Sustainable and affordable food packaging is a prerequisite for world food markets. Several plastic-based packaging approaches are functional during the transport and storing of food products as an orthodox packaging approach. Owing to food safety and quality, consumers’ preference, and shelf-life issues, conventional plastic-based packaging are highly discouraged. Thus, polymer-based nanocomposites are considered as potential alternatives to conventional food packaging toward innovative packaging of food materials. Several nanocomposites such as nanoparticles, nanotubes, nanoclays, nanoproteins, nanosheets, nanopolymers, and nanocarbohydrates are used in the food packaging market to replace petroleum-based plastic packaging throughout the world. However, the assessment of various nanocomposites in terms of food contact, microbial, and hygiene safety is still under investigation. Although biodegradable nanocomposites have multifunctional benefits to enhance the packaging of foods over the traditional packaging, food safety and compatibility of these nanocomposites are not explored vastly. Additionally, the merger of various polymers and their nanocomposites is in the initial research phase due to the incompatibility of heterogeneous chemical properties. Therefore, a customized and technological advancement is necessary to sustain the application of polymer nanocomposites as a sustainable packaging alternative for food products. This study emphasizes the contemporary trends and prospects of polymer nanocomposites for safe and affordable food packaging along with challenges toward innovative and state-of-the-art packaging developments.