The Advertising Specialty Institute (ASI) has published its 48th annual Counselor State of the Industry report, offering a comprehensive analysis of the promotional products sector. The 2025 edition highlights the industry’s response to various challenges, including ongoing supply chain issues, tariff-induced price increases, and growing cybersecurity threats. Despite experiencing average sales declines of 3.6% in the first quarter and 3.2% in the second, many companies are adopting proactive strategies to navigate this complex environment.
Key Findings from the Report
One of the most significant insights from the report is the impact of tariffs on pricing. Approximately 70% of suppliers increased their prices in the second quarter to mitigate the effects of import taxes. This adjustment reflects a broader trend in the industry, where companies are forced to reassess their pricing structures to maintain profitability.
Additionally, the report reveals a noteworthy shift toward company store offerings. Nearly 46% of distributors now provide company stores, a substantial increase from the previous year. This trend signifies a growing recognition of the value that customized promotional products can add to corporate branding efforts.
Another critical finding is the rising demand for American-made promotional items. As companies look to lessen their reliance on Chinese imports, sourcing from local manufacturers is becoming increasingly popular. This shift not only supports domestic businesses but also addresses several supply chain concerns that have emerged in recent years.
Cybersecurity is also a pressing issue in the industry. The report indicates that 40% of leading promotional firms reported experiencing cyberattacks, with ransomware being identified as a significant threat for the upcoming year. This highlights the urgent need for enhanced security measures within the promotional products sector.
Technological Integration and Market Dynamics
The integration of technology, particularly artificial intelligence, is another focal point of the report. Distributors are beginning to experiment with AI to optimize their operations, although they face challenges in fully implementing these advancements.
Market consolidation continues to reshape the landscape, exemplified by the recent acquisition of alphabroder by S&S Activewear, which underscores the increasing involvement of private equity in the sector.
“This year’s data shows an industry moving forward through innovation, resilience, and smart strategy,” stated Timothy M. Andrews, ASI president and CEO. “Our report delivers the tools and insights that help promo businesses grow stronger, even in uncertain times.”
For the first time, the report also compares the revenue and stock performance of the Counselor Top 40 companies based on ownership structure—public, private equity-backed, and privately held. This comparative analysis provides valuable insights into how leadership and company structure can influence financial outcomes.
“The 2025 State of the Industry provides the benchmarking data every promo business needs to make smarter decisions in a rapidly evolving market,” emphasized Nate Kucsma, ASI’s senior executive director of research.
As the promotional products industry adapts to these changes, the insights from the ASI report will be crucial for businesses aiming to thrive in an increasingly competitive landscape.
