Avery Dennison Corporation (AVY): PESTLE Analysis [Nov-2025 Updated]

You need a clear, actionable breakdown of the macro-environmental forces shaping Avery Dennison Corporation (AVY) right now. This PESTLE analysis cuts straight to the risks and opportunities, grounded in the latest 2025 data, so you can see where the company is gaining ground and where it's exposed.

Avery Dennison Corporation (AVY) is navigating a complex 2025 landscape where geopolitical instability and raw material costs clash with massive opportunities in digital identification and sustainability. The direct takeaway is this: their core business is resilient, but future growth is defintely tied to scaling high-value, tech-enabled products like Intelligent Labels while managing a fragmented global regulatory environment. We're going to map the near-term risks and clear actions you should focus on.

Political Factors: Geopolitical Tensions & Trade Tariffs

Geopolitical tensions, particularly involving China and the Middle East, are the primary disruptor here. They don't just create noise; they directly increase material sourcing costs and mess up global supply chain predictability. For instance, trade policy changes led to lower sourcing demand in apparel during Q2 2025, which impacts a core segment of their business.

The need for political stability is crucial for their long-term capital investment planning, but that stability is a rare commodity right now. Also, evolving government policies on environmental standards are forcing product shifts, which is a cost upfront but an opportunity for their sustainable portfolio later. Geopolitical risk is the new raw material cost.

Economic Factors: Strong Revenue Growth Meets Cost Headwinds

The 2025 financial outlook is strong, but not without friction. Avery Dennison Corporation is projected to hit an annual revenue of $10,345 million, marking a robust 17.96% increase year-over-year. Here's the quick math: the projected 2025 non-GAAP earnings per share (EPS) of $12.74 indicates a healthy profitability trajectory.

But, you still have to contend with two major headwinds. First, raw material cost and availability remain a significant near-term risk. Second, foreign currency fluctuations are negatively impacting both full-year net sales and operating income. Plus, high interest rates can hinder customer purchasing of non-essential products, especially in slower economic segments. Profitability is strong, but currency is a headwind.

Sociological Factors: The Demand for Transparency and Flexibility

The workforce and consumer landscape are both pushing for change. Employees are demanding flexible work and improved work-life balance, which is a non-negotiable for attracting top talent, especially Gen Z. On the consumer side, there is growing public pressure for brands to provide item-level supply chain transparency, which is a direct opportunity for Avery Dennison Corporation's digital solutions.

The company is addressing this internally with a corporate goal to achieve 40% women in manager level and above by the end of 2025. This focus on purpose-driven work and mental health support is critical for retention. Honestly, transparency is now a core product requirement, not a marketing talking point.

Technological Factors: The Digital Identification Pivot

This is where Avery Dennison Corporation is spending its capital and seeing high returns. The Intelligent Labels category, a high-value segment, showed high single-digit growth in Q1 2025. This growth is driven by the strategic adoption of Radio-Frequency Identification (RFID) for item-level tracking, which is essential for inventory management and loss prevention.

They are also heavily invested in the atma.io connected product cloud platform, which is their digital identification backbone. Internally, they are using Generative AI tools, like chatbots, to improve IT support and content, plus automation and robotics are enhancing factory efficiency and reducing waste. Digital identification is the future of their revenue mix.

Legal Factors: Navigating Regulatory Fragmentation

Compliance is getting more expensive and complex. Avery Dennison Corporation has to deal with complex, multi-jurisdictional anti-corruption and compliance laws. A major new pressure point is the European Union's Digital Product Passport (DPP) mandate, which requires detailed product information to be digitally accessible-a huge challenge but also a sales driver for their technology.

Regulatory fragmentation across regions increases compliance costs, so they must constantly monitor evolving labor laws and consumer protection regulations globally. Adherence to international trade regulations and tariff structures is also critical to keep the supply chain flowing. Global compliance is a cost center that can't be ignored.

Environmental Factors: Sustainability as a Revenue Driver

Environmental targets are not just greenwashing; they are tied to their revenue model. Avery Dennison Corporation has a goal to achieve 70% of revenue from sustainability-driven products by 2025. They are also aiming for a 26% cumulative reduction in absolute Greenhouse Gas (GHG) emissions by 2025.

Operations-wise, they are committed to 95% landfill-free operations by the end of 2025, and they target 100% certified paper sourcing, with 70% of face paper being Forest Stewardship Council (FSC)-certified by 2025. Still, increasing regulatory scrutiny on waste management and Extended Producer Responsibility (EPR) schemes means this focus must be maintained. Sustainability is a revenue driver, not just a compliance checkbox.

Avery Dennison Corporation (AVY) - PESTLE Analysis: Political factors

Geopolitical tensions (China, Middle East) disrupt global supply chains.

You are operating in an environment where geopolitical risk is a primary concern, and this directly impacts Avery Dennison Corporation's supply chain planning and costs. The company explicitly cites geopolitical uncertainty-including the Russia-Ukraine war and the Israel-Hamas war and related hostilities in the Middle East-as a significant near-term risk factor in its 2025 outlook. Honestly, this volatility is the new normal.

A recent survey of global supply chain leaders found that 55% of respondents cited geopolitical factors as a top concern in 2025, a significant jump from 35% just two years prior. Avery Dennison mitigates this by using its global manufacturing footprint, but the risk of acute supply chain failure is still heightened, forcing a constant review of sourcing and logistics routes.

Trade tariffs and fluctuating duties increase material sourcing costs.

Trade policy shifts, particularly concerning China and the US, continue to pressure the Solutions Group, which operates heavily in the apparel and general retail markets. Approximately 70% of Solutions Group sales are in these tariff-impacted end markets. However, the company's material sourcing is more diversified; the vast majority-about 90%-of global material costs are not subject to these tariffs, which is a key structural advantage.

In Q2 2025, Avery Dennison implemented sourcing and pricing actions that largely offset low-single-digit tariff-related cost increases. Here's the quick math: productivity efforts helped safeguard earnings by offsetting more than a $0.10 per share impact from tariffs on apparel and general retail sourcing volumes. The key takeaway is that tariffs are a cost to be managed, not a complete barrier.

Need for political stability to support long-term capital investment planning.

The persistent uncertainty surrounding trade policy makes long-term capital expenditure (CapEx) decisions trickier. While the company's balance sheet remains strong-with a net debt to adjusted EBITDA (non-GAAP) ratio of 2.3x at the end of the first quarter of 2025-geopolitical clarity is defintely needed for massive, multi-year factory investments.

Despite the fog, the company continues its disciplined capital deployment. In the first half of 2025, Avery Dennison returned $503 million in cash to shareholders via dividends and share repurchases, including repurchasing 2.0 million shares at an aggregate cost of $360 million. This shows confidence in the core business model, but the explicit mention of 'broader impact of trade policy is unclear' in the Q2 2025 results flags the need for political stability to unlock even greater long-term growth investments.

Evolving government policies on environmental standards drive product shifts.

Government policies on environmental, social, and governance (ESG) standards are no longer just a compliance issue; they are a market driver. The European Union's 'Fit for 55' package and the Carbon Border Adjustment Mechanism (CBAM) are forcing a product shift toward sustainable solutions.

Avery Dennison has clear, politically-driven targets for 2025 that necessitate product innovation:

• Achieve 70% of revenues from sustainability-driven products.
• Source 100% certified paper.
• Ensure 70% of all face paper is Forest Stewardship Council (FSC)-certified.

This political pressure creates a growth opportunity for high-value digital solutions, such as the Digital Product Passport as a Service (DPPaaS), which helps brands comply with new traceability regulations like the EU's Deforestation-free Products Regulation (EUDR).

Lower sourcing demand in apparel due to trade policy changes in Q2 2025.

Trade policy changes directly hit customer demand in the Solutions Group, which serves the retail apparel sector. This is a clear, quantifiable impact you need to monitor.

The Q2 2025 results confirmed that trade policy shifts led to lower sourcing demand in apparel and general retail categories. This resulted in overall apparel categories being down mid-single digits for the Solutions Group in the quarter. The segment's reported sales decreased 2.6% to $670 million in Q2 2025, with organic sales down 0.8%, reflecting this demand softness.

Avery Dennison Corporation (AVY) - PESTLE Analysis: Economic factors

You're looking for a clear map of the economic landscape Avery Dennison Corporation (AVY) is navigating in 2025, and the key takeaway is this: the company is positioned for robust profitability growth, but near-term execution hinges on managing volatile raw material costs and interest rate headwinds. We need to look past the top-line numbers to the underlying cost structure.

$10,345 million projected annual revenue for 2025, up 17.96%.

The revenue outlook for Avery Dennison Corporation is aggressive, with projections pointing toward a net sales figure of approximately $10,345 million for the 2025 fiscal year. Here's the quick math: this represents a substantial year-over-year increase of roughly 17.96% compared to the 2024 net sales of $8.8 billion. This growth is anticipated to be driven by the company's strategic focus on high-value categories, particularly in its Intelligent Labels platform, which is expected to see sales growth in the range of 10% to 15% in 2025.

Projected 2025 non-GAAP EPS of $12.74, indicating strong profitability growth.

Profitability is expected to follow suit, with a projected non-GAAP (adjusted) Earnings Per Share (EPS) of $12.74 for 2025. To be fair, this is a highly optimistic projection, as the company's own official guidance for 2025 adjusted EPS is a more conservative range of $9.80 to $10.20. Still, even the lower end of the official guidance represents a solid year-over-year increase of 7% to 12% from the 2024 adjusted EPS of $9.43, excluding currency impacts. The push for higher profitability is supported by restructuring savings, which management anticipated would contribute approximately $60 million in pre-tax savings, net of transition costs, for the full year.

Raw material cost and availability remain a significant near-term risk.

The cost and availability of raw materials-like resins, films, and paper-remain a critical near-term risk in the materials science business. While the third quarter of 2025 saw modest sequential global raw material cost deflation, the outlook for the fourth quarter is for relatively stable sequential material costs. The Materials Group's margins are constantly being tested, as the benefits from productivity and higher volume are often offset by the net impact of pricing adjustments and raw material input costs. This is a constant game of margin defense.

Foreign currency fluctuations impact full-year net sales and operating income.

With Avery Dennison Corporation operating globally, foreign currency fluctuations are a persistent factor. While the company initially projected a larger tailwind, the most recent guidance anticipates a smaller $5 million currency translation benefit to full-year 2025 operating income, which is a slight negative shift from the prior $7 million projection. This indicates that a strengthening U.S. dollar, or other unfavorable currency movements, can erode the value of international sales when translated back into dollars, creating a headwind for reported net sales and operating income.

High interest rates can hinder customer purchasing of non-essential products.

The current macroeconomic environment, characterized by elevated interest rates, presents a clear risk to customer demand, especially for non-essential or discretionary products across the company's various segments. High interest rates increase the cost of capital for customers, which can lead them to postpone or reduce large-scale purchasing of items like apparel or durable goods that use Avery Dennison Corporation's products. Plus, the company itself faces higher interest expense, which is explicitly noted as a factor partially offsetting benefits from organic growth and productivity in the Q4 2025 guidance. This is a defintely a double-edged sword.

• Monitor the net debt to adjusted EBITDA ratio, which was 2.2x at the end of Q3 2025.
• Track the cost of key inputs, as the ability to pass on raw material costs is crucial for margin protection.
• Watch for signs of a consumer spending slowdown in apparel and general retail, which are sensitive to macro uncertainty.

Avery Dennison Corporation (AVY) - PESTLE Analysis: Social factors

Strong employee demand for flexible work and improved work-life balance.

You are seeing a persistent shift in employee expectations, and Avery Dennison is defintely not immune. The demand for flexibility is now a baseline requirement, not a perk. The company has formally addressed this by implementing a 'Workplace Flexibility' program, which includes flexible schedules, remote working options, and job sharing to help employees balance their professional and personal lives.

This is a critical retention tool, especially for a global company employing approximately 35,000 people across more than 50 countries. Failing to meet this social demand risks losing key talent, which is far more expensive than adapting work models. It's a cost of doing business in 2025.

Corporate goal to achieve 40% women in manager level and above by 2025.

Avery Dennison has a clear, public goal to cultivate a diverse workforce, specifically targeting 40% female representation at the manager level and above by the end of 2025. This is a measurable commitment that ties directly to the broader social push for gender equity in corporate leadership.

Here's the quick math on where they stand, based on the latest available data, which shows the gap they must close in the near term:

The company is using programs like the Advancing Women Executives (AWE) Accelerator Program, which included 64 women in 2023, to build the internal pipeline needed to hit that 40% target.

Increased focus on purpose-driven work and mental health support, especially for Gen Z.

The modern workforce, particularly younger generations, demands that their employer's values align with their own. Avery Dennison addresses this by linking their social goals to their business strategy, aiming to 'Make a positive social impact by enhancing the livelihood of our people and communities'.

This focus on employee well-being and inclusion is measured through specific targets, including a 2030 goal of an 82% Employee Engagement score and an 85% Inclusion Index score. They are also actively reviewing compensation practices for pay equity; for instance, their Medical division in Ireland saw the mean gender pay gap drop to 11.18% in 2024, down from 15.02% in 2023.

Actions driving this purpose-driven culture include:

• Conducting global Unconscious Bias training for managers.
• Launching the Women.Empowered. development program.
• Expanding gender pay equity reviews to include U.S. racial/ethnic pay equity.

Consumer preference for transparent, tech-enabled retail experiences & Growing public pressure for brands to provide item-level supply chain transparency.

These social pressures are a massive opportunity for Avery Dennison, whose core business is providing the digital identification solutions that enable this transparency. Consumers are pushing for verifiable sustainability and sourcing data, and the company's technology is the key enabler.

The company's Intelligent Labels business, which delivers item-level visibility via Radio Frequency Identification (RFID) technology, is a direct response to this trend. This segment is a growth engine: the Solutions Group, which includes Intelligent Labels, had Q3 2025 reported sales of $700 million, with high-value categories like Intelligent Labels seeing growth in the mid-single digits.

The market need is clear: a Q1 2025 Avery Dennison report indicated that 25% of US and UK fashion retailers still have 'limited or no visibility' at the item level in their supply chains. This lack of visibility is why 65% of surveyed supply chain leaders believe investment in better tech like RFID tagging is crucial for improvement. Avery Dennison's atma.io connected product cloud is already connecting over 30 billion unique items globally as of late 2025, showing their scale in addressing this critical social and regulatory demand.

Avery Dennison Corporation (AVY) - PESTLE Analysis: Technological factors

The core of Avery Dennison Corporation's technological strategy in 2025 is the fusion of physical materials science with digital identification, primarily through radio-frequency identification (RFID) and cloud platforms. This isn't just about selling labels; it's about selling item-level data and supply chain intelligence. Your investment thesis here should recognize that the company is transitioning from a materials provider to a digital solutions enabler.

Intelligent Labels, a high-value category, showing high single-digit growth in Q1 2025.

Intelligent Labels, which includes their digital identification and RFID products, is a clear growth engine. In Q1 2025, the high-value categories within the Materials Group, which includes Intelligent Labels, saw organic growth in the high single digits overall. This is a strong signal, especially when you consider the Solutions Group's high-value categories, where Intelligent Labels also showed low single-digit organic growth. For a company that reported total net sales of $2.1 billion in Q1 2025, this segment is defintely where the higher margins and future value reside.

The company continues to target an aggressive enterprise-wide long-term organic sales growth rate of ~15%+ for Intelligent Labels, showing management's confidence in this technology's market penetration.

Strategic adoption of RFID (Radio-Frequency Identification) for item-level tracking.

The strategic deployment of RFID is moving beyond apparel retail-its traditional stronghold-into new, high-growth sectors. This technology is crucial for item-level visibility, which allows customers to track a product from its raw material source to the consumer and beyond.

A prime example of this expansion is the company's July 2025 launch of its RFID-enabled In-Mold Label (IML) solutions, which directly addresses the need for enhanced traceability in durable goods and packaging. Furthermore, a partnership with a major US retailer (Walmart) is using RFID-embedded labels in the bakery department to improve freshness management and operational efficiency, proving its value in the food sector.

Here's the quick math on efficiency gains from a recent deployment:

Investment in the atma.io connected product cloud platform for digital identification.

The atma.io connected product cloud is the digital backbone for the entire Intelligent Labels strategy. It's the platform that assigns and manages unique digital identities for physical items. The sheer scale of this investment is evident in its current reach: the platform now manages over 30 billion unique items globally. This massive data set creates a significant competitive moats (network effect) and provides unparalleled end-to-end transparency for brands.

The platform is the core software component of the Optica™ portfolio, an end-to-end suite of solutions that combines RFID hardware, software, and services to give brands greater control and visibility over their supply chains. One clean one-liner: atma.io is how they monetize the Internet of Things.

Use of Generative AI tools like chatbots to improve internal IT support and content.

Avery Dennison is applying Generative AI (Artificial Intelligence) to drive efficiency, particularly within its digital solutions. While the initial integration of tools like ChatGPT (OpenAI's AI chatbot) occurred in 2023, the capability is now a standard feature within the atma.io platform.

The primary use case is automating alert response and speeding up communication among supply chain partners. The goal is to reduce the time sourcing and supply chain managers spend on repetitive, manual tasks like chasing information via email, allowing them to focus on high-value, strategic decisions.

Automation and robotics are being used to enhance factory efficiency and reduce waste.

The company's internal operations are increasingly leveraging automation and robotics to meet ambitious sustainability goals, which directly translates to factory efficiency and waste reduction. This is a critical action because labor challenges and the push for operational efficiency are major industry trends.

The focus on eliminating waste is explicitly linked to their 2025 targets:

• Eliminate 70% of the matrix and liner waste from the value chain by 2025.
• Achieve a goal of having 75% of all operational waste reused, repurposed, or recycled by 2025.
• As of 2022, the company had already diverted 93% of its solid waste from landfills, demonstrating a strong trajectory toward the 2025 goal.

The technology is being used to capture and manage real-time data to identify and eliminate waste, a process that is essential for a more circular economy.

Avery Dennison Corporation (AVY) - PESTLE Analysis: Legal factors

Compliance with complex, multi-jurisdictional anti-corruption and compliance laws

You might think of a global materials science company as mainly dealing with chemistry and logistics, but honestly, the biggest legal risk is often just making sure everyone plays by the rules everywhere. For Avery Dennison, this means navigating a maze of anti-corruption and trade compliance laws across the 50+ countries they operate in. The company's 2025 risk disclosures clearly flag the impact of legal proceedings, including compliance and anti-corruption, as a significant near-term risk.

The stakes are high. The U.S. Department of Justice (DOJ) has been aggressive, with penalties related to the Foreign Corrupt Practices Act (FCPA) and sanctions evasion increasing significantly in 2024, setting a tough precedent for 2025. Avery Dennison manages this by requiring managers and above to complete an annual Compliance Certification. They also run a global investigations system that processes at least 200 reports annually via their Business Conduct GuideLine (whistleblower hotline) to catch issues fast.

Pressure from the EU's Digital Product Passport (DPP) mandate for product information

The European Union's Digital Product Passport (DPP) isn't just a green initiative; it's a massive legal mandate for product information traceability. It forces companies to provide a digital record of a product's origin, composition, and end-of-life management-a huge undertaking for materials and labeling suppliers. The official rollout for key sectors like apparel and textiles is slated to begin by 2027, but the preparation is a critical 2025 legal and operational hurdle.

Avery Dennison is defintely ahead of the curve here. They are an associate member of the CIRPASS-2 consortium, which advises the EU on the DPP's implementation. This first-hand knowledge has allowed them to launch DPP as a Service (DPPaaS), a solution that helps their brand customers meet the pending requirements under the Eco-design for Sustainable Product Regulation (ESPR).

Regulatory fragmentation across regions increases compliance costs and complexity

The challenge with global operations is that you don't just comply with one set of laws; you comply with dozens that often contradict or overlap. This regulatory fragmentation significantly drives up compliance costs. Europe continues to lead with stringent, advanced policies, but the US also presents a patchwork of state-level rules.

For example, in the US, Avery Dennison must proactively address state-specific consumer protection and environmental laws:

• California Proposition 65: Requires warnings for chemicals known to cause cancer or reproductive harm, impacting material formulations.
• Phenol Restrictions: Stricter regulations in California and Washington are driving the need for phenol-free thermal paper, with bans starting as early as 2026.

The company has had to create a dedicated Avery Dennison Compliance Service just to help its customers navigate this complexity, providing tailored regulatory documents and expert support.

Need to monitor evolving labor laws and consumer protection regulations globally

Beyond product-level compliance, the legal landscape for human capital and consumer rights is constantly shifting. Avery Dennison's risk factors highlight the need to manage Human Capital issues, including recruitment, retention, and collective labor arrangements globally.

On the labor front, adherence to forced labor regulations in supply chains is a major 2025 trade compliance trend, especially as governments demand greater accountability from businesses. The company's terms and conditions explicitly state compliance with the Fair Labor Standards Act (FLSA) for its manufactured products. On the consumer side, compliance with the U.S. Consumer Product Safety Improvement Act (CPSIA) is non-negotiable for their products used in consumer goods.

Adherence to international trade regulations and tariff structures is critical

Trade policy remains one of the most volatile legal factors impacting Avery Dennison in 2025. The company's Solutions Group is heavily exposed, with approximately 70% of its sales in tariff-impacted apparel and general retail end markets.

In Q2 2025, the company's management reported that tariff-related cost increases were in the low-single-digit range, but they were largely offset by proactive sourcing and pricing adjustments. In a concrete example of the direct impact, Avery Dennison Fastener Solutions implemented a 6% price increase on specific products like Swiftach® and Plastic Staple® in April 2025 due to new tariffs on items sourced from Korea and Japan.

Here's the quick math on trade impact and mitigation:

The company's global footprint actually offers an opportunity: high tariffs on Chinese apparel exports can encourage brands to shift sourcing to other countries, which Avery Dennison can facilitate with its global supply chain solutions.

Avery Dennison Corporation (AVY) - PESTLE Analysis: Environmental factors

The environmental landscape for Avery Dennison Corporation (AVY) in 2025 is defined by a dual focus: meeting ambitious, self-imposed sustainability targets and navigating a rapidly tightening global regulatory framework, particularly around waste and packaging. Honestly, the company has done a defintely good job in exceeding several of its 2025 goals ahead of schedule, which puts them in a strong position against competitors who are just now playing catch-up.

Goal to achieve 70% of revenue from sustainability-driven products by 2025.

Avery Dennison is nearly at its goal of having 70% of its revenue tied to sustainability-driven products, defined as those conforming to its environmental and social guiding principles (Sustainable ADvantage standard). As of the 2024 results reported in March 2025, the company's Materials Group (Label and Graphic Materials) hit 69% of revenue, and the Solutions Group (Apparel Solutions) reached 66% of revenue. This near-term goal is a clear indicator that sustainable innovation is a core revenue driver, not just a compliance cost.

Here's the quick math: the Materials Group needs just a 1% increase to hit the 70% target. That's a strong position to be in heading into the final year of the target period.

Commitment to 95% landfill-free operations by the end of 2025.

The commitment to drastically reduce manufacturing waste sent to landfills is a key operational metric. The target is to achieve 95% landfill-free operations. The company is very close to this goal, reporting that its operations were 94% landfill-free as of the 2024 results. The remaining 1% gap represents a final push on waste-to-energy or advanced recycling programs for the hardest-to-handle waste streams.

Target of 100% certified paper sourcing, with 70% FSC-certified face paper by 2025.

The company has largely met and, in one critical area, exceeded its paper sourcing goals, which is crucial given its role as a major global purchaser of paper materials. As of 2024, 97% of all paper was certified, nearly hitting the 100% goal. More impressively, the Forest Stewardship Council (FSC)-certified face paper target of 70% was surpassed, reaching 80% in the 2024 results. This over-delivery mitigates supply chain risk and appeals directly to brand owners facing their own deforestation-related scrutiny.

Aiming for at least a 26% cumulative reduction in absolute GHG emissions by 2025.

Avery Dennison has significantly outperformed its initial Greenhouse Gas (GHG) emissions reduction target. The original goal was a minimum of 26% cumulative reduction in absolute GHG emissions from a 2015 baseline by 2025. They blew past this years ago, reporting a 54% cumulative GHG emissions reduction in their 2024 results. This achievement is why the company has already set a much more aggressive 2030 goal: a 70% reduction in Scope 1 and 2 GHG emissions from the 2015 baseline.

The table below summarizes the company's progress against its key 2025 environmental targets using the latest available data:

Increasing regulatory scrutiny on waste management and Extended Producer Responsibility (EPR) schemes.

The most significant near-term risk and opportunity lies in the rapid expansion of Extended Producer Responsibility (EPR) schemes, which shift the financial and operational burden of managing post-consumer packaging waste from municipalities to the producers. This is a massive change for all packaging and labeling companies.

In the U.S., the patchwork of state laws is solidifying, with seven states now having enacted packaging EPR laws, including populous states like California, Oregon, and Washington. Producers in Oregon, for example, saw fee obligations begin on July 1, 2025, while producers in Colorado must submit 2024 packaging data by July 31, 2025.

In Europe, the new Packaging and Packaging Waste Regulation (PPWR), which came into force in February 2025, creates a uniform, stricter legal framework across all 27 EU member states. This regulation mandates:

• Mandatory recyclability for all packaging by 2030.
• Minimum recycled content quotas for plastic packaging.
• Eco-modulation of fees, where producers pay less for packaging that is easier to recycle.

This eco-modulation trend is a clear opportunity for Avery Dennison. Their innovation in products like CleanFlake-a wash-off adhesive that allows PET plastic to be recycled without label contamination-directly lowers the EPR fees for their brand-owner customers in markets like The Netherlands and France, making their solutions a competitive advantage.

Finance: Monitor new EPR compliance costs in Maryland and Washington, which both passed laws in May 2025, and factor potential fee increases into Q4 2025 cost of goods sold (COGS) projections.