Australia’s packaging industry is entering a year shaped by ongoing regulatory change, re-emerging soft plastics recycling, rising cost pressures and rapid product innovation, according to new insights from Jet Technologies.
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 encouraging increased recycling and enforcing minimum thresholds for recycled content in packaging to drive demand for domestic end-markets.
Following the collapse of REDcycle three years ago, soft plastics recycling re-emerged in 2025, with the opening of Australia’s first large-scale recycling facility in NSW receiving soft plastics from trials in Queensland, NSW, South Australia and Victoria and some return-to-store programs.
Australian consumers also remain highly cost-conscious, as the latest data shows inflation is still above the Reserve Bank of Australia's (RBA) 2-3% target range. This persistent pressure has led to a slump in consumer confidence and concerns about potential future interest rate rises.
These market movements are influencing the following trends, which we are going to see in the packaging sector throughout 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’re seeing today is a very different generation of materials,” said Daniel Malki, General Manager at Jet Technologies. “In many cases, recyclable options now outperform earlier structures and are far more viable for commercial use.”
Despite these advances, Malki said local momentum around technically recyclable soft plastics has slowed, even as global progress continues. “Early adopters have already made the move, but most brands waiting for legal obligations to arrive, which won’t likely be until FY27[1],” he explained. “Even where recyclable structures offer comparable performance and cost, on the whole, we find that clients are 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,” Malki said. “Preparation for upcoming regulatory requirements will become a core part of customer relationships.”
3. Value and function drive packaging decisions
At the same time, brands are under pressure to demonstrate value as consumers tighten discretionary spending. Rather than increasing prices, many are adjusting pack formats to stay within household budgets, downsizing products like coffee from 1kg to 700g to keep unit pricing accessible. Others are passing on price increases while offering 10–15% extra volume as a way of reinforcing 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,” explained Malki. “Packaging needs to support frequent artwork updates, smaller batch sizes and faster turnaround 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,” Malki said. “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
Jet Technologies also points to shifting consumer behaviour as a key influence on 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.
As the industry looks toward 2026 and beyond, Jet Technologies says 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.
For more information, visit http://www.jet-ap.com/.
[1] APCO CEO Chris Foley on national packaging reform (including Extended Producer Responsibility and broader regulatory change) — National Packaging Reform: Turning brand leadership into consistent outcomes (13 Jan 2026): https://apco.org.au/news/20YOl00000Y6u4FMAR?