Global fuel shortages and economic uncertainty can lead to rising costs for the Australian café industry. But could making the switch from oil-based packaging help ease the burden on business owners?
Australia’s hospitality sector is navigating global fuel instability and local cost-of-living pressures. For café owners, this can translate into a squeeze on margins, as freight, utilities, and supplier rates continue to climb, and consumers become more intentional with their discretionary spend.
In this climate, a strategic shift to compostable packaging can offer a way for venue operators to reduce their environmental impact while potentially lowering costs over time.
Guy Brent, CEO of BioPak – one of Australia’s compostable packaging leaders – says packaging choices now matter more than ever.
“Oil-based, conventional plastics are directly tied to fossil fuel markets, meaning when fuel and energy prices rise, the cost of producing and transporting conventional plastic packaging often rises with them,” he says, noting this “knock-on effect” creates greater price volatility and less certainty for café owners.
While some logistical and transport costs may still be affected by rising fuel prices, Guy says plant-based packaging offers a different, more resilient model than conventional plastics.
“By using rapidly renewable materials like plant fibre, cafés can reduce their exposure to oil-linked price volatility that drives traditional plastics,” he says. “It’s a more resilient long-term investment – one that prioritises stability, reduced switching risk, and alignment with future regulation and waste systems.”
Compostable alternatives – like BioPak’s Single Wall Hot Cups, BioCup Cold Cups, and BioCane containers – can help future-proof operations as single-use plastic bans continue to rollout across Australian states, and customer expectations shift toward more sustainable choices, says Guy.
“From BioPak’s perspective, the conversation is no longer just about unit price. It is about long-term value, supply resilience, and choosing packaging that is better aligned to where the market is heading,” he says.
In turn, plant-based packaging could lead to a smarter strategic investment for owners over staying dependent on traditional plastics, viewing compostable materials as a ‘green premium’ cost.
While this might be a perceived challenge for cafés navigating rising operational costs, Guy says continuing to rely on conventional plastics can create greater long-term risk through ongoing price volatility, future compliance costs, and supply disruption.
“The plastics industry is grappling with a convergence of challenges in 2026, including rising oil prices, labour shortages, and tariff uncertainty, with fuel prices increasing in ways that will continue to impact resin prices and shipping costs,” he says.
“Industry reporting suggests this is already changing how packaging markets behave, pointing to a broader packaging sector cost reset, rather than a passing spike – with the strongest pressure in plastics, where higher crude, naphtha, and energy costs move quickly into resin prices.”
Evolving legislation
International supply chain pressure on conventional packing is also being met with legislative change in Australia. Rapidly changing single-use plastics bans are sweeping the nation, with cafés having to act quickly to ensure compliance.
Almost all Australian states and territories now have some form of ban on single-use plastics, and the Australian Packaging Covenant Organisation (APCO) is rolling out new framework for businesses with an annual turnover above AU$5 million to meet packaging reporting requirements.
BioPak’s Head of Sustainability Lea Maguero says the company closely tracks regulatory trends across Australia, preparing before new requirements come into force, where it can.
Where rules differ between states, BioPak designs its products “to meet the strictest regulations and apply that standard across [its] entire range”.
“By doing this early and consistently, cafés don’t have to keep updating their packaging or operations every time a new ban is introduced. Instead, compliance is effectively built in. And, as regulations tighten, our customers are already aligned,” says Lea.
“This approach turns what could be a series of costly, reactive changes into a single, futureproof shift that gives cafés confidence they’ll remain compliant as laws continue to evolve.”
Intentional investment
The current cost-of-living crisis could also lead to more ‘intentional dining’ across Australian cafés – a consumer trend focused on selective, mindful hospitality purchases – for a more budget-conscious experience.
Lea says this shift means customers are expecting each touchpoint to have increased value.
“As a result, packaging becomes part of the overall brand and product experience, not simply a line-item cost,” she says.
“When a customer is paying a premium for a coffee, any misalignment in quality, including packaging, can undermine that perception of value. So, a well-designed compostable cup helps create a coherent, high-quality experience that justifies the price point.”
Guy concurs, stating that as customers become more selective about where they spend, packaging that is outdated and inconsistent with sustainability expectations can decrease its perceived value.
“The real hidden cost is not just the cents per item; it’s the long-term risk exposure and missed brand value that comes with staying dependent on conventional based packaging,” he says.
“Operators who stick with traditional plastics aren’t just managing a unit cost; they’re taking on ongoing volatility, regulatory risk, and repeated switching costs as bans expand – along with rising environmental costs and impacts on community wellbeing that shape customer choice and brand trust.”
Lea says it is less about sustainability as a standalone selling point, and more about using it to strengthen credibility and brand integrity at a time when customers are increasingly selective about where they spend.
Counting on community
To help promote a circular economy amidst rising costs, Lea says cafés can turn their waste stream into a community asset by closing the loop locally.
These actions include composting organic waste and working with initiatives like Compost Connect, BioPak’s composting platform that matches foodservice businesses to commercial organic waste pick-up services. So, cafés can divert organic waste from landfill and transform it into a valuable resource.
“If composting partners are not available, cafés could go a step further by partnering with neighbours, community gardens, or local councils to help create shared composting hubs that benefit the wider community,” says Lea.
Choosing home-compostable packaging makes this process even more accessible, she adds, enabling food scraps and packaging to be composted together in a simple composting bin and returned safely to soil.
The resulting compost can nourish local gardens and green spaces, turning everyday waste into “something that supports community growing, soil health and local food systems”.
“This way, cafés become active contributors to a circular economy,” Lea says.
As cafés consider the opportunities and challenges of more sustainable packaging products, Guy is keen to remind venue operators of the hidden costs of staying with traditional plastic products.
“As the sector reassesses packaging choices, the issue is increasingly a system one rather than just about the product. Foodservice packaging is often contaminated and hard to recover, limiting recycling outcomes. The value of compostables is really about alignment with real-world outcomes, not just material inputs,” he says.
“Overall, what looks cheaper or most cost effective today can become more expensive over time through repeated price rises, supply disruption, and the need to switch products as single-use plastic bans expand.”
For more information, visit biopak.com
This article appears in the June 2026 edition of BeanScene. Subscribe HERE.
