After a tumultuous 2024, the largest firms in the branded merchandise industry are expecting a banner year in 2025, according to the latest data from PPAI Research.
Almost 45% of PPAI 100 distributors are eyeing significant growth between 6%-15% in 2025, while 34% are expecting a steady 1%-5% increase and 2% prepare for minimal growth.
PPAI 100 suppliers have similar statistics: 45% are setting their sights on significant growth between 6%-15%, 38% are targeting a steady 1%-5% and nearly 5% are preparing for minimal growth.
- Over 82% of PPAI 100 suppliers identified the expansion of product lines as their key growth strategy for 2025, followed by increased customization capabilities (46%) and entry into new markets (41%).
- Almost 53% of PPAI 100 distributors said entry into new markets was their cornerstone for growth in 2025, followed by other strategies — like adding sales personnel (33%) and rising client budgets (28%).
- Some 65.8% of suppliers and almost 77% of distributors view expanding into new customer segments as the biggest opportunity for growth in 2025.
“As we approach 2025, the promotional products industry stands on the brink of transformative growth,” says Alok Bhat, PPAI’s market economist and research lead. “The question isn’t just how much we will grow, but how we will strategically achieve and leverage this growth.”
Alok Bhat
Market Economist, Research & Public Affairs Lead, PPAI
Impact Of Industry Consolidation
The promo industry saw significant M&A activity in 2024, including S&S Activewear acquiring alphabroder and iPROMOTEu acquiring the AIA Corporation.
PPAI 100 firms expect industry consolidation to continue in 2025, with 35% of suppliers anticipating increased competition from larger firms, highlighting concerns over market dominance and the competitive challenges it brings. Meanwhile, only 12% of distributors anticipate increased competition due to consolidation.
Despite these concerns, more than half (51%) of PPAI 100 distributors and 46% of PPAI 100 suppliers believe that industry consolidation will have limited or no impact on their business.
- More than one-third (37%) of PPAI 100 distributors and 16% of PPAI 100 suppliers view industry consolidation as an opportunity to grow through acquisitions.
Diversifying Sourcing Strategies
In terms of their primary advocacy concern for 2025, 80% of PPAI 100 suppliers and 74% of PPAI 100 distributors cited trade policies impacting imports.
That’s no surprise considering that President-elect Donald Trump has vowed to implement tariffs on imports from various countries, including Canada, Mexico and China.
As a result, many promo firms are re-evaluating where they source their products and materials from. Nearly half (49%) of PPAI 100 suppliers identify Southeast Asia (excluding China) as a key region for sourcing in 2025.
- India and Mexico, each selected by 27% of suppliers, are positioned to become more significant in sourcing strategies, reflecting their growing capabilities in manufacturing and proximity to major consumer markets.
- Additionally, 16% cite other areas like Canada and Central America, pointing to a broadening geographic focus.
Meanwhile, 46% plan to focus on domestic sourcing, driven by the benefits of reduced shipping times and supply chain resilience.
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Nearly half (49%) of PPAI 100 distributors are planning to increase sourcing from Mexico and 43% from Southeast Asia (excluding China).
- South America and India, each selected by 23% of distributors, are positioned to become more significant in sourcing strategies, reflecting their growing capabilities in manufacturing and proximity to major consumer markets.
- Additionally, 11% cite other areas like Canada and Central America, pointing to a broadening geographic focus.
The “Made in USA” push is expected to rise in 2025, as well, with 46% of distributors looking to source domestically.
Advocacy Priorities For 2025
While 42% of PPAI 100 distributors are focused on addressing labor and workforce challenges, nearly a quarter (24%) are prioritizing sustainability compliance mandates.
- Nearly 16% are concerned about industry consolidation affecting fair competition, advocating for regulations that protect market diversity, and 11% identify other areas requiring support, such as intellectual property and specific regional regulations.
Conversely, 41% of PPAI 100 suppliers are focused on sustainability compliance mandates, indicating a pressing need to adapt to environmental regulations.
- One-third (33%) are concerned with labor and workforce challenges, and 18% are worried about industry consolidation and fair competition.
“PPAI is pushing for more flexible regulatory frameworks that accommodate the unique needs of smaller businesses and enhance overall industry resilience,” Bhat says.
For questions or suggestions on regulatory or government affairs issues, please contact Rachel Zoch at RachelZ@ppai.org.
