A novel indicator film was produced with N‐glutaryl chitosan (ChGA) as a matrix and butterfly pea flower anthocyanin (BPA) as a dye. The synthesis of ChGA was achieved by the reaction of chitosan (Ch) and glutaric anhydride (GA), which resulted in the structural alteration of Ch, with carboxylic groups being present in ChGA. The ChGA–BPA film demonstrated higher sensitivity to changes in pH, a more compact structure, and more hydrophilic properties compared with Ch‐BPA film. The ChGA–BPA film demonstrated antioxidant and antimicrobial activity, as well as an enhanced biodegradable property. Further characterisation showed ChGA–BPA film possessed ultraviolet visible (UV–Vis) light barrier properties and was non‐toxic to cells. Lastly, when tested as packaging, the films underwent a visible colour changes from blue to yellowish‐green as chicken breast was stored at various temperatures, which correlated with an increase in nitrogen compounds, indicating the potential of this film as a smart packaging solution to monitor the freshness of chicken breast.