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Fisher Space Pen on First Manned SpaceX Flight

Astronauts are writing at zero gravity with the promotional products supplier’s iconic product.

A promotional product supplier’s iconic product is an essential part of a new chapter of American space exploration, just as it has been an essential part of its past.

Fisher Space Pen Co.’s (asi/54423) AG7 Original Astronaut Space Pen is the writing instrument NASA astronauts Bob Behnken and Doug Hurley have used aboard their history-making SpaceX flight.

SpaceX, billionaire Elon Musk’s private space company, launched Behnken and Hurley to the stars on May 30, marking the enterprise’s first-ever crewed mission.

The Falcon 9 rocket and Crew Dragon spacecraft are the first private sector-designed and built craft to carry astronauts into space. The mission is also a return to space for NASA astronauts; the agency hasn’t launched its own astronauts into orbit since the end of the space shuttle program nearly a decade ago.

On their flight to the International Space Station, Behnken and Hurley used the AG7 Original Astronaut Space Pen to do their writing. They’ll continue to use the pens at the space station, where about 50 Fisher Space Pens are in use.

The Fisher AG7 Original Astronaut Space Pen has been flying aboard every crewed space mission since Apollo 7 in 1968.

“We are delighted that Fisher Space Pens are once again flying aboard American rockets from American soil,” says Matt Fisher, vice president of Fisher Space Pen Co. “Fisher Space Pen was created especially for use in zero-gravity, and our company continues to innovate new functionalities for future releases. Congratulations to NASA, SpaceX, astronauts Behnken and Hurley and everyone involved in this historic mission.”

Paul C. Fisher, an inventor and entrepreneur, created the Fisher Space Pen. He spent more than $1 million of his own money to develop an ink refill that uses pressurized gas to force ink to flow in zero gravity.

The Fisher Space Pen brand has become an iconic symbol of American technology and design, as Counselor documented in an in-depth piece about the pen and the company. It has also become part of American pop culture. Fisher Space Pens are enjoyed and used by millions worldwide, and the pen has become the subject of hundreds of fan videos. It has been featured on several TV programs, including an episode of the hit series Seinfeld titled “The Pen.”

All Fisher Space Pen products, which are Made in America, contain the patented pressurized ink refill, which allows them to write upside down, under water, in extreme temperatures from -30 to +250 degrees F (-35 to +121 Celsius), over almost any surface and three times longer than the average pen.

While astronauts are among its end-clients, Fisher Space Pen Co. sells its pens through promo products distributors for everyday use in a functional and promotional way, as the pens can easily be imprinted through traditional decoration means.

Original Source: https://www.asicentral.com/news/newsletters/promogram/june-2020/fisher-space-pen-on-first-manned-spacex-flight/

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COVID-19 Crisis Disrupts Bag Market

Reusable bags are under fire due to concerns over spreading the coronavirus.

After years of increasing legislation banning single-use plastic bags, the “green wave” has crashed due to the COVID-19 crisis, creating a ripple effect throughout the promotional products industry.

States, cities and stores have changed their tune over the past few months, encouraging plastic bags rather than reusable bags because of fears over spreading the coronavirus. Even California, the pacesetter of the anti-plastic movement, has suspended its 4-year-old ban after certain studies have suggested that reusable bags, when not cleaned properly, can become veritable petri dishes for bacteria and the like. In order to better protect their workers and customers, retail, grocery and plastic industry advocates have rallied for plastics to be reinstated at least for the time being.

It’s been a reversal of fortune for promo firms who’ve benefitted from selling branded totes and other reusable bags in recent years. “Our sales have dropped since the pandemic due to the shutdown, and we’ve been hit extra hard because of stores removing reusable bags,” says Andy Keller, founder and CEO of California-based ChicoBag Company (asi/44811). “Raley’s Supermarkets, for example, will not sell new reusable bags as part of this, which has no basis in science or logic.”

Keller points to environmentalists and other ban advocates who’ve called studies linking reusable bags to increased disease spread dubious. They note that reusable bags are not necessarily any more or less contaminated than other surfaces at stores. Keller also argues that the Centers for Disease Control and Prevention (CDC), Occupational Safety and Health Administration (OSHA) and the World Health Organization (WHO) have all given guidance supporting the notion that reusable bags don’t pose a health threat. Although those organizations don’t specify whether the coronavirus is spread through reusable bags, the CDC does state “it may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes.”

Despite trepidation from some clients, Top 40 supplier Bag Makers (asi/37940) is still seeing a demand for reusable nonwoven polypropylene bag styles. “While bag sales have slowed in general due to the economic impact of coronavirus, our customers continue to show interest in reusable bags for promotions and program business,” says Jennifer McFadden, communications director at Bag Makers.

The most popular bags during the pandemic, according to suppliers, have been paper, plastic and insulated bags that support restaurant takeout and delivery orders, as well as home grocery delivery.

“The nonwoven cooler sales spiked exponentially,” says Gary Semrow, owner and vice president of marketing at Illinois-based American Ad Bag (asi/35290). “We also had a large spike in demand for the wider gusseted paper shopping bags for the restaurants to do take-out, causing a tight supply chain. Now that most of the country is opening up, the stress on the supply of wide gusset paper shoppers has lessened.”

Deliveries of all kinds have experienced a surge during the pandemic, as consumers have turned to e-commerce for their goods. “Our poly mailer business is very strong now, as well as any other kind of packaging sold to online marketers,” says Ken Trottere, vice president of New York-based Poly-Pak Industries, Inc. (asi/81350).

Although the pandemic has prevented revenue from reusable bags, ChicoBag has seen a rise in other product categories. “We’ve seen a spike in sales for our bottle sling and travel pack because people are spending a lot more time walking, hiking and getting outdoors,” Keller says.

Original Source: https://www.asicentral.com/news/newsletters/promogram/june-2020/covid-19-crisis-disrupts-bag-market/

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Companies Focus on Mask Innovation

Happening at retail and in promo, some manufacturers are aiming to produce masks with enhanced performance features, breathability and comfort, especially as summer takes hold. Still, innovation comes with risks.
Come July, Japanese sports equipment manufacturer Yonex plans to start selling face masks that contain xylitol.

Yonex typically uses the material, which absorbs heat and wicks sweat, in the apparel it produces for the Japanese national badminton team and professional tennis players.

Since Yonex pivoted to selling face masks during the coronavirus pandemic, the company with a 74-year history felt the material could be used to create quick-drying, antimicrobial masks that enable wearers to stay cooler and more comfortable on hot days.

“As people spend more time wearing masks against the coronavirus, we hope our technology will enable users to keep cool during hot weather, even if only a little bit,” a Yonex spokeswoman said, according to The Japan Times.

While the Yonex masks are particularly available in Japan, they highlight what some feel will be a growing trend at retail and in the promotional products marketplace as mask-wearing remains increasingly common amid the continuing COVID-19 threat – namely, that manufacturers are going to innovate, trying to build more performance-enhancing features into face coverings.

“We believe that more innovation is coming in face masks for people to wear while performing work, playing sports and engaging in other activities in warm environments,” said Jeremy Lott, president of Top 40 promotional products supplier SanMar (asi/84863).

Issaquah, WA-based SanMar is already making progress in that regard, Lott said. He noted that the company’s Port Authority Stretch Performance Gaiter (G100) comes in a performance fabric. Most of the masks SanMar makes are cotton, but they’re outfitted with Sciessent’s Agion, an antimicrobial treatment that only activates when it needs to defend against microbes, Lott said.

Meanwhile, Allmade (asi/34341) has already developed a mask innovation. The apparel supplier has created the Allmask Tri-Blend Face Mask. Lightweight and breathable for the summer months and beyond, the mask is a unique blend of 50% Repreve polyester made from recycled plastic; 25% organic cotton, which is U.S.-grown without chemicals; and 25% TENCEL Modal. Each mask consists of an average of one recycled water bottle.

“This tri-blend is a great performance fabric,” Moor said. “The differentiating ingredient we use – Modal – really helps with moisture-wicking and odor.”

In part to demonstrate the mask’s comfort and performance capabilities, Moor recently wore one as part of a Memorial Day-related fitness challenge, which he documented on Instagram.

When it comes to mask innovation, manufacturers need to proceed smartly and ensure they’re complying with standards established by the Food and Drug Administration (FDA), some promo suppliers say. “It’s a risky area,” Chris Blakeslee, president of California-based Bella+Canvas (asi/39590), said of experimenting with fabrics and treatments on masks.

Bella+Canvas is producing about 100 million masks per week now. Most are a cotton/polyester blend that Blakeslee says naturally keeps them cooler and more breathable. The company doesn’t plan to expand beyond that to different treatments and the like, Blakeslee said.

“Many of these treatments, like moisture-wicking chemicals, agents, water repellants and various bio antimicrobials have never been tested for inhalation safety,” said Blakeslee, adding that brands are doing a poor job of adhering to FDA standards regarding masks, such as that all body-contacting materials must be disclosed on the label. “Eventually,” said Blakeslee, “one of them is going to get nailed.”

Back at retail, some companies are definitely pressing forward with mask material and treatment innovations. Mizuno Corp., for instance, is making masks that feature a soft-stretch tricot material that normally would be used in the sportswear/athletic equipment maker’s swimsuits and track and field apparel. Another Japanese firm, knitwear maker Knit Waizu, is producing masks with icepacks, The Japan Times reported.

Such examples indicate that more new developments on mask fabrics and performance could be in the cards. Companies in promo, sporting goods, fashion and other industries have turned to selling personal protective equipment amid the coronavirus pandemic in order to meet rampant demand and help fulfill a public safety need.

 

Original Source: https://www.asicentral.com/news/newsletters/promogram/june-2020/companies-focus-on-mask-innovation/

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What’s the Deal With Tariffs and Promo?

After months of threats, tweets and negotiations, the United States and China signed a trade deal that marks the first official steps to a resolution in their ongoing trade war. And while the “Phase One” deal (which was signed on Jan. 15) is viewed by promotional products executives as a positive development for the industry, there remain some fundamental challenges that are likely to linger throughout 2020. Here’s a breakdown of where things stand – and where they may be headed.

What are the biggest provisions of the Phase One deal?

— A reduction in tariffs from 15% to 7.5% on $120 billion worth of Chinese imports. “The fact is that tariffs are bad for our industry and a reduction in them is good for us,” said Craig Nadel, president of Top 40 distributor Jack Nadel International (asi/279600).

— Commitments from China to purchase $200 billion in U.S. imports over the next two years.

— Measures to prevent Chinese companies and the nation’s government from coercing American firms into divulging technology and trade secrets as a condition of doing business in China.

What tariffs are in effect?

— Besides the 7.5% on $120 billion worth of Chinese imports, 25% tariffs remain on more than $250 billion of Chinese imports. The 7.5% tariff applies to categories such as apparel (including T-shirts and jackets) as well as pens, while the 25% tariff hits bags, drinkware, chargers and more.

Will more tariffs be scaled down or removed?

— That’s the million-dollar question, and there isn’t a clear answer at this point. President Donald Trump’s administration has said there are no plans to remove or reduce more tariffs before a “Phase Two” deal is reached. Even if a comprehensive new trade agreement is eventually agreed to with China, it’s possible not all tariffs will be lifted, U.S. Treasury Secretary Steven Mnuchin has said.

When will a Phase Two deal be signed?

— According to analysts and experts, most likely not until after this year’s presidential election. Phase Two talks are likely to center on difficult, controversial issues that include Beijing’s government-backed subsidies to Chinese companies. Trump administration officials have indicated that there’s no timeline for the Phase Two deal to wrap up. “It’s unlikely there will be substantial progress or any type of rollback in tariffs before the elections,” said David Nicholson, president of Top 40 supplier Polyconcept North America (PCNA, asi/78897). “President Trump is balancing two competing interests – maintaining a tough stance with China and ensuring the economy keeps growing. I suspect he views the current position as a reasonable compromise of the two.”

Will prices on China-made promo products be reduced because of the tariff rate decrease?

— It’s possible that prices could eventually be scaled back on a limited number of product categories that saw a reduction in the levy rate from 15% to 7.5%. Still, it’s unclear if that will materialize. What’s more, tariffs remain on a broad swath of imported promo products, and suppliers are continuing to grapple with increased costs. As such, in the short term at least, distributors can probably expect some product price increases. Here’s what leading industry executives had to say on the issue:

— “I believe we’ll see price reductions likely some time in the second quarter, after suppliers have worked down their inventory and after Chinese New Year,” said Eddie Blau, CEO of Top 40 supplier Innovation Line (asi/62660).

— Terry McGuire, senior vice president of vendor relations at Top 40 distributor HALO Branded Solutions (asi/356000), said: “The impact of reduced tariffs … should be positive in the lowering of costs for several products. We have tracked pre- and post-tariff costing on most products from our key suppliers. We will be working with them on a timeline to return to pre-tariff costs.”

— “It’s important to remember that the tariffs on a huge range of categories and products are still in place at the original levels,” said Jonathan Isaacson, CEO of Top 40 supplier Gemline (asi/56070). “This will continue to impact a very large number of industries, including promotional products. Given this, there will likely be very few, if any, price rollbacks for our industry.”

— “The Phase One deal does very little to mitigate current tariffs,” said Nicholson. “I suspect there will be little impact as a result. The price increases imposed by suppliers will have to remain in place to cover the continuing tariffs. This will continue to impact budgets and the perceived value of our products, neither of which is positive for industry growth.”

— “We evaluate pricing annually and determine if we will make an increase on Jan. 1,” said Melissa Ralston, chief marketing officer at Top 40 supplier BIC Graphic North America (asi/40480). “This year, we postponed to Feb. 1 to increase prices reflective of the 7.5% tariff rate.”

— The tariff-driven pricing pressures have accelerated a push by both suppliers and even distributors that source directly abroad to move more production out of China. Expect supply chain diversification to continue regardless of what trade arrangements Beijing and Washington D.C. make. “Other promo companies will slowly continue to do what we’ve been doing,” said Joshua White, general counsel and senior vice president of strategic partnerships at Top 40 distributor BAMKO (asi/131431). “They’ll diversify their supply chains and expand their product sourcing footprint out of China to places like Vietnam, India and Bangladesh.”

Beyond a tariff rate reduction, what other positives emerged for promo from the Phase One Deal?

— The deal meant that additional 15% tariffs on approximately $160 billion of Chinese imports (that were supposed to be instituted on Dec. 15) were never actuated. There’s currently no plan to institute those levies. Had those duties gone into effect, the promo industry would likely be looking at even more price hikes.

— The deal signaled that tensions between the U.S. and China appear to be decreasing. That could create more market certainty. End-buyers could feel less impact from (and less worry over) the trade war, thereby making them more willing and able to invest in ad specialties. “Any injection of optimism into the marketplace has a positive economic impact, and that positivity should be quickly reflected in industry sales,” McGuire said. Nicholson added: “If the economy can stay on track, business investment, which suffered last year, is likely to pick up. That should indirectly benefit our industry.”

— Normalizing relations between the U.S. and China could ultimately help settle the pricing instability that has affected promo as a result of the trade war. “We have communicated that our expectation is for greater price stability this year given the recent progress in trade talks,” Nicholson said.

— There could be increased opportunities to sell promo to U.S.-based exporters that are benefitting from China’s commitment to purchase $200 billion in U.S. products and services.

Original article published in www.asiacentral.com by Chrisopher Ruvo

sixtwentysixWhat’s the Deal With Tariffs and Promo?
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Impact of Coronavirus on Promotional Products

Fears that the 2019 Novel Coronavirus would prevent factories in China from quickly resuming operations following the extended Chinese New Year are becoming an unfortunate reality, promotional products executives say.

Last week, Counselor reported that increased product prices, rising shipping costs, inventory shortages, prolonged supply chain disruption, health concerns and business travel/trade show upheaval are some of the issues the North American promotional products industry is facing or could soon face as a result of the viral outbreak.

A week later, the picture on what the supply chain disruption will look like has become clearer. The image that’s emerging is troubling: Industry executives say that many factories in China remain shuttered. The majority of promo products sold in North America are made in China. “Some factories have opened, but with few workers at this point,” Jeff Lederer, president of Prime Line (asi/79530), Top 40 supplier alphabroder’s (asi/34063) hard goods division, told Counselor.

Reasons for the slow re-opening are manifold. For starters, nearly half of China’s population – some 780 million people – are living under some form of travel restrictions, which the government has enacted to control the spread of Novel Coronavirus (also referred to as Wuhan Coronavirus and COVID-19). The clampdown on traveling is making it difficult for workers to return to factory floors following the Chinese New Year, which authorities had extended by a week to Feb. 10 in an effort to limit the virus’ reach. That holiday extension also ground factory production to a standstill.

Even if workers can get back on the job, some are opting to stay at home, rather than risk venturing out and potentially contracting the virus, which had killed 1,873 people as of late Monday. Five people outside of China had perished; the rest of the fatalities occurred in mainland China.

Chinese factories are also being delayed from getting back into production mode by governmental requirements related to containing the virus. “Each factory has to apply to their local government in order to reopen,” Lederer told Counselor. “In order to do this, they have to provide records and a prevention plan that outlines how they will keep the virus from spreading.”

The factory downtime could trigger disruption that lasts for months, some promo pros said. “We anticipate that many (factories) might resume their regular operations in early March. Others may not reopen until April,” Paul Lage, president of Top 40 supplier IMAGEN Brands, the parent company of Crown (asi/47700) and Vitronic (asi/93990), said in a letter to distributors. “In the meantime, orders for their products are still coming in and they are starting to accumulate some significant backlogs. Therefore, this potential disruption may last until early summer.”

If prolonged, factories’ inability to produce products could lead to inventory shortages for North American promo suppliers. Lage emphasized that IMAGEN beefed up its inventory prior to the Chinese New Year beginning in late January. As such, the supplier doesn’t anticipate inventory issues in the short term. Still, if disruption drags on, product categories IMAGEN carries that could be impacted include drinkware, umbrellas, tech products and some bags.

“We are also looking to sourcing alternatives of these products outside of China,” said Lage. “We do have alternatives for our cotton products and do not see them being impacted at this time. This is an industry issue and all suppliers that source product in China and surrounding countries will be experiencing the same issues.”

Meanwhile, Lederer told Counselor that Prime is in a strong position from an inventory and supply chain position, for the time being. “We have a significant amount of inventory in our four warehouses and decoration centers across the U.S., so there has been no interruption to our supply chain up to this point,” he said. “Also, Prime has moved a meaningful amount of production outside of mainland China. While it is not a majority yet, it does mitigate some potential interruption.”

Even so, issues could lie ahead for Prime and others if Chinese factories remain hobbled headed into the spring, Lederer said. “Should there be delays of more than 30 days, it will begin to have an impact on our product supply starting in the second half of the year,” he told Counselor. “We remain optimistic, but the situation is quite fluid right now.”

Even if production revs back into top gear soon, there could, at least initially, be shipping issues that cause delays in getting products stateside. That could exacerbate potential inventory shortages and compel more suppliers to utilize pricey air freight to get their products to North America. “The cost for suppliers might increase for certain items, should they decide to airship any delayed shipments,” said Lederer. “However, that is not sustainable, as it’s extremely costly. Therefore, we might see price increases in the latter half of the year.”

Jonathan Isaacson, CEO of Top 40 supplier Gemline (asi/56070), said in a letter to distributors that shipping companies in China appear to be gradually reopening, but the potential for backlogs is real. “Although we are expecting them to gear up in the coming days and weeks, this remains the biggest unknown in terms of planning,” Isaacson said. “The potentially large backlog in the global transportation system will likely mean some delays, but we will not have a more complete picture for some time.”

For more on potential shipping issues and possible price increases, check out this article and video from Counselor.

Beyond shipping and pricing issues, the promo industry is also contending with postponements of important trade shows. The Hong Kong Trade Development Council, for example, has postponed eight of its April trade shows until the end of July. Those include the Hong Kong Gift Show, which many North American promo products leaders attend.

Meanwhile, Canton Fair, China’s oldest and biggest trade fair, which is also attended by promo industry pros, has suspended exhibition activities due to the outbreak of the virus. Canton Fair was originally scheduled to hold its spring season exhibition at the Canton Fair Complex on April 15.

As of this writing, 2019 Novel Coronavirus had infected more than 71,000 people. Cases have appeared around the world, though the overwhelming majority of infections – 70,622, according to The Wall Street Journal – are in mainland China. Authorities have confirmed 15 cases in the U.S. and eight in Canada.

How Does The Virus Spread?
Naturally, there’s concern in the promo industry – and society at large – about how Novel Coronavirus spreads. Most often, the virus goes from one person to another through respiratory droplets, such as those emitted in a cough or a sneeze, according to the Centers for Disease Control and Prevention, the United States’ leading national public health institute.

The CDC notes that the virus has “poor survivability” on surfaces. Still, the organization also says that “it may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this is not thought to be the main way the virus spreads.”

Given the newness of the virus, scientists can’t say definitively how long COVID-19 might last on surfaces that have not been disinfected. Still, studying other coronavirus strains might give some idea.

“Based on the current available data, I would primarily rely on the data from SARS coronavirus, which is the closest relative to the Novel Coronavirus — with 80% sequence similarity — among the coronaviruses tested. For SARS coronavirus, the range of persistence on surfaces was less than five minutes to nine days,” Dr. Charles Chiu, an infectious diseases professor at the University of California, San Francisco, told CNN.

“However,” Chiu continued, “it is very difficult to extrapolate these findings to the Novel Coronavirus due to the different strains, viral titers and environmental conditions that were tested in the various studies and the lack of data on the Novel Coronavirus itself. More research using cultures of the Novel Coronavirus are needed to establish the duration that it can survive on surfaces.”

The CDC has continued to maintain that there’s no evidence to suggest the virus can spread by imported products or shipments coming in from overseas.

“There is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures,” the CDC says. “Currently there is no evidence to support transmission of COVID-19 associated with imported goods and there have not been any cases of COVID-19 in the United States associated with imported goods.”

Isaacson, who has spoken with health experts about the virus, said the transmission risk on imports/shipments is described as “‘extremely low’ – especially given the shipping time for most products from China. Based on this, I would personally have no problem giving an imported product to my children to use.”

Original article published in www.asiacentral.com by Chrisopher Ruvo

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Trump To Put 10% Tariffs On $300 Billion More In Chinese Imports

The move has potential to trigger price increases on a broad spectrum of promotional products.

President Donald Trump said Thursday that he plans to place tariffs of 10% on an additional $300 billion in Chinese imports – a move that could potentially drive up pricing on a gamut of promotional products in the months ahead.

Trump said the new tariffs would take effect on September 1st. With tariffs of 25% already attached to $250 billion in imported Chinese goods, the new levies would mean that virtually everything American businesses buy from China will be subject to tariffs.

The Dow Jones Industrial Average was 300 points lower in the immediate aftermath of Trump’s announcement. The S&P 500 was down 1.1%, while the Nasdaq Composite was off 1.1%, nearly wiping out an earlier jump of more than 1.6%. Markets continued the retreat Monday after China escalated tensions by allowing its currency to slip to an 11-year low against the dollar, while also threatening to hit U.S. agricultural products it bought recently with tariffs.

In a series of tweets, Trump alluded to several reasons why he was moving forward with the new tariffs, despite what he characterized as “constructive talks” toward a new U.S.-China trade deal that occurred at the end of July in Shanghai between negotiators for the world’s two largest national economies.

The looming new tariffs come as a surprise. In June, Trump and President Xi Jinping held a sidebar discussion at the G20 Summit in Japan and, ostensibly, agreed to a kind of truce in the trade war that’s been dragging on for more than a year. The easing of tensions led to the resumed face-to-face negotiations that occurred this week. But just as it happened in May when Trump upped the tariff rate on some $200 billion in Chinese products from 10% to 25%, the president seemingly out-of-the-blue decided to proceed with new tariffs, rattling markets, business leaders and consumer advocates.

“Trump’s announcement about additional tariffs on Chinese goods will hit American consumers the hardest,” said David Clement, North American Affairs Manager of the Consumer Choice Center, which represents consumers in more than 100 countries. “Given how interconnected the two economies are, it is ultimately American consumers who are going to be footing the bill for these new tariffs. Legislators need to better understand that tariffs on foreign products end up being a new tax for domestic consumers. Simply put, tariffs are taxes.”

Some – along with Trump himself – have indicated they believe Beijing’s negotiating tactic is to draw out talks until after the 2020 U.S. presidential election in the hope of brokering a deal that’s more favorable to China with a new American president. Conscious of this, Trump’s play on additional tariffs might be intended to catalyze China back into negotiating in earnest now, some analysts opine.

Regardless of the reasons, the new tariffs have the potential to impact almost every supplier and distributor in the promo products industry that buys and sells products imported from China. That’s virtually every company in the space, as the vast majority of promo products sold stateside are produced in China and imported. “This is pretty distressing for all of us,” Eddie Blau, CEO of Top 40 supplier Innovation Line (asi/62660), told Counselor.

Should Trump proceed with new tariffs on $300 billion in Chinese imports, then most every promotional product brought in from China would be subjected to tariffs. Products the administration is considering tariffing include electronics, drinkware, writing instruments, blankets, calendars, golf balls, and all manner of apparel – from T-shirts and track suits to yoga pants, bathrobes and baby garments. The list could go on and on.

“Clearly, the industry will see additional costs running through the system,” Jonathan Isaacson, president of Top 40 supplier Gemline (asi/56070), told Counselor. “How that is managed will be different by supplier and by product, but it is unlikely that any single organization has the ability to absorb this kind of increase.”

Blau foresees a similar dawning reality. “Industry suppliers will have no choice but to continue raising prices to offset the latest tariffs,” said Blau, adding that newly tariffed items in Innovation Line’s value-oriented line could possibly see price increases of 4% to 7%. He worries the trade war will intensify. “It’s likely another round of tariffs will be coming if the trade talks don’t take a more positive direction,” Blau told Counselor. “Industry professionals should be prepared for the latest 10% tariffs to increase to 25% before the year’s end.”

Should tariffs trigger price increases, some ad specialty executives fear the heavier price tags could curtail end-client investment in promo products. “If we have to increase pricing to the end consumer, we will start to push them into other avenues of spending for their marketing dollar,” Bob Herzog, CEO of Top 40 distributor Corporate Imaging Concepts (asi/168962), told Counselor.

More broadly, promo pros fear the tariffs could have a dampening effect on the U.S. economy that causes clients to pull tight the purse strings on their marketing budgets, thereby leading to reduced investment in branded merchandise. “If the tariffs stick around, I could see everything really taking a hit in Q4 – retail, food, travel, promo,” Jason Lucash, SVP of marketing and product development at Top 40 supplier HUB Promotional Group (asi/61966), told Counselor. “A recession could be imminent.”

Amid the trade war, the Trump administration has placed tariffs on $250 billion in Chinese imports. China has hit back with tariffs on $110 billion in U.S. goods. For the promo industry, import tariffs have led to price increases on levy-affected items, contributed to destabilizing the industry norm of annual pricing, and caused uncertainty that hasn’t been good for business, promo executives have said. It’s disrupted supply chains too, providing fuel to what was already a growing movement to diversify production into countries beyond China.

“Supply chains are complicated and generally are not easily moved,” Isaacson told Counselor. “With that said, there are suppliers, like Gemline, with contingency plans in place. For those that lack such plans, this is going to be difficult. Furthermore, while some categories can be moved reasonably quickly, some will be difficult to relocate.”

Isaacson and others noted that some industry firms could be feeling the pressure to continue to meet product safety and social compliance standards amid the supply chain disruption. “In times like this, systems around product and social compliance have the potential to get tested,” he told Counselor. “Again, for companies such as Gemline, who have robust systems and processes, this can be managed. For those that do not have the people and processes to verify, this could increase the risk to the industry around compliance-related problems.”

Original article published in www.asicentral.com, written by Christopher Ruvo

sixtwentysixTrump To Put 10% Tariffs On $300 Billion More In Chinese Imports
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State of the Industry

Healthy. Competitive. Steady.

When Counselor asked distributors for one word to describe the sales environment in 2018, these were the most popular answers. There’s no secret why.

Throughout the year, as the U.S. economy gained steam amid low unemployment, increasing wages and reduced corporate taxes, the promo market benefitted. Following a two-year stretch in which average distributor sales growth hovered around 3%, the ceiling was shattered in the second quarter. Revenue in Q2 jumped by 5.3%, signaling the market was serious about taking a leap forward. Meanwhile, the Counselor Confidence Index, which gauges distributor sentiment, reached an all-time high reading of 117 in Q3. By comparison, when the U.S. was in the throes of a recession in 2009, the reading was 79.

Marketing spend was up. GDP was expanding. All was well. But by the fall of 2018, things began to change. Opening summer salvos of a trade war between the U.S. and China morphed into a tariff-slinging showdown by September. With costs of imported products from China on the rise, suppliers had to decide whether to pass higher prices onto distributors or eat margin. At the same time, distributors had to hold tough conversations with their customers, warning that tariffs could affect their planned orders.

So it came as no surprise that a few months into 2019, when Counselor again asked distributors to characterize the sales climate, that the responses were different. The most common answer – by a significant margin – was “slow.” Looking to the year ahead, distributors were feeling uneasy about the industry, forecasting a market health score of 3.86. Tracked on a scale of one to five, that figure was the second lowest since 2015. Distributors in only one region – the Southwest U.S. – predicted the industry’s health would improve in 2019.

This all leaves the promo sector in an important moment. Overall, the U.S. economy remains a positive. There’s still market share to be won against other ad media. And there’s plenty of room for both e-commerce and relationship-based sellers to thrive, even in the face of stirred up global headwinds.

What’s your greatest advantage in an unsettled market? Information. And that’s exactly what you’ll find in our in-depth SOI report. As you work toward your goals, let the insights and advice on the following pages be your guide – so at the close of 2019, your one-word memory of this year will simply be: success.

Soaring Sales

While average distributor revenues grew faster in 2017 than U.S. GDP expanded, it was just an average year for promo products sales. Yet, 2018 ushered in a breakthrough stretch. The promo market roared in the last nine months of the year, leading to a new annual record for industry revenue.

Despite increasing trade headaches and pressures from online competitors, distributors pocketed more money from orders in 2018. The average distributor profit margin hit a 10-year high, pushing ever closer to 40%. It hasn’t been lower than 32% since before the Great Recession.

When Counselor asked distributors to report their 2018 promo revenue, nearly 50% said their sales improved compared to 2017. Among distributors that generated more than $1 million in 2018 sales, 70% of them reported growth.

Original article published in www.asicentral.com, written by Jennifer Billock, John Corrigan, Jean Erickson, Kyle Richardson, Christopher Ruvo, Dave Vagnoni & Andraya Vantrease – Research by Nate Kucsma

sixtwentysixState of the Industry
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SOI 2019: Top Products in the Promo Industry

Largest Overall

T-shirts
In 2018, for the fifth straight year, T-shirts reigned as the number-one promotional product category. Logoed tees made up 15.1% of distributor sales last year, a slight increase from 2017. The continued success of the product, distributors say, is partially because it’s just so easy to sell.

“T-shirts make a great giveaway. They’re both a memory and a walking billboard of what you’re doing at the time you’re doing it,” says Jacque Lee, CEO of Silva Screenprinting & Distribution (asi/326062), which mostly sells tees for the corporate recognition and direct-to-retail segments. “They’re also an easy way to document what’s going on in your life cycle, like college or a new job.”

More SOI 2019: Back to Main Page

Other distributors find they’re selling tees mostly to professional groups, schools, small businesses and youth organizations like camps. Across the board, clients are sticking with moisture-wicking tri-blends, says Jeffrey Conger, owner of Infini-Tee Designs (asi/231079), because “cotton shrinks more.”

As for color trends, Jo Girard, owner of Hot Shots Apparel (asi/227751), has seen an uptick in plain white tees with kitschy quotes from movies or sitcoms on them. Conger says the basic core shades are still winners, and safety colors – like neons – are always popular. Coral, Pantone’s Color of the Year, has been gaining traction as well.

One Size Doesn’t Fit All: Here’s a look at the best-selling product categories for three different distributor revenue classes in 2018, with numbers showing the percentage of promo revenues.

Fashionable decoration styles continue to range from a bit retro – think fringe and tie-dye – to tech-enhanced and modern looks involving printing direct-to-garment. And while V-necks remain trendy, Lee says people are gravitating more toward gender-specific fits and designs and away from generic unisex styles. “People associate unisex T-shirts with trade show giveaways,” she adds.

Of course, while trade show T-shirts may not be über-personalized, they can still be valuable for newer brands. “They last a long time, they’re a crowd pleaser, and they make one’s business feel legitimate once it’s imprinted on a T-shirt,” says John Fallon, general manager and partner at Speedy Bee Tees (asi/332198).

On the Rise 
Drinkware
The second-largest category for 2018 promo sales, drinkware has vaulted higher in popularity. Why? A few reasons: Increasingly, drinkware has become a fashion accessory; more buyers are moving away from single-use water bottles; and retail brands like YETI are now trendy in promo.

“These products have really increased sales for a lot of people,” says Henya Betras, owner at Henya Direct (asi/224464). Back in the ’90s, Benya thinks higher-end drinkware pieces were too expensive, “but all of a sudden, there’s been incredible awareness” in terms of value and functionality.

As ROI has improved, customers have been willing to pay more for durability and distributors see that continuing. “Stainless steel isn’t going anywhere any time soon,” says Palma Frable, operations director at Palm Trends Marketing (asi/348373).

An emphasis on health and sustainability has also given the drinkware category a boost. “So many people are into recycling and reusing,” says Brandy Meeks, owner at Element One Promotions (asi/161686).

Frable agrees, noting “people are so much more focused on taking in enough water every day. A lot of businesses are seeing that, and pretty much any company can put their logo on it.”

Will sales of this market slow down? Betras doesn’t see it, believing drinkware could well surpass other products in popularity in the near future. “Pens are great, and so are T-shirts and caps,” she says. “But a two-year-old isn’t going to use a pen. A two-year-old to a 90-year-old, though, is going to use a drinkware product every day, all day.”

Trending Down 
Writing Instruments 
In 2013, logoed writing instruments accounted for 10.4% of distributor sales. After several years of market share declines, the category contributed just 5.7% to distributor revenues in 2018. The reason for the shift, according to distributors, is simple.

“More people are going toward electronic data,” says Sally Back, owner of Backhome Creations. “It may be that they’re using their tablets instead of using paper and pen. I do sell more pens with styluses now.”

Indeed, while styluses are in, oversized and single-function pens are not on-trend, according to George Taggart, president of Medical Print Group (asi/267106). He further suggests distributors push fancy rubber grips, full-color imprinting and hybrid inks, as these features have been gaining popularity in the market.

“The key is getting the pen to someone,” says Dale Hannasch, owner at LA Advertising (asi/255484). “Put it in their hand and give them the feeling of getting a free pen. If they give their own pens out, their customers will probably feel that way too.”

Forecasting Growth 
Health & Safety 
If you’re looking for a category to watch for gains, health and safety products certainly has a number of advantages. First, the segment increased market share to 2.9% in 2018, up from 2% the year prior. Also, the category benefits from practicality – items like hand sanitizers and lip balms are universally appreciated. Finally, the segment is ripe for new product entrants, especially as more Americans crave wellness ideas.

“When a new product is introduced in some product categories, there might be a long adoption time,” says Nate Kucsma, ASI’s executive director of research. “But in this particular market, there’s a quick adoption time. Be alert for new products and innovations coming out.”

And with new innovations come a chance to profit, and the health and safety market is one of the more lucrative places to find it, according to Timothy Lang, owner and founder of Team Lang Promotions (asi/466861) and a former healthcare director.

“There’s usually a good budget, and if you provide a consistent and high level of service, you can generally keep clients longer than some other industries,” Lang says.

Perception vs. Reality: With the rise of logoed T-shirt sales, some might think apparel is taking market share away from hard goods. However, the segment split has actually been relatively stable over the last five years.

The market dynamic is changing as well, Lang notes, giving distributors an edge. “Historically, there was split within the medical industry of B2B and B2C,” he says. “Most primary care providers, urgent care centers and chiropractors would market direct to consumers, and large specialty groups would market B2B to other providers to get referrals.”

With consumers more educated today “they’ll often change providers if they’re not satisfied,” says Lang. “This is causing specialty groups, which is a very large segment, to start focusing more on B2C for engagement and retention.”

The World of Promo Products: A breakdown of the most popular items, shown here as the percentage of distributor sales they represented in 2018. Click here for a larger image of the graphic above.

Original article published in www.asicentral.com, written by Jennifer Billock.

sixtwentysixSOI 2019: Top Products in the Promo Industry
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Patagonia’s Corporate Sales Strategy Shifts Toward Ecology-Minded Clients

Logoed Patagonia vests are set to become a rarer site in some corporate circles, as the Venture, California-based apparel company is limiting who it will provide products for in its corporate sales program. The company is shifting toward more ecologically-minded companies for its corporate sales, aligned with the declaration, “We’re in business to save our home planet,” in its mission statement.

Patagonia’s corporate sales catalog notes, “For each order, we require disclosure as to the type of company whose name will appear on the Patagonia product and how the product will be used.”

How this provision is playing out in certain industries received fresh attention this week when Binna Kim, president of communications agency Vested, shared an email they received when trying to order Patagonia products for a financial services client.

The email read, in part, “Patagonia has nothing against your client or the financial industry, it’s just not an area they are currently marketing through our co-brand division. While they have co-branded here in the past, the brand is really focused right now on only co-branding with a small collection of like-minded and brand-aligned areas…This is a relatively new direction for the brand and this division, all coming through the lens of their new mission statement, ‘We’re in business to save our home planet.’”

Patagonia’s fleece and puffer vests have earned a reputation as part of the de rigueur uniform for professionals in the financial services and technology industries. In Silicon Valley, they’ve become known as the “power vest.” Patagonia has said that it wants to work with more B Corporations, which are businesses that have met high standards of verified social and environmental performance, public transparency and legal accountability. Patagonia is a B Corporation itself.

Patagonia’s products are sold direct to corporate markets and in the promotional products industry through supplier Driving Impressions. Danny Rosin, CAS, co-president of distributor Brand Fuel, says, “Seth Godin tells us to be a ‘mindful-specific versus a wandering generality’ and Patagonia, a leading B Corporation, exemplifies this as they prioritize the environment. I am impressed that Patagonia is willing to risk market share by standing for ideals aligned with their corporate values. This decision is a powerful reminder to all companies to remain focused on their moral compass.”

sixtwentysixPatagonia’s Corporate Sales Strategy Shifts Toward Ecology-Minded Clients
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Five Merch Trends From the Masters

For golf lovers, The Masters can feel a bit like Christmas in April. The excitement, the anticipation, the tradition, the pageantry – it all makes golf’s first major tournament of the year a thrilling event.

If you’re fortunate enough to attend the famous Augusta, GA, golf club where the competition is annually held, then there’s another parallel with Christmas you’re likely to experience: A lengthy credit card receipt detailing all the Masters-branded merchandise you’ve purchased. Official new Masters merch can only be bought onsite at Augusta National Golf Club – an exclusivity that drives ravenous demand.

From a promotional products perspective, the Masters merchandise collections are interesting because they can spotlight trends we might see in the ad specialty sector in categories that range from drinkware to apparel. (After all, golf wear and golf-inspired looks are the stuff and/or inspiration for much of branded corporate wear.)

While we weren’t lucky enough to score tickets to the tournament and were thus unable to peruse the pro shop for logoed merchandise trends (alas…), Golfweek senior writer Geoff Shackelford was on location to engage in extensive swag-spotting. He created an interesting piece on the 2019 Masters merch, from which we culled five interesting trends with relevance for the promo industry.

Drinkware Decoration Is Getting Busier, More Elaborate

Photo by Geoff Shackelford/Golfweek. View the original here.

Shackelford noted that the most popular item at the shop over the opening weekend was a tumbler embellished with cartoon-like graphics depicting landmarks at Augusta. There were some similarly busy designs – including a floral pattern – on mugs that Shackelford smartphone-snapped. Notably, Starbucks released an autumn collection of drinkware last fall that featured abundant floral graphics. Taken together, a conclusion is that end-users’ tastes might be shifting from the sleek, polished sharp-logo look against a wall of stainless steel to a softer, more colorful drinkware design that incorporates more graphic elements.

Frill Collars on Feminine-Cut Wovens

Photo by Geoff Shackelford/Golfweek. See the original here.

The availability of high-quality apparel designed and cut specifically for women has grown exponentially in the promotional products industry and in the traditionally male retail sportswear market, including golf. In the promo industry, perhaps further expansion will see feminine-cut woven button-downs with a turtleneck or mock turtle neck accented with frills, as seen here, come to the branded apparel space.

Pastels for Tees

Photo by Geoff Shackelford/Golfweek. See the original here.

The “lobster” color T-shirt shown here points to a broader trend of which promo pros should be aware. End-buyers that range from breweries and colleges/fraternities/sororities, to resorts and golf courses, are increasingly seeking out T-shirts in soft pastels, sometimes with a slightly faded/vintage look. The pastel palette projects a relaxed, summery vibe that evokes lifestyle brands like Southern Tide and Vineyard Vines that’s “in” with a variety of end-users.

Everyone Wants Trucker Hats (With A Patch)

Photo by Geoff Shackelford/Golfweek.

Hardworking, blue collar “trucker” hats at Augusta – a golf course synonymous with America’s version of aristocracy? Yes, as it turns out. Perhaps there’s no greater confirmation of how ubiquitous a style has become than when it enters end-user markets that you might never have imagined. Such is the case here. What’s also notable is that the hat features a logoed patch – a style element that has grown increasingly popular on headwear over the last couple years and that is proving especially sought after with trucker caps.

Simple Text Decoration For Caps

Photo by Geoff Shackelford/Golfweek. See the original here.

While the cap shown here was made for women, Shackelford notes that men “desperately” wanted them as well because of the elegantly simple “Masters” embellishment. Other caps in the collection featured a similarly subtle script styling. So, while some markets might favor the heavier graphics that come with patches and multi-location decoration on headwear, others could be experiencing graphic overload and looking for a touch of understated text-driven simplicity. We could see the subtle font/scripted look playing well on unstructured, curved bill, strap-back “dad hats” at campus bookstores around the country.

Original article published in www.asicentral.com, written by Christopher Ruvo. https://www.asicentral.com/news/web-exclusive/april-2019/five-merch-trends-from-the-masters/ 

sixtwentysixFive Merch Trends From the Masters
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