Avery Dennison Corporation (AVY) Business Profile

What it does

Avery Dennison makes materials and identification products that help businesses label, decorate and track physical goods. Founded in 1935 and headquartered in Glendale, it is led by President and Chief Executive Officer Deon M. Stander.

Its Materials Group makes self-adhesive label materials, graphics films, reflective products and bonding materials such as tapes. A self-adhesive label sticks when pressed onto a surface, without needing heat or moisture to activate the adhesive. Avery Dennison sells label materials in rolls or sheets to converters, which turn them into products for uses such as package decoration, shipping and product information.

Its Solutions Group supplies branding and information products, including garment tags, labels, price tickets and shelf-edge materials. It also makes radio-frequency identification, or RFID, inlays and tags. These give physical items a digital identity that customers can use to improve visibility and manage inventory or losses.

Customers use its products in industries including food and grocery, apparel, retail, logistics, pharmaceuticals, automotive and personal care. The company also develops software applications that connect physical products with digital information. Its offerings range from materials used by other manufacturers to finished tags and systems used by retailers and brands.

How it makes money

Avery Dennison earns sales through two groups. Materials Group supplies pressure-sensitive label materials, films and tapes to converters and other customers. Solutions Group supplies branding, identification, pricing and retail productivity products. The groups represented approximately 69% and 31%, respectively, of total net sales in fiscal 2025.

Materials Group products start with face materials such as paper, plastic film or metal foil. These are coated with adhesive and laminated with a backing, then sold in rolls or sheets. Converters use them to make labels for packaging and other applications. The group also sells graphics films for signs and vehicles, reflective products for traffic and safety, and tapes for bonding and sealing in industries including automotive and construction.

Solutions Group sells physical products such as brand embellishments, tickets, tags and labels alongside item-level RFID, loss-prevention and shelf-edge solutions. Its RFID products enable a digital identity for individual items; the group also offers data-management and other information solutions. Avery Dennison has begun offering software as a service to U.S. grocery retailers.

In 2025, organic net sales were comparable to the prior year; in the third quarter of 2026, reported sales were $2.3 billion.

Pricing and input costs affect results. In 2025, higher volume was offset by price reductions related to raw-material deflation. In the third quarter of 2026, sales growth included price increases intended to offset raw-material inflation. Materials Group is generally not seasonal, apart from certain outdoor graphics, construction and reflective products.

Customers and how it sells

Avery Dennison serves converters, brands, retailers and industrial customers. Its label materials reach food, beverage, personal care, pharmaceutical and logistics markets through converters. Graphics products go to customers including sign shops, commercial printers and designers, while tapes are used in automotive, electronics, construction, medical and other applications.

The Solutions Group serves apparel, general retail, food and grocery, and logistics customers with branding and identification products. Avery Dennison has used its loss-visibility solution with Inditex. It is also working on Walmart’s Fresh RFID program; the program’s start moved past the second half of 2026.

International operations accounted for approximately 69% of 2025 net sales, and approximately 40% of net sales originated in emerging markets. At December 31, 2025, the company operated over 200 manufacturing and distribution facilities and had locations in more than 50 countries. Its workforce was also internationally distributed, with approximately 83% of employees located outside the U.S. at year-end.

Avery Dennison said customer stocking and destocking had largely occurred in Europe and parts of Asia. It expected remaining destocking in the fourth quarter of 2026 to come largely from Europe.

Suppliers and costs

Avery Dennison buys paper, plastic films, resins and specialty chemicals from commercial and industrial sources. These materials are generally available, although shortages can occur and prices can fluctuate. Its self-adhesive products use both internally developed and purchased adhesives.

The company produces most of its self-adhesive materials using water-based emulsion and hot-melt adhesive technologies. Some manufacturing also uses organic solvents. It invests in solvent capture and control equipment to help manage regulated emissions, and has developed adhesive systems that reduce solvent use.

Raw materials, energy and labor are important influences on sales and profitability. Avery Dennison uses pricing and material re-engineering to address changes in input costs. In the third quarter of 2026, the company said those actions were largely covering inflation on a dollar basis, although passing through higher material costs affected its margin percentage. Higher employee-related costs also affected Materials Group’s margin.

Avery Dennison said it was not seeing supply bottlenecks in the third quarter of 2026. Its manufacturing and distribution operations span multiple countries, with facilities supporting both materials and identification products.

Competitive position

In label materials, Avery Dennison’s larger competitors include UPM Adhesive Materials, Fedrigoni Self-Adhesives, Lintec and Flexcon, alongside regional and local suppliers. In graphics and reflective products, its largest competitors include 3M and Orafol. In performance tapes, it competes with 3M, Tesa and Nitto Denko, as well as regional and specialty suppliers.

Solutions Group competitors include Checkpoint Systems, R-pac, SML Group, Arizon RFID Technology and Tageos. The group competes across identification, branding and information solutions.

Avery Dennison believes technical knowledge and capital requirements limit entry into pressure-sensitive adhesives and materials. It also identifies its scale, product range, innovation, distribution and service as competitive advantages. In Solutions Group, it points to its ability to serve customers near where they manufacture, source and sell.

Our reading: Technical and capital requirements provide some protection in label materials, but the presence of several larger competitors limits how much can be inferred about the strength of that protection. Our reading: Global manufacturing and distribution can help serve customers across regions, although competitors also operate in several of the same product markets. Our reading: Innovation and patents support differentiation, but the company says losing individual patents or licenses would not be material to either segment or the company as a whole.

Growth opportunities

Avery Dennison is investing in materials science, identification and software applications that connect physical goods with digital information. Its research includes adhesives, films and coating processes in Materials Group, and RFID, digital solutions and printing technologies in Solutions Group. It also develops products intended to reduce materials and waste or enable recycling.

Intelligent labels are one area of expansion. In the third quarter of 2026, intelligent-label sales rose in apparel and general retail as customers expanded programs, while logistics sales declined as earlier share gains normalized and customer demand softened. Avery Dennison said it was expanding pilots with logistics partners.

The company estimates the food intelligent-label market at at least 200 billion units. It said a third large grocer was in the early stages of a commercial rollout and that food pilots and trials were underway in the U.S. and Europe. It expects a commercial ramp for Walmart’s Fresh program during 2027 after the program’s start moved past the second half of 2026.

Acquisitions are another part of the company’s approach. In 2025, it acquired flooring adhesives business Taylor Adhesives for approximately $390 million, expanding the Materials Group portfolio. For full-year 2026, Avery Dennison expects reported sales growth of approximately 5.5%, including organic sales growth of approximately 3.5%.

Structural risks

• Economic and geopolitical conditions: Worldwide economic, geopolitical, social and labor conditions affect demand. Avery Dennison also serves discretionary and cyclical markets, including industrials, durables and apparel; it says the indirect effects of tariffs on demand are uncertain.

• Input and labor costs: Sales and profitability depend on the availability and cost of raw materials and energy, and on the company’s ability to control or offset increases in material and labor costs. Raw-material prices can fluctuate significantly.

• Customer inventory and demand: Customers built and subsequently reduced inventory in Europe and parts of Asia. Avery Dennison expects the remaining pre-buy inventory to unwind largely by the end of the fourth quarter of 2026, but says the timing has been difficult to predict.

• Technology disruption: A significant disruption to the information-technology infrastructure that stores information and runs operations could materially affect the business. Inadequately acquiring or protecting intellectual property, or infringing others’ rights, could also harm its ability to compete or grow.

• Financing and liabilities: A significant increase in indebtedness or a credit-rating downgrade could make financing harder to obtain on acceptable terms. Pension assets and liabilities are exposed to market, interest and credit risks.

Bottom line

Our reading

Avery Dennison combines a global materials business with branding and identification products used to put information on physical goods. Our reading: Its converter relationships, manufacturing reach and technical capabilities support that model, while RFID adoption offers another path for growth. Its exposure includes input-cost swings, customer inventory cycles and the timing of large identification programs.