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Item 1. Business

2023-02-28 compared with 2022-02-28 · 148 added, 176 removed, 118 unchanged (73% of the section changed)

(a) General Development of Business –

Sonoco Products Company ("Sonoco," "the Company," "we," "us," or "our") is a South Carolina corporation originally founded in Hartsville, South Carolina, in 1899 as the Southern Novelty Company.

At its beginnings in 1899, a team of 12 people worked from a rented warehouse in Hartsville, South Carolina.

The Company’s first product was a cone-shaped paper yarn carrier used for winding and transporting yarn.

Sonoco Products Company ("Sonoco," "the Company," "we," "us," or "our") is a South Carolina corporation founded in Hartsville, South Carolina, in 1899 as the Southern Novelty Company.

At its beginnings in 1899, a team of 12 people worked from a rented warehouse to produce the Company’s first product, a cone-shaped paper yarn carrier used for winding and transporting yarn.

Since most of the textile cones of that day were wooden, paper cones were a novelty.

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In 1923, the Southern Novelty Company name was changed to Sonoco Products Company, or "Sonoco," using the first two letters from each word of its original name.

Sonoco is now a multi-billion dollar global manufacturer of a variety of consumer, industrial, protective, and healthcare packaging products.

The Company has approximately 300 locations in 32 cou ntries, serving some of the world’s best-known brands in some 85 n ations.

Sonoco is now a multi-billion dollar global designer, developer, and manufacturer of a variety of highly-engineered and sustainable packaging serving multiple end markets.

As of December 31, 2022, the Company had approximately 310 locations in 32 cou ntries, serving some of the world’s best-known brands in some 85 n ations.

Sonoco is committed to creating sustainable products, services and programs for our customers, employees and communities that support our corporate purpose:

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Better Life .

Our goal is to bring more to packaging than just the package by offering integrated packaging solutions that help define brand personalities, creating unique customer experiences, and enhancing the quality of products.

Our goal is to bring more to packaging than just the package by offering integrated packaging solutions that help define brand personalities, create unique customer experiences, and enhance the quality of products.

We seek to help our customers solve their packaging challenges by connecting insights to innovation and developing customized solutions that are tailored to the customer’s goals and objectives.

Sonoco changed its financial reporting structure effective January 1, 2021, to reflect the way it manages its operations, evaluates performance and allocates resources.

The revised structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

The former Protective Solutions and Display and Packaging segments were eliminated and the underlying businesses and their results were realigned into All Other or, in certain cases, subsumed into the remaining two reportable segments.

The Company divested its global display and packaging business in two separate transactions:

the European contract packaging business on November 30, 2020 and the U.S.

display and packaging business on April 4, 2021.

Prior to the divestitures, these businesses were reported in All Other.

Information about products and services of these segments and the markets they serve is discussed below under “Description of business.” Segment financial information for prior periods has been recast to conform to the current-year presentation.

On January 26, 2022, Sonoco completed the acquisition of Ball Metalpack Holding, LLC ("Ball Metalpack"), a leading supplier of sustainable metal packaging for food and household products and the largest aerosol can manufacturer in North America, for an aggregate purchase price of $1.35 billion in cash, subject to customary adjustments, including for working capital, cash and indebtedness.

Segment Reporting

As noted above, the Company currently reports its financial results in two reportable segments – Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

The Company currently reports its financial results in two reportable segments – Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

Further information about the Company’s reportable segments is provided in Note 18 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

We anticipate that the operations of Ball Metalpack will be included in the Consumer Packaging segment in future periods.

Consumer Packaging

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The operations in this segment consisted of 87 plants throughout the world as of December 31, 2022.

The products, services and markets of the Consumer Packaging segment, prior to the Ball Metalpack acquisition, were as follows:

Products and Services Markets

Round and shaped rigid paper containers;

fiber and plastic caulk/adhesive tubes;

metal and peelable membrane ends and closures;

thermoformed plastic trays and containers;

high-barrier flexible packaging films and printed flexible packaging;

rotogravure cylinder engraving;

and global brand artwork management

Stacked chips, snacks, nuts, cookies, crackers, other hard-baked goods, candy, gum, frozen concentrate, powdered and liquid beverages, powdered infant formula, coffee, refrigerated dough, frozen foods and entrees, processed foods, fresh fruits, vegetables, fresh-cut produce, salads, fresh-baked goods, eggs, seafood, poultry, soup, pasta, dairy, sauces, dips, condiments, pet food, meats, and cheeses

Products within the Consumer Packaging segment consist of rigid packaging (paper, metal, and plastic) and flexible packaging, primarily serving the consumer staples market focused on food, beverage, household, and personal products.

Our rigid paper containers are manufactured from 100% recycled paperboard provided primarily from Sonoco global paper operations.

These paper products are primarily used in the food and beverage markets including snacks, baked goods, powdered drinks, and confectionary goods.

With the Ball Metalpack acquisition in 2022, we expanded our manufacturing capability in steel and aluminum metal fabrication beyond our existing metal ends and closures products to include metal packaging products for food and household products including vegetables, tomatoes, fruit, spray cleaners, paint, and other products.

Our rigid plastic products are comprised of thermoformed plastic trays and enclosures for fresh produce, condiments, and pre-packaged foods.

Our flexible packaging is comprised primarily of plastic packaging serving a variety of food and personal product applications where high-barrier properties are critical for freshness and shelf-life.

Within the Consumer Packaging segment, Sonoco’s rigid paper containers are the Company’s largest revenue-producing group of products and services, representing approximately 21% of consolidated net sales in the year ended December 31, 2022.

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Industrial Paper Packaging

The Industrial Paper Packaging segment, previously called "Paper and Industrial Converted Products," accounted for approximately 44%, 38% and 39% of the Company’s consolidated net sales in the years ended December 31, 2021, 2020 and 2019, respectively.

The Industrial Paper Packaging segment accounted for approximately 37%, 44% and 38% of the Company’s consolidated net sales in the years ended December 31, 2022, 2021 and 2020, respectively.

This segment served its markets through 182 plants on five continents as of December 31, 2022.

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Sonoco uses approximately 49% of the paper it manufactures, and the remainder is sold to third parties.

This vertical integration strategy was supported by 23 paper mills with 31 paper machines and 23 recycling facilities throughout the world as of December 31, 2021.

In 2021, Sonoco had the capacity to manufacture approximately 2.2 million tons of recycled paperboard.

The products,

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services and markets of the Industrial Paper Packaging are as follows:

Products and Services Markets

Recycled paperboard, chipboard, tubeboard, lightweight corestock, boxboard, corrugating medium, edgeboard, specialty paper grades, and adhesives;

paperboard tubes and cores, molded plugs, and reels;

paper-based cones and pallets;

paper-based protective packaging;

collection, processing and recycling of old corrugated containers, paper, plastics, metal, glass and other recyclable materials;

and flexible intermediate bulk containers and bulk bags Converted paperboard products, spiral winders, construction, plastic films, metal, paper mills, shipping and storage, tape and labels, textiles, wire and cable, adhesives, appliances, heating and air conditioning, office furnishings, fitness equipment, promotional and palletized distribution, municipal, residential, customers’ manufacturing and distribution facilities and fiber protective packaging

This vertical integration strategy was supported by 23 paper mills with 29 paper machines throughout the world as of December 31, 2022.The Company also operates 23 recycling facilities in the United States capable of recycling old corrugated containers, paper, plastics, metals, and other recyclable materials that can be processed back through the Sonoco manufacturing ecosystem.

In 2022, Sonoco had the capacity to manufacture approximately 2.2 million tons of recycled paperboard per year.

Products within the Industrial Paper Packaging segment consist primarily of goods produced from recycled fiber including paperboard tubes, cores, and cones, paper-based protective materials and uncoated recycled paperboard for high-end applications such as folding cartons, can board, and laminated structures.

Products across this segment support multiple end markets in industrials (construction and building products, and industrial distribution), consumer staples (food and beverage, food distribution, household and personal products), and consumer discretionary (home building, appliances, apparel, and home furnishings), as well as various other end markets.

In 2022, Sonoco’s tubes and cores products were the Company’s second largest revenue-producing group of products, representing approximately 18% of consolidated net sales in the year ended December 31, 2022.

This group c omprised 19% of consolidated net sales in both 2020 and 2019.

This group comprised 21% and 19% of cons olidated net sales in 2021 and 2020, respectively.

The businesses grouped as All Other accounted for approximately 11%, 14%, and 19% of the Company’s consolidated net sales in the years ended December 31, 2022, 2021 and 2020, respectively.

The operations in this segment consisted of 39 plants throughout the world as of December 31, 2022.

Products within the All Other businesses consist of a variety of packaging materials including plastic, paper, foam, and various other specialty materials.

All Other businesses serve a wide variety of end markets including consumer staples, consumer discretionary, industrial, and pharmaceuticals.

Prior to their divestitures in 2020 and 2021, the Company's global display and packaging businesses, which included point-of-purchase displays, fulfillment operations, and contract packaging, were reported in All Other.

The products, services and markets of the businesses grouped as All Other are as follows:

Products and Services Markets

Thermoformed rigid plastics trays and devices, custom-engineered, molded foam protective packaging and components;

temperature-assured packaging;

retail security packaging, including printed backer cards, thermoformed blisters and heat sealing equipment;

injection molded and extruded containers, spools and parts;

and paper amenities

Medical devices, pharmaceuticals, electronics;

automotive, appliances, temperature-sensitive pharmaceuticals and food;

miscellaneous foods and beverages, personal care, cosmetics, fragrances, hosiery, office supplies, home and garden, over-the-counter drugs, sporting goods, hospitality industry

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Other Aspects of the Company's Business

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Raw materials are purchased from a number of outside sources.

The Company considers the supply and availability of raw materials to be adequate to meet its needs.

After a number of global supply chain challenges in the past several years, the Company considers the supply and availability of raw materials to be adequate to meet its needs.

Patents, Trademarks, and Related Contracts – Most inventions and product and process innovations are generated by Sonoco’s development, marketing and engineering staff, and are important to the Company’s internal growth.

Patents have been granted on many inventions created by Sonoco staff in the United States and in many other countries.

Patents and trade secrets were acquired as part of acquisitions over the past two years, including the August 2020 acquisition of Can Packaging and the January 2022 acquisition of Ball Metalpack.

These patents are managed globally by a Sonoco intellectual capital management team through the Company’s subsidiary, Sonoco Development, Inc.

Patents, trademarks and proprietary technology are also acquired through acquisitions.

During 2022, proprietary technology was acquired as part of the Ball Metalpack (renamed Sonoco Metal Packaging) acquisition and both proprietary technology and trademarks were acquired as part of the Skjern acquisition.

Patents are managed globally by a Sonoco intellectual capital management team through the Company’s subsidiary Sonoco Development, Inc.

SDI globally manages patents, trade secrets, confidentiality agreements and license agreements.

Some patents have been licensed to other manufacturers.

Sonoco also licenses a few patents from outside companies and universities.

Some patents have been licensed to other manufacturers, and Sonoco also licenses a few patents from outside companies and universities.

patents expire after about 20 years, and patents on new innovations replace many of the abandoned or expired patents.

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Trademarks and domain names are licensed to outside companies where appropriate.

Seasonality – Although demand for some of the Company's products varies seasonally, overall the Company's operations are not seasonal to any significant degree.

Dependence on Customers – On an aggregate basis during 2021, the five largest customers in the Consumer Packaging se gment and the Industrial Paper Packaging segment accounted for approximatel y 28% and 9%, respectively, of each segment’s net sales .

Seasonality – Although demand for the majority of the Company's products is not seasonal to any significant degree, the Company's Metal Packaging operations (acquired in January 2022) generally experience higher sales and operating profits during the second and third quarters of the year as demand for certain of its products increases during the peak of the food packaging season.

Dependence on Customers – On an aggregate basis during 2022, the five largest customers in the Consumer Packaging and Industrial Paper Packaging segments accounted for approximately 26% and 12%, respectively, of each segment’s net sales.

The five largest customers in the All Other group of businesses accounted for approximately 14% of the group’s net sales.

Sales to the Company’s largest customer represe nted 4.2% of c onsolidated revenues in 2021.

This concentration of sales volume resulted in a corresponding concentration of credit, representing approxima tely 3.4% of the Company’s consolidated trade accounts receivable at December 31, 2021.

The Company’s next largest customer comprised 3.0% of consolidated revenues in 2021.

None of the Company’s customers represented 10% or more of consolidated revenues in 2022 or consolidated trade accounts receivable as of December 31, 2022.

Additional information regarding Sonoco's customers is provided in Item 1A - Risk Factors under the caption "Risks Related to Competition, Customers and Suppliers."

Backlog - The Company provides a wide variety of products to multiple end markets and relies on its customers' forecasts to position raw materials for manufacturing within its facilities.

The Company does not carry a significant backlog and, in general, aligns its customer deliveries on a build-to-order basis.

Competition – The Company sells its products in highly competitive markets, which include paper, textile, film, food, packaging, construction, and wire and cable.

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Because we operate in highly competitive markets, we regularly bid for new and continuing business.

Losses and/or awards of business from our largest customers, customer changes to alternative forms of packaging, and the repricing of business, can have a significant effect on our operating results.

Losses or awards of business from our largest customers, customer changes to alternative forms of packaging, and the repricing of business can have a significant effect on our operating results.

The Company manufactures and sells many of its products globally.

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The Company also believes that its technological leadership, reputation for quality, and vertical integration are competitive advantages.

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the Company’s product lines and global presence is driven by the rapidly changing needs of its major customers, who demand high-quality, state-of-the-art, environmentally compatible packaging, wherever they choose to do business.

Expansion of the Company’s product lines and global presence is driven by the rapidly changing needs of its major customers, who demand high-quality, state-of-the-art, environmentally compatible packaging, wherever they choose to do business.

It is important to be a low-cost producer in order to compete effectively.

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Compliance with Government Regulations and Laws – The Company must comply with extensive laws, rules and regulations in the United States and in each of the countries where it conducts business with respect to a variety of matters.

Management believes that the Company is in compliance with all material applicable government regulations, including environmental regulations and does not believe that there is any material impact on capital expenditures, earnings, or competitive position as a result of efforts to comply with these regulations.

Information regarding compliance with government regulations, including environmental laws, is provided in Item 1A - Risk Factors, in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption “Risk Management,” and in Note 16 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Culture – At Sonoco, our purpose is engrained in our culture.

Culture – At Sonoco, our purpose is ingrained in our culture.

In fact, it drives our culture.

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However, we believe the importance of packaging extends beyond its functionality to also include its impact on the planet.

During 2020, we established a new corporate team, led by a staff vice president directly reporting to our CEO, to champion our global sustainability efforts.

This team leads the Company’s global sustainability programs for all our Consumer- and Industrial-related packaging businesses, including driving efforts to meet our climate change related goals, and addressing the complex regulatory and policy environment landscape.

Additionally, we have set up a Corporate Sustainability Council to provide oversight, guidance, and direction on social, community, and environmental issues that impact the reputation and economic performance of the Company and to help address the concerns of our stakeholders.

During 2020, we established a new corporate team, led by a vice president directly reporting to our CEO, to champion our global sustainability efforts.

This team has expanded and leads the Company’s global sustainability programs for all our Consumer- and Industrial-related packaging businesses, including driving efforts to meet our climate change related goals.

In partnership with our employees, we are committed to protecting the natural environment and our communities through sustainable practices.

We emphasize a culture of accountability and strive to conduct our business in a manner that is fair, ethical, and responsible to earn the trust of our employees.

Additionally, we continue to convene our Corporate Sustainability Council to provide oversight, guidance, and direction on social, community, and environmental issues that impact the reputation and economic performance of the Company and to help address the concerns of our stakeholders.

The Council meets quarterly and reports to and is sponsored by Sonoco’s President and CEO.

The Council reports on Sonoco’s sustainability activities, biannually, to the Board of Directors.

The Council reports on Sonoco’s sustainability activities, quarterly, to the Board of Directors.

We have committed to reporting in line with the Global Reporting Initiative standards.

Our sustainability goals include the following key elements:

Greenhouse Gas Emissions - While we have reduced normalized greenhouse gas ("GHG") emissions by approximately 25% since 2009, we are committed to further improving our environmental impact by setting ambitious new targets to reduce our global greenhouse gas emissions in line with the Paris Agreement, which is aimed at limiting the warming of global temperatures to well below 2°C above pre-industrial levels.

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Greenhouse Gas Emissions - While we estimate that we have reduced our Scope 1 and Scope 2 greenhouse gas ("GHG") emissions intensity by approximately 25% since 2009, we are committed to further improving our environmental impact by setting ambitious new targets to reduce our global greenhouse gas emissions in line with the Paris Agreement, which is aimed at limiting the warming of global temperatures to well below 2°C above pre-industrial levels.

Specifically, Sonoco aims to reduce absolute scope 1 and 2 GHG emissions by 25% by 2030 from a 2020 base year.

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In addition, we are actively studying necessary operational changes, technology developments and market changes that would be required to achieve net-zero GHG emissions by 2050.

To meet our Science-Based Targets over the next decade, each of our more than 300 global operations are focused on reducing GHG emissions by investing in energy efficiency and renewable energy projects along with purchasing electricity from certified green and reduced-carbon energy sources.

In addition, we are incorporating sustainability and environmental metrics into each of our business units’ plans and management incentives.

Energy Usage - In support of our GHG emission reductions, Sonoco aims to continue energy efficiency improvements in our manufacturing plants targeted to reduce normalized energy use by at least 8% by 2030 from a 2020 baseline in addition to investing in energy efficiency, renewable energy and alternative power projects.

For example, our "Greening of the Grid" project includes purchasing less carbon intensive electricity from utilities.

We believe these actions will reduce cumulative scope 2 GHG emissions by up to 10% by 2030.

Also, our ongoing plant efficiency projects are intended to drive an 8% cumulative reduction in scope 1 GHG emissions, stemming from direct investments in plant boiler efficiency, compressed air, LED lighting, vacuum systems, HVAC systems and process chillers.

Energy Usage - We strive to manage, mitigate and reduce our GHG emissions where possible.

In support of our GHG emission reductions, Sonoco aims to continue energy efficiency improvements in our manufacturing plants targeted to reduce total energy use by at least 8% by 2030 from a 2020 baseline in addition to investing in energy efficiency, renewable energy and alternative power projects.

Water Usage - Reducing our water consumption is part of being responsible stewards of our planet’s resources.

Many of our actions to reduce water usage involve our global paper mills, which account for the majority of our global water usage.

We plan to conduct water risk studies at these manufacturing facilities using WRI Aqueduct, WWF Water Rich Filter or similar tools.

Plastic Usage - We are committed to responsibly managing resins use at our facilities and are implementing "Operation Clean Sweep", a program focused on preventing discharge of plastic pellets into the environment.

We are also working to ensure we can make relevant on-pack recyclability claims for at least 75% of our global rigid plastic product portfolio, while also ensuring we are closing the loop through continued use of post-consumer recycled content.

We have conducted initial water risk studies at these manufacturing facilities using the WRI Aqueduct water risk tool.

Single Use Plastics - We are committed to reducing the use and impact of virgin plastics on the environment.

As such, we are working to ensure we can make relevant on-pack recyclability claims for at least 75% of our global rigid plastic product portfolio, while also ensuring we are closing the loop through continued use of post-consumer recycled content.

We are also committed to responsibly managing resins use at our facilities and are implementing "Operation Clean Sweep", a program focused on preventing discharge of plastic pellets and nurdles into the environment.

Recycling - We also serve as a valued partner to our customers to reduce the environmental impact of their packaging.

As such, by utilizing recycled materials, the Company has already achieved its goal set in 2019 to increase to at least 85% of the amount, based on weight, of product we recycle or cause to be recycled as a percent of the product we put in the marketplace.

We are focused on continuing to reduce energy usage and air emissions by improving energy efficiency through targeted investments and initiatives.

We continue to engage in activities and make investments that we believe will enable us to innovate our products and improve our operational infrastructure as well as drive end-of-life solutions for our products and develop partnerships with key stakeholders across our value chain to help deliver sustainable solutions.

Human Capital Management - Sonoco’s core belief that “we are only as strong as our people” underlies our efforts to attract, acquire and retain talented employees for our global businesses.

We seek to engage, develop and reward our employee base of approximately 20,500 so they can successfully pursue our purpose of Better Packaging.

Better Life .

We continue to develop a range of products made from renewable materials and materials that can be recycled or composted at the end of their life.

We engage in activities and make investments that we believe will enable us to innovate our products and improve our operational infrastructure as well as drive end-of-life solutions for our products and develop partnerships with key stakeholders across our value chain to help deliver sustainable solutions.

People Management - Sonoco’s core belief in “People and Packaging with a Purpose” underlies our efforts to attract, acquire and retain talented employees for our global businesses.

We bring more to packaging than just the package.

We depend on our employees to achieve our mission of creating sustainable packaging solutions that help build our customers’ brands, enhance the quality of their products and improve the quality of life for people around the world.

We work towards this goal by establishing a foundation for actions that support health and safety, diversity and inclusion, and talent development.

Health and Safety – Protecting the health and safety of our employees is a top priority, and we are committed to providing a safe working environment for all our associates.

We work towards this goal by establishing a foundation for actions that support sustainability;

health and safety;

diversity, equity and inclusion;

and talent development.

Integrity is a hallmark of the Sonoco culture.

We seek to engage, develop and reward our employee base so they can successfully pursue our purpose of Better Packaging.

The Company believes that a strong focus on human capital through the talent we hire and retain is critical to maintaining our competitiveness.

This focus on human capital is reinforced by our Policies on Business Conduct and through increasing employee awareness and education, communication and training.

As of December 31, 2022, we had approximately 22,000 full-time equivalent employees, with the majority concentrated in the United States.

We consider our employee relations to be strong.

People Objectives

We rely on the personal relationships and service provided by employees.

As such, we believe attracting, recruiting, developing and retaining diverse talent is vital to our success.

The Company is focused on supporting our employees, and we consider the management of our talent to be essential to the ongoing success of our business.

Our Board of Directors, and the Executive Compensation and Employee & Public Responsibility Committees of the Board, provide oversight of our human capital management strategy.

Health and Safety

We take the health and safety of our employees seriously.

Protecting the health and safety of our employees is a top priority, and we are committed to providing a safe working environment for all our associates.

We expect each employee to follow our safety standards and protocols.

We use global and local incident data along with identifying leading indicators to create program and safety improvement action plans to reduce conditions and behaviors that lead to at-risk situations.

In 2021, we moved our safety program from a historical lagging indicator focus to a more proactive, leading indicator approach.

Overall injuries in 2021 were slightly down from 2020 but more importantly were down 10% from 2019.

To promote the prevention of more significant Life Changing Events, which are injuries or incidents that cause or have the potential to cause permanent disabilities or the loss of life, we engaged outside experts to conduct assessments of high-risk activities and leveraged learnings globally.

Sonoco tracks safety performance and training indicators with a goal of reducing safety incidents and improving upon the previous year’s performance.

Overall injuries in 2022 were slightly up from 2021, but remained lower than 2020 and 2019, despite the effects of acquisitions.

To promote the prevention of more significant injuries or incidents that cause or have the potential to cause permanent disabilities or the loss of life, we continue to engage with outside experts to conduct assessments of high-risk activities and to leverage learnings from such engagement globally.

In addition, we evaluated our safety systems to improve focus and resources.

Globally, we achieved completion of 99% of all safety improvement action plans, which are site level improvement plans designed to reduce risk.

Finally, our operations leadership worked together to develop a new safety playbook which will be used globally in 2022 to further train our employees.

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Our focus on safeguarding the health of our employees continued to evolve around actions we took to reduce exposures to COVID-19.

We continued to implement safety protocols across our facilities following recommendations by the U.S.

Center for Disease Control and Prevention and the World Health Organization.

As the pandemic continuously evolved, we put in place measures and practices for the health and safety of our employees, customers and suppliers, and in response to changing local laws.

We proactively provided employees with personal protective equipment, and where possible, provided on-site testing and vaccination clinics.

Diversity and Inclusion – Sonoco embraces Diversity and Inclusion, and our efforts to increase diversity within our Company are an organizational priority.

As of December 31, 2021, our employees were located in the following geographic regions:

Globally, we achieved completion of 99% of all safety improvement action plans, which are site level improvement plans designed to reduce risk, in 2022.

Finally, our operations leadership implemented a new safety playbook globally in 2022 to further train our employees.

We believe tracking and reporting of Sonoco’s health and safety data increases accountability and provides important insights into processes that need improvement or enhancement.

Other employee well-being resources include wellness courses and a variety of online training classes, as well as other programs to promote mental and physical health.

We continue to utilize employee feedback and surveys to gather information to better serve our team members.

Members of our human resources department annually review benefits to ensure we can support the well-being of our employees and their families.

Diversity, Equity, and Inclusion

Our commitment to diversity, equity and inclusion ("DEI") starts with our goal of developing a workforce that is diverse in background, knowledge, skill and experience.

Sonoco engages in efforts aimed at hiring diverse talent, including initiatives focused on gender, underrepresented ethnic groups, LGBT+ individuals, people with disabilities, veterans and others.

We have implemented policies and training focused on non-discrimination and harassment prevention.

We embrace DEI, which we believe fosters leadership through new ideas and perspectives.

In 2022, we continued the evolution of our DEI strategy and objectives, an ongoing business imperative.

In connection with its diversity initiatives, Sonoco periodically requests that its employees and Board members self-identify based on specified diversity categories.

As of December 31, 2022, approximately 25.5% of our total work force and 17.0% of our senior leaders identified as female, while approximately 33.2% of our U.S.

workforce and 13.6% of our senior leaders identified as a member of an underrepresented ethnic group.

From our global workforce, our employees were located in the following geographic regions:

57% in North America;

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and 10% in Asia Pacific.

Our global workforce is 26% female and 74% male and 34% of our U.S.

employees identify as a racial minority.

We have labor unions in all regions of our operations, and in North America, approximately 12.5% of our employees are represented by unions.

We rely on the unique qualities and talents of our employees to help us meet our strategic priorities.

Our Diversity and Inclusion goals are focused on increasing the representation of women and racial minorities into more salaried and senior leadership positions.

Our DEI goals are focused on increasing the representation of women and racial minorities into more salaried and senior leadership positions.

We are working toward this goal by increasing hiring, focusing on development and promotions, as well as focusing on retention efforts.

We made significant progress in talent acquisition during 2022, despite a challenging labor market.

In the U.S., 44% of employee hires were female and 34% a member of a minority group in 2021.

For the past 10 years, Sonoco’s employees have expanded and improved our Global Diversity and Inclusion Council, which is chaired by our President and CEO.

In 2020, the Global Diversity and Inclusion Council chartered a new Business Resource Group ("BRG"), Black Employees @ Sonoco , to join our other five existing BRGs.

In 2021, we continued to focus council activities on workforce representation (diversity) and work environment (inclusion) by addressing unconscious bias to promote an environment where diverse backgrounds are appreciated, and diverse ideas are heard.

In addition, we are committed to lifting up historically disadvantaged businesses in an effort to make a positive economic impact on society.

We have had a dedicated Supplier Diversity program since 2004, and since 2010 we have spent approximately $1.9 billion with certified, diverse suppliers.

Talent Acquisition and Development – Attracting, developing and retaining talented employees is critical to our success and is an integral part of our human capital strategy.

In the U.S., 29% of new employee hires were female and 42% a member of a minority group in 2022.

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For the past 11 years, Sonoco’s employees have expanded and improved our Global Diversity, Equity and Inclusion Council (the "DEI Council"), which is chaired by our President and CEO.

In 2022, the Company changed the name of the DEI Council, which was formerly known as the Global Diversity and Inclusion Council, to reflect the Company's increasing emphasis on driving equity as part of an inclusive employee environment.

An important part of our DEI efforts includes Sonoco’s Business Resource Groups, which are groups of employees who support our diversity, equity, and inclusion strategies by leveraging the unique perspectives of their members.

In 2022, we continued to focus DEI Council activities on workforce representation (diversity and equity) and work environment (equity and inclusion) by addressing unconscious bias to promote an environment where diverse backgrounds are appreciated, and diverse ideas are heard.

In 2022, the DEI Council hosted a global Diversity & Inclusion Leadership Summit at headquarters in Hartsville, South Carolina, with a primary focus of equipping global DEI leaders with tools and information to increase impact in their regions.

We have continued to build our Supplier Diversity Program since 2004, integrating diversity and inclusion into our procurement process by laying a strong foundation with key internal and external stakeholders.

We developed policies, practices and procedures to ensure equal opportunity and enable access.

As part of Sonoco’s Supplier Diversity Program, supplier diversity progress is reported to the CEO, who in turn reports the progress to the Employee & Public Responsibility Committee of the Board of Directors.

Talent Development

Attracting, developing and retaining talented employees is critical to our success and is an integral part of our human capital strategy.

We have created a Global Talent Acquisition and Organization Development team to provide a more holistic approach to managing and enriching the employee lifecycle through continuous training and comprehensive succession planning.

In 2021, we significantly expanded Sonoco University , a centralized digital training hub, to provide our employees with diverse learning and career development programs.

In 2021 and 2022, we significantly expanded Sonoco University, our internal learning resource that offers on-demand webinars, e-learning and in-person learning programs.

Sonoco also provides employees access to self-directed e-learning courses taught by industry experts with curated learning paths designed for specific professional interests.

In addition, we conduct regular talent succession assessments along with individual performance reviews in which managers provide regular feedback and coaching to assist with the development of our employees, including the use of individual development plans to assist with individual career development.

We are also committed to pay equity and regularly review our compensation model to promote more fair and inclusive pay practices across our business.

We offer competitive benefits packages that reflect the needs of our workforce.

In the United States, we provide medical, dental, and vision benefits, life and disability coverage, education reimbursement, and paid time off.

We provide retirement benefits including a 401(k)-match program.

Our executive compensation program is designed to align incentives with achievement of the Company’s strategic plan and both short- and long-term operating objectives.

(e) Available Information –

8 unchanged sentences

or accessible through Sonoco’s website is not incorporated into this Annual Report on Form 10-K.

The references to Sonoco’s websites are

All references to Sonoco’s websites are

intended to be inactive textual references only.

2 unchanged sentences

Name Age Position and Business Experience for the Past Five Years

Executive Committee

Howard Coker 59 Board member since 2020.

President and Chief Executive Officer.

Executive Officers

Howard Coker 60 Board member, President and Chief Executive Officer since 2020.

Previously, Senior Vice President, Global Paper and Industrial Converted Products, 2019-2020;

Senior Vice President, Rigid Paper Containers and Paper/Engineered Carriers International, 2017-2018;

Group Vice President, Global Rigid Paper & Closures, and Paper & Industrial Converted Products, EMEA, Asia, Australia / New Zealand, 2015-2017.

Prior to 2015, Group Vice President, Global Rigid Paper & Plastics;

Vice President, Global Rigid Paper & Closures;

Vice President & General Manager, Rigid Paper & Closures, N.A.;

Division Vice President & General Manager, Rigid Paper & Closures.

Group Vice President, Global Rigid Paper and Closures, and Paper and Industrial Converted Products, EMEA, Asia, Australia / New Zealand, 2015-2017.

Joined Sonoco in 1985.

1 unchanged sentence

Haley, Chairman of Sonoco’s Board of Directors.

54 Vice President, Chief Financial Officer.

Previously Vice President, Treasurer / Assistant Chief Financial Officer, 2017-2018;

Vice President, Finance and Investor Relations & Treasurer for Esterline Technologies Corporation, 2015-2017;

Finance Director, Customer Service Aircraft Systems for United Technologies, 2012-2015;

Vice President, Finance Goodrich Customer Services, Goodrich Corporation, 2010-2012.

Joined Sonoco in 2017.

Dillard 47 Vice President, Corporate Development.

Previously Staff Vice President, Corporate Development 2018-2019;

Dillard 48 Chief Financial Officer since June 2022.

Previously, Chief Strategy Officer, April-June 2022;

Vice President, Corporate Development, 2018 - March 2022;

President of Personal Care Europe and Vice President of Strategy and Innovation at Domtar Personal Care, a division of Domtar Corporation, 2016-2018.

Joined Sonoco in 2018.

Florence, Jr.

43 Vice President, General Counsel, Human Resources and Secretary.

Previously Corporate Vice President, General Counsel and Secretary, 2016-2019;

Corporate Attorney, 2015-2016.

Prior experience:

Attorney with Haynsworth Sinkler Boyd, P.A., Columbia, SC, 2005-2015.

Joined Sonoco in 2015.

Fuller 60 Executive Vice President Global Industrial and Consumer.

Previously Senior Vice President, Global Consumer Packaging, Display and Packaging and Protective Solutions, 2019-2020;

Fuller 61 Chief Operating Officer since April 2022.

Previously, Executive Vice President, Global Industrial and Consumer, 2020-2022;

Senior Vice President, Global Consumer Packaging, Display and Packaging and Protective Solutions, 2019-2020;

Senior Vice President, Paper/Engineered Carriers U.S./Canada and Display and Packaging, 2017-2018.

Group Vice President, Paper & Industrial Converted Products, Americas, 2015-2017;

Group Vice President, Paper/Tubes and Cores N.A., 2013-2015;

Vice President, Global Rigid Plastics & Corporate Customers, 2011-2013;

Vice President, Global Rigid Paper & Plastics, January-October 2011;

Vice President, Global Rigid Paper & Closures, 2008-2011;

Vice President, Rigid Paper & Plastics N.A., 2005-2008;

Division Vice President & General Manager, Consumer Products N.A., 2000-2005.

Joined Sonoco in 1985.

Johnson 54 Vice President and Chief Information Officer.

Previously Vice President and Chief Information Officer of HNI Corporation, a global manufacturer of office furniture and hearth products, 2011-2019.

Currently, member of the Board of Directors for The Marvin Companies, Inc.

Florence, Jr.

44 General Counsel, Secretary, Vice President and General Manager Converted Products North America since June 2022.

Previously, Vice President, General Counsel, Human Resources and Secretary, 2019-2022.

Corporate Vice President, General Counsel and Secretary, 2016-2019;

Joined Sonoco in 2015.

Schrum 66 Vice President, Investor Relations & Corporate Affairs.

Previously Staff Vice President, Investor Relations & Corporate Affairs, 2005-2009.

Sean Cairns 52 President, Global Rigid Paper Packaging since April 2022.

Previously, Vice President and General Manager Rigid Paper Products Europe, 2008-2022.

Joined Sonoco in 2008.

Other Corporate Officers

Grissett 52 Vice President, Global Flexible Packaging effective November 1, 2021.

Previously Division Vice President and General Manager of Global Flexibles, 2019-2021;

Division Vice President and General Manager of Protective Solutions, 2017-2019;

Division Vice President and General Manager Thermosafe, 2013-2017.

Grissett 53 President, Global Flexibles Division since April 2022.

Previously, Vice President and General Manager Global Flexibles, 2019-2022;

Vice President and General Manager Global Protective Solutions, 2017-2019.

Joined Sonoco in 1993.

Harrell III 60 Vice President Americas Industrial.

Previously Vice President Tubes & Cores, US and Canada, 2016-2020;

Vice President, Tubes & Cores N.A., 2010-2015;

Vice President & General Manager, Industrial Converted Products, 2009-2010;

Division Vice President & General Manager, Paper, N.A., 2008-2009;

Staff Vice President, Global Operating Excellence, Industrial Products, 2007-2008;

Division Vice President, Industrial Products/ Paper-Europe, 2002-2007.

Harrell III 61 President, Global Industrial Paper Packaging since April 2022.

Previously, Vice President, Industrial Americas, Asia and Conitex, 2020-2022;

Vice President Tubes & Cores, US and Canada, 2016-2020.

Joined Sonoco in 1985.

Haynes III 49 Vice President, Rigid Paper Containers, North America, effective November 1, 2021.

Previously Division Vice President and General Manager of Rigid Paper Containers, North America 2018-2021;

Division Vice President of Manufacturing, Tubes and Cores, U.S.

Haynes III 50 President, Metal Packaging since March 2022.

Previously, Vice President, Rigid Paper Containers, North America, 2021-2022;

Division Vice President and General Manager of Rigid Paper Containers, North America, 2018-2021.

Division Vice President and General Manager of Tubes and Cores, U.S.

and Canada, 2015-2018.

Director of Manufacturing, Metal Ends & Closures 2012-2015.

Joined Sonoco in 1997.

Tomaszewski 53 Vice President, North America Consumer and Global Rigid Paper & Closures.

Previously Division Vice President and General Manager – Global Rigid Paper and Closures, Display and Packaging and Paperboard Specialties, 2019-2020;

Division Vice President and General Manager of Rigid Paper Containers, NA and Display and Packaging, 2018-2019;

Division Vice President, Rigid Paper Containers, NA, 2015-2018;

Division Vice President and General Manager of Global Display and Packaging and Packaging Services, 2013–2015.

Tomaszewski 54 President, Diversified Businesses since April 2022.

Previously, Vice President, North America Consumer and Global Rigid Paper and Closures, 2020-2022;

Division Vice President and General Manager – Global Rigid Paper and Closures, Display and Packaging and Paperboard Specialties, 2019-2020;

Division Vice President and General Manager of Rigid Paper Containers, North America and Display and Packaging, 2018-2019;

Division Vice President, Rigid Paper Containers, North America, 2015-2018.

Joined Sonoco in 2002.

53 Vice President, Paper & Industrial Converted Products, EMEA, Australia and New Zealand.

Previously Vice President, Paper & Industrial Converted Products, EMEA, Asia, Australia and New Zealand, 2015-2019;

Vice President, Global Tubes & Cores, 2015;

Vice President, Industrial Europe, 2014;

Division Vice President and General Manager, Industrial Europe, 2011-2014.

Weeks 55 Vice President, Investor Relations and Corporate Affairs, since April 2022.

Previously Senior Vice President, Head of Investor Relations and Chief Strategy Officer at Benchmark Electronics, Inc.

Vice President, Strategy and Investor Relations at Benchmark Electronics, Inc., 2012-2020.

Joined Sonoco in 2022.

54 Vice President Global Paper Products-Europe since April 2022.

Previously Vice President, Paper and Industrial Converted Products, EMEA, Australia and New Zealand, 2015-2022.

Joined Sonoco in 2003.

8 FORM 10-K SONOCO 2022 ANNUAL REPORT

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