impacts our cost of fuel used in the movement and delivery of our products.

We participate in commodity hedging and risk mitigation programs, including programs

administered by CCBSS and programs we administer.

We participate in commodity hedging and risk mitigation programs, including programs administered by CCBSS and programs we administer.

In addition, other than as discussed above, there are no limits on the prices The Coca‑Cola Company and other beverage companies can charge for concentrate.

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The Company’s products are sold and distributed in the United States through various channels, which include selling directly to customers, including grocery stores, mass merchandise stores, club stores, convenience stores and drug stores, selling to on-premise locations, where products are typically consumed immediately, such as restaurants, schools, amusement parks and recreational facilities, and selling through other channels such as vending machine outlets.

During 2020, due to the COVID-19 pandemic, consumer demand shifted from products sold for immediate consumption through smaller retail stores and on-premise locations to take-home products sold in grocery stores, mass merchandise stores and club stores.

During 2021, as the COVID-19 pandemic’s impact on economic activity abated, consumer demand increased for products sold for immediate consumption compared to 2020, although it remains somewhat lower than levels experienced prior to the COVID-19 pandemic.

The following table summarizes the percentage of the Company’s total bottle/can sales volume to its largest customers, as well as the percentage of the Company’s total net sales that such volume represents:

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New brand and product introductions, packaging changes and sales promotions are the primary sales and marketing practices in the nonalcoholic beverage industry and have required, and are expected to continue to require, substantial expenditures.

Recent introductions include BODYARMOR Edge, Dr Pepper Zero Sugar, glacéau smartwater wellness portfolio, certain new flavors of Coca-Cola with Coffee, and certain new flavors of Dunkin’ Donuts iced coffee.

We sell our products primarily in single-use bottles and cans, in varying package configurations from market to market.

Recent introductions include Coca‑Cola Creations, Dr Pepper & Cream Soda, fairlife milk products and Minute Maid Aguas Frescas.

We sell our products primarily in single-use, recyclable bottles and cans, in varying package configurations from market to market.

For example, there may be up to 26 different packages for Diet Coke within a single geographic area.

Bottle/can sales volume to retail customers during 2021 was approximately 52% bottles and 48% cans.

Total bottle/can sales volume to retail customers during 2022 was approximately 51% bottles and 49% cans.

We rely extensively on advertising in various media outlets, primarily online, television and radio, for the marketing of our products.

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various federal and state laws and regulations governing our employment practices, including those related to equal employment opportunity, such as the Equal Employment Opportunity Act and the National Labor Relations Act;

and laws regulating the sale of certain of our products in schools.

and laws and regulations restricting the sale of certain of our products in schools.

As a manufacturer, distributor and seller of beverage products of The Coca‑Cola Company and other beverage companies in exclusive territories, we are subject to antitrust laws of general applicability.

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Many of these restrictions have existed for several years in connection with subsidized meal programs in schools.

Additionally, legislation has been proposed by certain state and local governments to limit or restrict the sale of energy drinks to minors and/or persons below a specified age and/or to restrict the venues in which energy drinks can be sold.

Restrictive legislation, if widely enacted, could have an adverse impact on our products, sales and reputation.

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Legislation has been proposed in Congress and by certain state and local governments which would prohibit the sale of soft drink products in non-refillable bottles and cans or require a mandatory deposit as a means of encouraging the return of such containers, each in an attempt to reduce solid waste and litter.

Similarly, we are aware of proposed legislation that would impose fees or taxes on various types of containers that are used in our business.

Similarly, we are aware of proposed legislation that would impose fees or taxes on various types of containers that are used in our business, as well as proposed legislation around new recycling regulations and the reduction of single-use plastics.

We are not currently impacted by the policies in these types of proposed legislation, but it is possible that similar or more restrictive legal requirements may be proposed or enacted within our distribution territories in the future.

We are also subject to federal and local environmental laws, including laws related to water consumption and treatment, wastewater discharge and air emissions.

Our facilities must comply with the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act and other federal and state laws regarding handling, storage, release and disposal of wastes generated on-site and sent to third-party owned and operated off-site licensed facilities.

We are also subject to federal, state and local environmental laws, including laws related to water consumption and treatment, wastewater discharge and air emissions.

Our facilities must comply with the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act and other federal, state and local laws regarding handling, storage, release and disposal of wastes generated on-site and sent to third-party owned and operated off-site licensed facilities.

We do not currently have any material commitments for environmental compliance or environmental remediation for any of our properties.

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At Coca-Cola Consolidated, our teammates are the heart of our business and the key to our success.

As of December 31, 2021, we employed approximately 16,000 employees which we refer to as “teammates,” of which approximately 14,100 were full-time and 1,900 were part-time.

Approximately 13% of our labor force is covered by collective bargaining agreements.

As of December 31, 2022, we employed approximately 17,000 employees which we refer to as “teammates,” of which approximately 15,000 were full-time and approximately 2,000 were part-time.

Approximately 13% of our workforce is covered by collective bargaining agreements.

While the number of collective bargaining agreements that will expire in any given year varies, we have been successful in the past in negotiating renewals to expiring agreements without any material disruption to our operations, and management considers teammate relations to be good.

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At Coca‑Cola Consolidated, we strive to fulfill our Purpose – To honor God in all we do, to serve others, to pursue excellence and to grow profitably.

And as a waypoint to help guide us along this journey is our Operating Destination – One Coca‑Cola Consolidated Team, consistently generating strong cash flow, while empowering the next generation of diverse servant leaders.

As a waypoint to help guide us along this journey is our Operating Destination – One Coca‑Cola Consolidated Team, consistently generating strong cash flow, while empowering the next generation of diverse servant leaders.

At the core of our culture is a focus on service.

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Talent Acquisition, Development and Retention

The success and growth of our business depend in a large part on our ability to execute on our talent strategy which is to be a purpose driven company that attracts, engages and grows a highly talented, diverse workforce of servant leaders enabling our growth and performance.

The success and growth of our business depend in a large part on our ability to execute on our talent strategy which is to be a purpose driven organization that attracts, engages and grows a highly talented, diverse workforce of servant leaders enabling our growth and performance.

To meet our talent objectives, we utilize key strategies and processes related to recruitment, onboarding and learning development.

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Management monitors market compensation and benefits to be able to attract, retain and promote teammates and reduce turnover and its associated costs.

During 2021, the Company faced substantial turnover of teammates, periodic labor shortages and wage inflation in our front-line positions due to tight conditions in the nationwide labor market.

The Company responded to these challenges by making investments to attract, reward and retain front-line employees, as well as increasing base pay for front-line workers in certain competitive markets.

In recent years, the Company has faced periods of high teammate turnover, periodic labor shortages and wage inflation in our front-line workforce due to tight conditions in the labor market.

The Company responded to these challenges by making certain investments in our teammates to reward them for their contributions in achieving strong operating results and to remain competitive in the current labor environment.

We are a learning organization committed to the goal of continuous improvement and the development of our teams and teammates.

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Our teammate onboarding experiences involve online learning, job-specific training and on-the-job development to learn about our Company, our products and our industry.

Job-specific training includes activity-based classes that focus on how teammates can safely and efficiently

sell, merchandise and display our products.

Job-specific training includes activity-based classes that focus on how teammates can safely and efficiently sell, merchandise and display our products.

After onboarding, our teammates may participate in numerous learning experiences offered by the Company to help them develop and improve their skills and capabilities to advance in their careers, including at one of our two dedicated experiential learning centers where teammates can develop and grow their skills through a hands-on experience.

We provide a leadership program designed to challenge and grow our future servant leaders through a series of learning experiences, including on-the-job training, mentorship, peer coaching and formal leadership courses.

This program focuses on developing leadership skills, building cohesive teams and strengthening business acumen to prepare teammates for a leadership position at Coca‑Cola Consolidated.

This program focuses on developing

leadership skills, building cohesive teams and strengthening business acumen to prepare teammates for a leadership position at Coca‑Cola Consolidated.

An important part of attracting and retaining top talent is teammate satisfaction, and we conduct an annual engagement survey administered and analyzed by an independent third party to assess teammate satisfaction and engagement and the effectiveness of our teammate development and compensation programs.

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We sponsor a number of programs and initiatives designed to reduce the frequency and severity of workplace injuries, incidents, risks and hazards, including safety committees, Company policies and procedures, coaching and training, and awareness through leadership engagement and messaging.

We continue to diligently monitor and manage through the impact of the COVID-19 pandemic on all aspects of our business, including by taking actions to protect and promote the health and safety of our consumers, customers, teammates and communities while continuing to manufacture and distribute products.

For more information about the Company’s response to the COVID-19 pandemic, see the “COVID-19 Impact on Consumer, Customer, Teammate and Community Safety” section of “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Diversity and Inclusion

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Our website is www.cokeconsolidated.com and we make available free of charge through the investor relations portion of our website our Annual Report on Form 10-K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, and any amendments to these reports, as well as proxy statements and other information.

These documents are available on our website as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

These documents are available on our website as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the United States Securities and Exchange Commission (the “SEC”).

The information on our website or linked to or from our website is not incorporated by reference into, and does not constitute a part of, this report or any other documents we file with, or furnish to, the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business