About Sonoco Products

Sonoco Products Company (Sonoco) operates as a global designer, developer, and manufacturer of a variety of highly engineered and sustainable packaging serving multiple end markets. As of December 31, 2023, the company had approximately 310 locations in 33 countries, serving some of the world's best-known brands in some 85 nations. Segments The company operates through two reportable segments: Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. Effective January 1, 2024, the company will integrate its flexible packaging and thermoforming packaging businesses within the Consumer Packaging segment in order to streamline operations, enhance customer service, and better position the business for accelerated growth. As a result, the company will change its operating and reporting structure to reflect the way it plans to manage its operations, evaluate performance, and allocate resources going forward. Therefore, in future reporting periods, the company's consumer thermoforming businesses will move from the All Other group of businesses to the Consumer Packaging segment. The company's Industrial Paper Packaging segment will not be affected by these changes. Consumer Packaging The operations in Consumer Packaging segment consisted of approximately 80 plants throughout the world as of December 31, 2023. 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. The company's 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 acquisition of Metal Packaging in 2022, the company expanded its manufacturing capability in steel and aluminum metal fabrication beyond the company's existing metal ends and closures products to include metal food and household packaging products for vegetables, tomatoes, fruit, spray cleaners, paint, and other products. The company's rigid plastic products are consisted of thermoformed plastic trays and enclosures for fresh produce, condiments, and pre-packaged foods. The company's flexible packaging primarily consisted of plastic packaging serving a variety of food and personal product applications where high-barrier properties are critical for freshness and shelf-life. In 2023, Sonoco's rigid paper containers were the company's largest revenue-producing group of products and services, representing approximately 21% of the company's consolidated net sales in the year ended December 31, 2023. Industrial Paper Packaging The Industrial Paper Packaging segment served its markets through approximately 190 plants on five continents as of December 31, 2023. Sonoco's paper operations provide the primary raw material for the company's fiber-based packaging. Sonoco uses approximately 52% of the paper it manufactures, and the remainder is sold to third parties. This vertical integration strategy was supported by 23 paper mills with 30 paper machines throughout the world as of December 31, 2023. The company also operates 24 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 2023, Sonoco had the capacity to manufacture approximately 2.2 million tons of recycled paperboard per year. Products within the Industrial Paper Packaging segment primarily consist of goods produced from recycled fiber, including paperboard tubes, cores, cones and cans; partitions; 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 consumer staples (food and beverage, food distribution, household and personal products), consumer discretionary (home building, appliances, apparel, and home furnishings), and industrials (construction and building products, and industrial distribution), as well as various other end markets. In 2023, Sonoco's tubes and cores products were the company's second largest revenue-producing group of products, representing approximately 19% of the company's consolidated net sales in the year ended December 31, 2023. All Other The operations in All Other consisted of approximately 40 plants throughout the world as of December 31, 2023. 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 its divestiture in April 2021, the company's U.S. global display and packaging business, which included point-of-purchase displays, fulfillment operations, and contract packaging, was reported in All Other. Product Distribution Each of the company's operating units has its own sales staff and maintains direct sales relationships with its customers. Some of the units have service staff at the manufacturing facility that interact directly with customers. The Industrial Paper Packaging segment and certain operations within the Consumer Packaging segment have customer service centers located in Hartsville, South Carolina, which are the main contact points between their North American business units and their customers. Divisional sales personnel also provide sales management, marketing, and product development assistance as needed. Typically, product distribution is directly from the manufacturing plant to the customer but, in some cases, product is warehoused in a mutually advantageous location to be shipped to the customer as needed. Patents, Trademarks, and Related Contracts The 2023 acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill resulted in the company acquiring trademarks including RTS Packaging, Wineguard, Ultra Guardian, RigidWall, and Renew 100, among others. Patents and proprietary technology are managed globally by a Sonoco intellectual capital management team through the company's subsidiary, Sonoco Development, Inc. ('SDI'). Sonoco also licenses patents from outside companies and universities. The U.S. patents typically expire twenty years after filing, and patents on new innovations replace many of the abandoned or expired patents. A second intellectual capital subsidiary of Sonoco, SPC Resources, Inc., globally manages Sonoco's trademarks, service marks, copyrights, and internet domain names. Most of Sonoco's products are marketed worldwide under trademarks, such as Sonoco, SmartSeal, Sonotube, Sealclick, Sonopost, and UltraSeal, among others. Seasonality Although demand for the majority of the company's products is not seasonal to any significant degree, the company's Metal Packaging operations generally experience higher sales and operating profits during the second and third quarters of the year (year ended December 2023) as demand for certain products increases during the peak of the food packaging season. Research and Development The company's research and development costs totaling approximately $29,300 in 2023. History Sonoco Products Company, a South Carolina corporation, was founded in 1899 as the Southern Novelty Company.