In case you weren’t aware, there are a lot of statistics in our State of the Industry report. OK, maybe that’s not a shock. But you may be surprised to know that what actually makes it in our SOI issue is only part of the vast well of findings that emerge from our annual survey. And just as journalists will “empty their notebooks” of the tidbits and quotes that didn’t make their published article, we’ll do the same here with a few additional charts and findings that – while we just couldn’t squeeze them into the other articles – still point to some significant trends in promo.

Hover over the bar charts to see more detailed State of the Industry statistics.

1 Sustainability: Here to Stay
There are two ways to look at these numbers. The optimistic view shows that more than half of distributors are seeking out sustainable products for their clients. Great, right? Now for the pessimistic view: both of those figures actually decreased from last year, with 62% preferring environmentally friendly products and 60% preferring socially responsible products in 2022. For what seems like a major growing trend, the fact that those totals dropped feels surprising.

The industry’s sustainability proponents shouldn’t be overly concerned. The State of the Industry survey was fielded in early 2023, and the state of the U.S. economy and slowing promo sales growth had a noticeable effect on the findings. Industry pros have a long-standing pattern of pulling back on categories and services that cost more when they start feeling the pinch of price pressures.

Still, sustainability has been one of, if perhaps the defining trend in promo for the past decade. Buyers of all ages are demanding it and more distributors are committing to it, because it’s what clients want and because it’s the right thing to do. (We’re obligated to mention that ASI is educating and informing our readers on all things sustainable with our Promo for the Planet page.)

So it would be surprising if these declines continue over multiple years. Take the glass-half-full approach: sustainability isn’t going anywhere.

2 Rush Orders: Slowing Down & Speeding Up
For an industry in a never-ending push to get faster and more efficient, there’s been one very interesting trend the past few years: the decline of rush orders. For the third consecutive year, suppliers reported a drop in the percentage of orders requiring five-day or less turnaround. In fact, only a quarter of orders filled by suppliers meet that criterion.

What gives? Well, the pandemic and the cascading fallout of supply chain delays made it tremendously difficult to fulfill last-minute orders – and distributors did their part by urging clients to get ahead and build in more lead time.

Dig a little deeper though, and you’ll notice something interesting. Five-day or less turnaround decreased for small and medium suppliers in 2022 – but went up for large suppliers. It makes sense. As supply chain pressures ease, distributors and their clients will start gravitating back to rush orders. And large suppliers – thanks to their infrastructures and often well-stocked inventories – are in position to openly court that business. It’ll be interesting to see if smaller and medium-sized suppliers will forsake that business to make it easier on their operations and labor force, or if they’ll be forced to speed back up again.

3 Stress Levels: No More Crises?
This was a new question for this year’s iteration of SOI, and the results were interesting. About 20% of distributors “Strongly Agree” with the statement that their work stress increased, compared to 34% of who said they “Somewhat Agree.” Moreover, the results were mostly consistent across all revenue classes. In fact, the smallest distributors ($100k and less in revenue) and the largest (over $5M) responded most often that work stress increased last year.

It’s never a positive trend when more than half of a group of people says their stress level is rising. Since this is a new question, we don’t have historical SOI data to compare it to previous years’ responses. Overall, stress levels in the U.S. are exceptionally high, the American Psychological Association found last fall in its annual Stress in America survey. Promo professionals spent much of 2021 and 2022 dealing with supply chain issues, lack of labor and additional headaches that made even the simplest orders especially trying. Anecdotally and empirically from our SOI data, those pressures have eased, but slowing sales growth in early 2023 and concerns over the state of the economy may counterbalance those trends. In other words, stay tuned for next year.

4 M&A: Who’s Ready to Buy & Sell?
M&A hit big in 2021 and 2022 thanks to the combination of distributors eager to sell (partly due to the headache of running a business during a pandemic) and buyers (often private equity backed) flush with cash and eager to strike. While global M&A for all industries has been on the decline since the end of 2021, the M&A push in promo continued in the first half of 2023 with a series of deals that have reverberated across the industry – most notably the acquisition of former Top 40 supplier Evans Manufacturing (asi/52840) by Top 40 supplier HPG (asi/61966).

So Counselor asked both distributors and suppliers: How likely are you to acquire a company or sell your company? The percentages were small (all under 20%) and relatively even between the two sides. And generally speaking, small companies were more likely to sell, and larger companies were more likely to buy. This was especially pronounced on the supplier side – 16% of small suppliers said they were likely to sell their company in the next year, compared to 2% of large companies. Meanwhile, over a quarter of large suppliers (26%) said they were likely to acquire a company in the next year, compared to 10% of small suppliers.

Bottom line: M&A has been going strong. Expect it to continue.

5 Added Services: Distributors Ready to Expand
In the last decade, distributors have broadened their array of offerings to become one-stop shops for clients. Services such as fulfillment, company stores and even digital services such as SEO and email marketing have been major trends. And yet, fewer and fewer distributors were providing these services until 2022, when there was a bit of a rebound. What gives?

The explanation is simple: hard times force companies to refocus on their core services and make them cautious about being stretched too thin. Even though a service such as company stores is growing wildly popular, distributors didn’t want to take on something new when there were fires to be put out. In addition, distributors were happy to lean on suppliers for services like drop-shipping and fulfillment to keep customers happy without taking on those processes themselves.

With distributors increasing these added services in 2022, it’s a positive sign that they feel comfortable about the health of their businesses and the industry, and are willing to incur the risk of branching into a new area for a potentially lucrative gain.