From Compliance to Circularity: A Design‐Led Approach to Recyclable Packaging

ABSTRACT The transition to recyclable packaging is a strategic priority for the Fast‐Moving Consumer Goods (FMCG) sector, aligning with the EU Packaging and Packaging Waste Regulation (PPWR). Adapting to regulatory uncertainty and integrating evolving recyclability criteria require not only technical innovation but also organisational transformation and cross‐functional alignment. This paper investigates how FMCG companies can develop dynamic capabilities to embed recyclability into packaging design, balancing sustainability, functionality and business viability. This paper aims to develop and validate design‐led toolkits that enable FMCG companies to integrate recyclability and regulatory compliance into packaging innovation in alignment with the EU PPWR. Drawing on a mixed‐methods approach combining literature review, stakeholder interviews and a case study within the case company's packaging division, we develop and validate strategic and tactical roadmaps and a recyclable‐ready design process template. The toolkits support managerial decision‐making by enabling regulatory preparedness, sustainable innovation and enhanced collaboration across R&D, marketing and supply chain functions. By framing recyclability as both a design and strategic organisational challenge, this paper positions PPWR compliance readiness as a dynamic capability and offers actionable frameworks for FMCG companies' transition towards circular packaging in a complex regulatory landscape. The findings contribute to sustainability‐oriented innovation literature and provide practical recommendations and solutions to managers and decision‐makers aiming at sustainable packaging transitions while maintaining competitive advantage.