The Advertising Specialty Institute (ASI) has published its 48th annual Counselor State of the Industry report, detailing the evolving strategies of promotional products companies facing numerous challenges. The 2025 report highlights the industry’s adaptability amidst ongoing supply chain disruptions, increased tariffs, and rising cybersecurity threats.
The report reveals that promotional product sales declined by an average of 3.6% in the first quarter and 3.2% in the second quarter of 2025. In response, many suppliers and distributors are implementing strategic pricing adjustments, diversifying their sourcing methods, and investing in technology to navigate the complexities of the current market.
Key Findings of the Industry Report
A significant aspect of the report is the impact of tariffs, with approximately 70% of suppliers raising prices in the second quarter to mitigate the effects of import taxes. This trend reflects the ongoing economic pressures companies face as they seek to maintain profit margins.
Additionally, the report notes a rise in company store offerings, with 46% of distributors now providing these services, marking a notable increase from the previous year. This shift indicates a strategic pivot toward creating more direct channels for consumer engagement.
Another noteworthy trend is the growing demand for American-made promotional products. As companies aim to lessen their reliance on Chinese imports, sourcing from within the United States is becoming increasingly popular, reflecting changing consumer preferences and geopolitical considerations.
Cybersecurity remains a critical concern, as 40% of leading promotional firms reported experiencing cyberattacks, with ransomware being identified as a significant risk for 2026. This highlights the urgent need for businesses to bolster their cybersecurity measures in an increasingly digital landscape.
Furthermore, the integration of artificial intelligence is gaining traction among distributors, who are exploring AI technologies to streamline operations. However, challenges in effectively incorporating these tools into existing workflows persist.
The report also points to ongoing industry consolidation, particularly with private equity involvement. The acquisition of alphabroder by S&S Activewear exemplifies this trend, as larger entities continue to reshape the competitive landscape.
Insights and Future Directions
Timothy M. Andrews, ASI president and CEO, remarked, “This year’s data shows an industry moving forward through innovation, resilience, and smart strategy.” He emphasized that the report provides valuable tools and insights that can assist promotional businesses in strengthening their operations during uncertain times.
Additionally, for the first time, the report compares the revenue and stock performance of the Counselor Top 40 companies based on their ownership type, including public, private equity-backed, and privately held firms. This analysis offers fresh perspectives on how leadership structures impact company outcomes.
Nate Kucsma, ASI’s senior executive director of research, stated, “The 2025 State of the Industry provides the benchmarking data every promo business needs to make smarter decisions in a rapidly evolving market.”
Businesses within the promotional products sector will benefit from these insights as they seek to adapt to ongoing challenges and capitalize on emerging opportunities. The comprehensive findings of the ASI report underscore the importance of strategic innovation and resilience in navigating the current market landscape.