Innovation and capability across packaging continue to advance, even as sustainability timelines shift across the Australian market. Here are 5 top trends to watch in 2026.
Australia’s packaging industry is entering a year shaped by ongoing regulatory change, the re-emergence of soft plastics recycling, rising cost pressures and rapid product innovation.
In 2026, packaging providers continue to face impending deadlines for new national packaging regulations that will enforce mandatory packaging standards across Australia. These include removing harmful chemicals from packaging, mandatory recycling labelling to provide clear instructions that encourage increased recycling, and enforcing minimum thresholds for recycled content to drive demand for domestic end-markets.
Following the collapse of REDcycle three years ago, soft plastics recycling re-emerged in 2025, with the Australia’s first large-scale recycling facility in NSW receiving soft plastics collected from trials in Queensland, NSW, South Australia and Victoria, alongside some return-to-store programs.
Australian consumers also remain highly cost-conscious. Inflation is still sitting above the Reserve Bank of Australia’s (RBA) 2–3 per cent target range, contributing to weaker consumer confidence and ongoing concerns about potential future interest rate rises.
These market movements are shaping several key trends that will influence the packaging sector in the year ahead.
1. Innovation continues in recyclable materials
Global innovation in technically recyclable soft plastics continues to accelerate, with significant improvements in performance, shelf life and cost efficiency compared to early alternatives.
What we are seeing today is a very different generation of materials. In many cases, recyclable options now outperform earlier structures and are far more viable for commercial use.
Despite these advances, local momentum around technically recyclable soft plastics has slowed, even as global progress continues. Early adopters have already made the move, but most brands are waiting for legal obligations to arrive, which likely won’t be until FY27. Even where recyclable structures offer comparable performance and cost, many clients remain hesitant to act without regulatory pressure.
2. Compliance pressures and operational barriers persist
Despite growing opportunity, packaging organisations continue to face rising compliance costs and administrative demands, particularly around recyclability claims in areas where recycling infrastructure remains limited.
In many cases, brands are unable to transition to recyclable materials without upgrading existing machinery, creating a gap between sustainability ambition and operational reality.
Supporting clients through these challenges will be a defining role for packaging companies in 2026. Preparation for upcoming regulatory requirements is becoming a core part of customer relationships.
3. Value and function drive packaging decisions
Brands are also under pressure to demonstrate value as consumers tighten discretionary spending. Rather than increasing prices, many are adjusting pack formats to stay within household budgets for example, downsizing coffee packs from 1kg to 700g to keep unit pricing accessible. Others are passing on price increases while offering 10–15 per cent extra volume to reinforce value.
Functionality is also reshaping packaging strategies across food and beverage. High-protein, wellness and performance claims are driving a constant flow of new product variations, often resulting in short-run SKUs that may only remain on shelf for a matter of months.
This pace of change creates real complexity for brands and converters. Packaging must support frequent artwork updates, smaller batch sizes and faster turnaround times without the cost burden of traditional print methods.
4. Digital print and interactivity gain momentum
These pressures are accelerating demand for digital print technologies, allowing brands to scale production up or down, customise packaging and introduce embellishments without committing to long production runs.
Digital interactivity is also emerging as a key growth area, with QR codes and connected packaging enabling brands to engage consumers beyond the shelf.
Interactive packaging is becoming a practical tool rather than a novelty. It allows brands to share recipes, product information or sustainability details, while also creating opportunities to better understand their customer base.
5. Changing consumer behaviour reshapes demand
Shifting consumer behaviour is also influencing packaging demand. While sustainability remains important, affordability is increasingly the primary purchasing driver, with more families eating at home and grocery volumes continuing to grow.
Looking toward 2026 and beyond, packaging organisations that invest in digital capability, align production with client needs and actively guide brands through regulatory change will be best positioned for growth.
