Distributor Sales Survey An Uneven Recovery P. 14 Home Run Looks Sports Uniform Trends P. 24 The Charity Market Promotional Products Work For Good! P. 38 Considering Commissions Are Sellers Getting Their Share? P. 54 Inflation Then and Now Amid rising costs, what lessons can promotional products professionals learn from runaway inflation’s effect on the industry four decades ago? P. 18
14 AN UNEVEN RECOVERY Although 2021 was a comeback year for promotional products as a whole, the “return to normalcy” was not as fruitful for smaller companies as it was for their larger counterparts. 18 INFLATION: THEN AND NOW Amid rising costs, what lessons can promotional products professionals learn from the runaway inflation four decades ago? Six veteran business owners look back on that time and talk about what really concerns them now. 4 Perspectives Customer First 8 Feedback 11 INNOVATE 12 Question Earning More Of A Client’s Business 24 Eye On Apparel Team & Sports Uniforms 31 GROW 32 Profiles Denise Taschereau Anne Stone 38 Promotional Products Work Charities 42 Sales How Well Do You Know Your Largest Buyers? 44 Editor's Picks Games & Toys 53 THINK 54 Management Considering Commissions 57 Fast Forward Coca-Cola Opens Flagship Store In London 64 Five Minutes With Megan Erber, S & S Activewear 66 Viewpoint Creating Consistency 69 CONNECT 70 Close Up Jodie Schillinger, Maple Ridge Farms 75 PPPC Communiqué 76 Inside PPAI 79 New Members 83 Datebook 88 The Creative Calendar contents Promotional Products Business The Official Business Monthly of Promotional Products Association International JUNE 2022 | JUNE 2022 | 3
Dale Denham, MAS+ President And CEO If you weren’t able to be part of the preview event, know that the next PPW Expo will take place in late September. Plan to invite all your clients to the fall event to maximize your fourth quarter. perspectives Customer First If you are a member of PPAI, you get the benefit of the Association reinvesting dollars into the industry. You are truly our customer whether you are a supplier, distributor, business services provider or a buyer of promotional products. Just as every business ultimately exists to serve its customers, PPAI exists to serve our membership, and the customer must come first. It’s very cliché to say but growing more challenging to achieve. Customer demands have been increasing steadily over the last 20 years. We can thank Amazon and others for the fact that people now expect a great “customer experience,” which usually involves an investment in digital transformation to make things easier. Other demands such as Corporate Social Responsibility (CSR) are newer but gaining momentum faster than many predicted. These increasing demands make it more important than ever for leaders to make smart investments. Every expenditure of time or money should involve putting your customer first over the long term and start with the question, “how does this impact the customer?” Some investments will be easier to tie to customer experience than others, such as a new website. Other investments may be less clear, such as replacing an internal system or switching marketing automation platforms. If nothing else, asking how the initiative will benefit the customer gives you the opportunity to maximize the value of any investment with a focus on the customer. PPAI puts our members/customers first in our investments, and we expect to help you do the same for your own customers. Our most significant investment is in the Promotional Products Work campaign, and with it, Promotional Products Work (PPW) Expo, which just wrapped its inaugural event in May as a preview of what will become a signature PPAI production. The PPW Expo puts the ultimate “customer” of promotional products first. In-person “end buyer” shows have been succeeding in the industry for many years, and during COVID lockdowns, the online end buyer events became extremely valuable to keeping clients informed. Clearly an in-person event is the most valuable, but few clients will travel very far to attend an in-person event on promotional products. Thus, the PPW Expo allows suppliers and distributors to engage with end buyers, no matter where they were located. In addition to product pavilions and supplier virtual booths, PPAI provides education on promotional products to inspire clients and highlight some of the best aspects of the industry. If you weren’t able to be part of the preview event, know that the next PPW Expo will take place Sept. 29. Plan to invite all your clients to the fall event to maximize your fourth quarter. You can learn more about our initiative at PromotionalProductsWork.com. The PPW Expo is an important part of how PPAI is leveraging digital transformation to benefit our members and driving customer value. We have several other initiatives to drive value to our members, investing in both CSR and the industry’s digital transformation, with a focus on ensuring that we advance the overall marketplace for the benefit of our community of members. As you consider your investments, always ask “how will this impact my customer?” Our investments will put you, our customer, first. 4 | JUNE 2022 |
PRESIDENT & CEO Dale Denham, MAS+ 888-I-AM-PPAI EXECUTIVE VICE PRESIDENT Robert I. McLean, Jr., CPA, CAE, CEM VICE PRESIDENT, BUSINESS DEVELOPMENT Alan Peterson DIRECTOR OF FINANCE Brigitte Rousseau, CPA, MBA DIRECTOR OF INFORMATION TECHNOLOGY Paul Elfstrom DIRECTOR OF ADVOCACY, EDUCATION AND MEMBER ENGAGEMENT Anne Stone, CAE DIRECTOR OF MARKETING Keith Vincent DIRECTOR OF DIGITAL TRANSFORMATION Edwin Gonzalez PUBLISHER & EDITOR-IN-CHIEF Josh Ellis 972-258-3028 JoshE@ppai.org NEWS EDITORS James Khattak 972-258-3052 JamesK@ppai.org Jonny Auping 972-258-3044 JonnyA@ppai.org ASSOCIATE EDITORS Danielle Renda DanielleR@ppai.org Kristina Valdez 972-258-3094 KristinaV@ppai.org ART DIRECTION SPARK Publications SPARKpublications.com 704-844-6080 ADVERTISING MANAGEMENT DIRECTOR OF BUSINESS DEVELOPMENT AND EXPOSITIONS Ellen Tucker, CAE 972-258-3095 EllenT@ppai.org SALES MANAGER AND NATIONAL ACCOUNTS Melissa Massey 972-258-3029 MelissaM@ppai.org MAJOR ACCOUNT MANAGER Brandon Dunaway 972-258-3090 BrandonD@ppai.org ACCOUNT MANAGERS Connie Brazil 972-258-3064 ConnieB@ppai.org Taylor Coward 972-258-3033 TaylorC@ppai.org ADVERTISING CONTACT Mimi Duong 972-258-3025 MimiD@ppai.org BOARD OFFICERS CHAIR OF THE BOARD Dawn Olds, MAS HALO IMMEDIATE PAST CHAIR Todd Pottebaum, MAS+ Quality Resource Group, Inc. CHAIR-ELECT OF THE BOARD Kevin Walsh, CAS Showdown Displays VICE CHAIR, FINANCE SERVICES Andrew Spellman, CAS Therabody BOARD MEMBERS TERMS EXPIRING 2023 R. Renée Jones, MAS+ A Creative Touch David Nicholson Polyconcept NA TERMS EXPIRING 2024 Dawn Olds, MAS HALO Kevin Walsh, CAS Showdown Displays TERMS EXPIRING 2025 Noah Lapine Lapine Associates, Inc. Andrew Spellman Therabody TERMS EXPIRING 2026 Chris Anderson HPG Denise Taschereau Fairware AT-LARGE DIRECTOR TERM EXPIRING 2024 Melissa Ralston, Koozie Group REGIONAL ASSOCIATION COUNCIL DELEGATE TERM EXPIRING 2023 Lindsey Davis, MAS Raining Rose, Inc. PPAI HEADQUARTERS 3125 Skyway Circle North, Irving, Texas 75038-3526 Phone: 888-IAM-PPAI (426-7724) www.ppai.org, pubs.ppai.org READER RESOURCES SUBSCRIBE TO PPB: Subscribe online at pubs.ppai.org or send your name, title, company name and mailing address, along with phone and fax, to PPB Subscriptions, 3125 Skyway Circle North, Irving, Texas 75038. Or phone in your subscription to 972-258-3019. Include payment with your order. Visa, MasterCard and American Express are accepted, along with checks. Additional member subscriptions are $58 for PPAI member companies (U.S.), $70 (Canada and Mexico) and $75 (international). Nonmember subscriptions are $72 (U.S.), $82 (Canada and Mexico) and $92 (international). Please allow four to six weeks for start of subscription. ADVERTISE IN PPB: Download a media kit with rates and specs for all PPAI print and digital publications at pubs.ppai.org, or call 972-258-3019 or e-mail mediasales@ppai.org. WRITE FOR PPB: The magazine regularly accepts articles from both professional writers and industry experts—like yourself. Find out everything you need to know about submitting an article or an idea by reading PPB’s Writer’s Guidelines available at pubs.ppai.org/submit-content. 6 | JUNE 2022 |
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feedback Send feedback on articles in PPB or opinions on industry issues to JamesK@ppai.org. popicon / shutterstock.com Recipients Of PPB’s Greatest Companies To Work For Honor Win Praise In May, Newslink announced the winners of PPB’s Greatest Companies To Work For competition. This year, 47 companies made the cut, including distributors, suppliers and business services firms of all stripes and sizes. While the July issue of PPB will share more about the winners and what earned them their place on the list, that didn’t stop applause from industry members to pour in after the announcement. Congrats to all our folks at Proforma! I’m excited to be involved with the best in the industry! STEVE FLAUGHERS President/CEO Proforma 3rd Degree Marketing Canton, Ohio American Solutions for Business is just an incredible company. I am proud to be an owner and to share this honor with so many peers! Go Team American! CHRISTOPHER STEVENS Sales Executive American Solutions for Business Sarasota, Florida Most of the suppliers that are on the list are on my go-to list as well! Congratulations to them for being recognized. We really appreciate them! MARSHA GREINER-MASLANKA Sales Reprensentative Logodance, Inc. West Olive, Michigan PPAI 288538, D1 Bid Rigging Indictments A Sign Of A Larger Ailment In April, Newslink reported that three men were indicted by a federal grand jury in Florida for conspiring to rig bids for to the U.S. Army for customized promotional products. This is like popping a small pimple. Big money makes the weak corrupt, and there are a lot of corrupt people, even in the promotional products industry. Forever grateful for the career and the many blessings this industry has afforded me. At the same time, saddened with how ”big business” has infiltrated our nice little niche industry and created a lot of change. Our No. 1 distributor spends more on TV ads now than 99% of the promo distributors sell annually. Just like our society, the gap widens, soon 99.5% to 0.5%. JIM FRANKLYN Vice President of Business Development Swag Promo St. Augustine, Florida PPAI 562712, D5 8 | JUNE 2022 | INNOVATE
INNOVATE An Uneven Recovery Although 2021 was a comeback year for promotional products as a whole, the “return to normalcy” was not as fruitful for smaller companies as it was for their larger counterparts. page 14 Photography by Sean Badger. 12QUESTION: EARNING MORE OF A CLIENT’S BUSINESS? Inflation: Then And Now Amid rising costs, what lessons can promotional products professionals learn from the runaway inflation four decades ago? page 18 24EYE ON APPAREL: TEAM & SPORTS UNIFORMS | JUNE 2022 | 11
EgudinKa / Shutterstock.com compiled by Danielle Renda Earning More Of A Client’s Business QA Distributor Asks: I recently started doing business with a large company. This company was unhappy with their prior distributor partner, which prompted them to find me. However, even though I am now doing some work for them and we have built a good relationship so far, they continue to do business with the other distributor. How do I ask them if we can be the ones to provide these products for them, too? Whenever an end user invites me to take over an account, I always ask why they were unhappy with the previous distributor. I literally ask this question: “What did your previous distributor do or not do that caused you to consider working with me?” This question sparks a conversation with the prospect, and we learn about each other’s businesses and discover if we’re a good fit. My experience is that buyers fire their distributor for three reasons: price, poor service and miscommunication. If a customer is shopping for a new distributor for better pricing, I don’t take them too seriously. If the customer is shopping for a new distributor for the other two reasons, I see this as an excellent opportunity and I pursue the relationship. If we wind up being a good fit, sometimes the relationship starts slowly and then builds over time. I realize I’m the new guy, and the customer has to witness firsthand that I can be trusted with their brand and their money. I never push the relationship because that’s my selling style, so I focus on providing value and differentiating myself from the previous incumbent distributor. As time goes by and the customer becomes more and more comfortable with me, I’m in a better position to ask for more work. I hope this helps. AVERY MANKO President The Manko Company Mendenhall, Pennsylvania PPAI 221758, D4 It’s all about creating valuable partnerships that aremore than just best pricing. The fact that you are fair, reliable and show you understand their needs is what is important. If you are not getting the respect and position you deserve, then ask yourself if the amount of time you put into this relationship is worth it, or if your time is better spent on other accounts. BRUCE FELBER, MAS Senior Account Executive The Image Group Holland, Ohio PPAI 103424, D11 About five years ago, we started to set up our larger accounts on loyalty rebate programs. These rebates can be used as credits toward future orders. This program has been a huge win for our clients and for us. Maybe something like this wouldwork for you. RICK HAWK Senior Account Manager BSN Sports Farmers Branch, Texas PPAI 793293, D1 12 | JUNE 2022 | INNOVATE
Yay for getting that business! I’m always a fan of sending the buyer a nice spec or personalized sample of a great product or, “Thought of [company name] when I saw this product,” or, “What do you think of [this item] for [next big event]?” Also, remember they came to you because of the lack of good service from another company. Focus on your service quality with them and even if it takes them longer to hand over all business, it will likely be worth the wait, proving to them how awesome you are over time. Quality over quantity! TARA AUSTIN BURNS Owner and president Branded Kingsport, Tennessee We’ve been in a similar position several times. What typically works is, after an order is delivered—one currently in production or the next one placed— follow up to make sure everything was received, was correct and they are happy with the quality and service. Assuming they say “yes,” then ask, “What will it take for us to earn the rest of your business?” Just be prepared to answer how you are able to scale (ideation, funding and service-wise) to meet their needs. I would assume that would be their only hesitation, or they would have shifted everything to you already. Again, this has worked for us! THOMAS B. RECTOR, MPA CEO and founder ScreenBroidery Indianapolis, Indiana Do You Have An Answer? A Supplier Asks: Distributors, would you prefer to send a purchase order directly to a supplier or sign into a supplier’s website and order directly from their site, or have the option to do both? What are your thoughts on using an electronic PO on the site? A Distributor Asks: Between supplychain disruptions, fickle customers and other day-to-day issues, how many of you have a quality control component to your purchase orders? This week alone, I sent and received about 30 emails regarding PO changes for a specific customer’s order. Email your response(s) to Question@ppai.org for the chance to be featured in a future issue of PPB magazine. PPAI: 111248 | ASI: 35375 | SAGE: 50327 | UPIC: ACCENTS | DC:101273 www.americanaccents.com 888.287.7883 PERFECT FOR... ѭInterior print optional ѭ 8FRUQJ PNYX ѭ 5WTIZHY UFHPFLNSL ѭ 8ZGXHWNUYNTS GT]JX ѭ <JQHTRJ PNYX ѭ FSI RTWJ We have over 60 sizes to choose from! ѭFull color digital imprint ѭNo die cut fees ѭQuick turnarounds ѭEasy to assemble ѭSelf locking Need Mailing Boxes? ѭMade & printed in the USA ѭPacking tissue paper available 5 Piece minimums | JUNE 2022 | 13 INNOVATE
An Recovery Although 2021 was a comeback year for promotional products as a whole, the “return to normalcy” was not as fruitful for smaller companies as it was for their larger counterparts. By Jonny Auping When PBBpublished the findings of the 2018 Distributor Sales Volume Estimate, there was an impossible-to-overlook development: Small companies were on the rise heading into 2019. The industry as a whole had a 6.27% increase over 2018, but as was reported at the time, “The growth was mainly driven by sales from small distributors,” who increased both their sales and overall representation in the industry’s makeup. Three years and one pandemic later, that trend has stalled. The 2021 Distributor Sales Volume Estimate showed a healthy increase of (12.5%) in sales volume over COVID-riddled 2020, but the makeup of those gains among small and large companies are quite different. Small distributors were barely able to make it to a sales volume slightly under that of 2020. Only 42.7% of the industry’s total sales volume came from small distributors, which is down from 48.3% in 2020. Un e ven FEATURE | 2021 U.S. Distributors’ Promotional Products Sales Survey 14 | JUNE 2022 |
For small distributors—companies reporting less than $2.5 million in annual sales—average sales peaked at $470,000 in 2018, then dipped in 2019 to $422,000 and rolled slightly to $424,00 amid the initial pandemic year of 2020. In 2021, however, the group’s average sales dropped to $409,000. The promotional products industry’s increase in overall sales volume is likely attributed to an increased return to normalcy from 2020, which was more greatly affected by pandemic lockdowns. Demand for personal protective equipment decreased in 2021, and the sales of traditional promotional products picked up. For more than 50 years, PPAI has been collecting, analyzing and reporting distributor sales, and this study is considered the most definitive and comprehensive of its kind in the industry, useful in understanding the current landscape for promotional products companies and as a potential tool in any attempts to try to prepare for the future. For more than 50 years, PPAI has been collecting, analyzing and reporting distributor sales, and this study is considered the most definitive and comprehensive of its kind in the industry. Key Findings While it’s important to analyze where the increased sales come from, there is no denying that the industry as awhole did bounce back fromthe tumultuousness of 2020. Promotional products sales by distributors reached $22.1 billion in 2021, up 12.5% from2020’s $19.6 billion, which had been a sharp decline attributed to the first stage of the pandemic. See Figure 1. That $22.1 billion in sales is not quite on par with 2018 and 2019 sales totals, which both eclipsed $24 billion. It’s worth noting that while there were some returns to normalcy in 2021 when compared to 2020, the industry still contended with multiple new variants of COVID-19, various economic uncertainties and considerable worldwide supply chain delays. All told, 63% of distributors reported increased sales in 2021, which could only be said of 20% of distributors in 2020. Company Size Comparisons There was a sizable difference in growth between the large and small companies in 2021. In terms of sales volume, large distributors experienced a 24% increase. Meanwhile, smaller companies actually failed to reach 2020’s sales levels and saw a 0.46% decrease. See Figure 2. Figure 1: 10-Year Industry Performance 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 $25 B $20 B $15 B U.S. PROMOTIONAL PRODUCTS SALES VOLUME IN BILLIONS $21.3 B $23.3 B $24.7 B $24.2 B $19.6 B $22.1 B $18.5 B $19.8 B $20.0 B $20.8 B Distributor Company Size 2021 Sales Volume 2020 Sales Volume Total Difference % Increase/Decrease in Sales Volume Over 2020 Under $2.5 million $9,423,672,556 $9,466,975,349 -$43,302,793 -0.46% $2.5 million or over $12,654,262,859 $10,150,136,798 $2,504,126,061 24.67% Total $22,077,935,415 $19,617,112,147 $2,460,823,268 12.54% Figure 2: Annual Estimate of U.S. Distributor Sales in 2021 vs. 2020 2021 U.S. Distributors’ Promotional Products Sales Survey | FEATURE | JUNE 2022 | 15
It is not entirely clear what to fully attribute that discrepancy to beyond the possibility that many smaller distributors continued to struggle with pandemicrelated issues, or that they were no longer clients’ preferred partners once restrictions began to ease. Regardless, the report states bluntly that “the growth difference between segments tipped the industry’s balance in favor of large distributors,” which is counter to trends from as recently as 2018. For 2021, 57% of the market share was made up of companies with over $2.5 million in annual profit, which represents the largest percentage in the past decade. See Figure 3. An Online Boost It can’t be overlooked that the share of online sales of promotional products was 25.8% in 2021 (up from 17.3% in 2020). That larger share resulted in a massive increase in total volume of online sales. Once again, though, that increase wasmostly felt by larger companies, which saw a whopping 91.1% increase in online sales. Large companies did $4.2 billion in online sales in 2021 compared to just $2.2 billion in 2020. While small companies saw amuch smaller growth in online sales, they still mademore in online sales than they had in the previous five years. The total reported online sales fromall companies was $5.7 billion, which suggests it is picking up a trend that peaked in 2018 with $6 billion. See Figure 4. Business With Non-Industry Suppliers On The Decline Small distributors continued to do business with nonindustry suppliers at a rate on par with 2020, but large distributors only did 13% of business with suppliers outside the industry, down from 17% from 2020. The Internal Survey Report theorizes that this might have been a result of global supply chain issues that came out of the COVID-19 pandemic and which became an increasing obstacle as 2021 progressed. Many supply chain issues that began in 2021 have carried into 2022, and so it is possible that this trend may remain for our current year. The total number of sales in products from non-industry suppliers came out to $2.8 billion, which is 5.7% less than 2020. Read The Full Report For Yourself You can find more detailed results, including products, programs, and industry categories by percentage of annual sales, in the full report, available free to PPAI members and for purchase by companies not eligible for membership. Log in to access the full report at www.ppai. org/members/ research or email membership@ppai.org to join. FEATURE | 2021 U.S. Distributors’ Promotional Products Sales Survey Figure 4: Online Sales Contribution to Distributor Business, 2016-2021 $4.2 B $3.3 B $3.3 B $2.2 B $4.2 B $4.3 B $4.7 B $0.9 B $1.1 B $1.4 B $1.2 B $1.2 B $1.5 B $5.4 B $6.0 B $4.5 B $3.4 B $5.7 B +67.3% +91.1% +23.8% UNDER $2.5 MILLION OVER $2.5 MILLION 2016 2017 2018 2019 2020 2021 Distributor Company Size Change Over 2020 Figure 3: Market Share By Distributor Size, 2010 - 2021 OVER $2.5 MILLION UNDER $2.5 MILLION 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 50% 50% 49% 54% 55% 50% 50% 51% 46% 58% 42% 56% 44% 56% 44% 52% 48% 57% 43% 45% 16 | JUNE 2022 |
How Did Retail Branded Products Fare? Retail branded products were only introduced to the survey a few years ago. PPAI defines retail branded products as “consumer-facing, brand name products that add a sense of distinction to incentive and recognition programs as well as individual end-user gifts (Yeti, Maui Jim, Inc., TUMI, Nikon, Inc., etc.).” This applies to the majority of distributors in the industry. The number of distributors selling retail branded products in 2021 was relatively unchanged compared to 2020. Every large distributor indicated they sold them (compared to 97% in 2020) and 84% of small companies reported they did (compared to 81% in 2020.) There was a slight increase in the actual size of sales that came from retail branded products. The industry sold $4.5 billion in retail branded products, which is a 2.6% increase from2020 but still nearly $1 billion short of 2019. 2022 Outlook And Expectations In spite of current economic challenges including prices rising worldwide—see our report on the industry’s reaction to current inflation levels on page 18—the majority (70%) of distributors who participated in the survey expect higher sales and profit for 2022 than 2021 (and 2020). Understandably though, that optimism is statedmore strongly among large distributors. A total of 36% of distributors under $2.5million in annual sales predicted sales either the same or less than they achieved in 2021. Only 11% of distributors with over $2.5million in annual sales had as conservative or pessimistic predictions. Similarly, 77% of large companies predicted greater profits in 2022 compared to only 55% of smaller companies who shared such optimism. HowThe StudyWas Conducted To compile the 2021 Estimate of U.S. Distributors’ Promotional Products Sales for PPAI, the survey was distributed via email to both PPAI members and non-member promotional consultant companies. The sample was drawn from PPAI and UPIC (Universal Promotional Identification Code) lists. The top 50 distributors were also reached by phone to make sure their information was included in the analysis because the omission of any distributor with a large volume of business could distort the statistics. Figure 5: U.S. Distributor Business with Non-Industry Suppliers, 2012-2021 OVER $2.5 MILLION UNDER $2.5 MILLION 2017 2018 2019 2020 2021 2012 2013* 2014 2015 2016 19% 19% 12% 12% 13% 13% 13% 13% 13% 13% 11% 12% 12% 12% 14% 16% 17% 17% 17% 20% 2022 Sales Expected to be... Figure 6: U.S. Distributor Business with Non-Industry Suppliers, 2012-2021 Figure 7: Distributors’ 2022 Sales Predictions OVER $2.5 MILLION UNDER $2.5 MILLION GREATER THAN 2021 OVER $2.5 MILLION UNDER $2.5 MILLION ALL DISTRIBUTORS SAME AS 2021 LESS THAN 2021 2018 2019 2020 2021 $3.7 B $5.4 B $4.4 B $4.5 B $1.9 B $2.9 B $2.1 B $2.2 B $1.9 B $2.4 B $2.1 B $2.3 B 100% 80% 60% 40% 20% 0% 64% 27% 9% 89% 9% 2% 68% 24% 8% 2021 Prediction: 55% 2021 Prediction: 62% 2021 Prediction: 56% Auping is a news editor at PPAI. 2021 U.S. Distributors’ Promotional Products Sales Survey | FEATURE | JUNE 2022 | 17
Inflation: Then And Now Amid rising costs, what lessons can promotional products professionals learn from the runaway inflation four decades ago? Six veteran business owners look back on that time and talk about what really concerns them now. By Tina Berres Filipski When the annual inflation rate jumped to 8.5% this spring, it marked the highest increase since January 1982. But unlike 40 years ago, this time around the record inflation isn’t coupled with soaring interest rates, which averaged over 16% in 1982 (although the Fed has indicated six interest rate increases by year end). It’s also not accompanied by high unemployment. By the end of 1982, unemployment was at nearly 11%, the highest since World War II. In contrast, in March 2022, unemployment was a mere 3.6%. There’s also the issue of timing. The last time inflation neared 8%, it was spiraling downward after peaking in 1980 at 14.8%. The inflation we’re experiencing now is on an upward trajectory. But there’s something else different about inflation this time compared with 40 years ago that seems to temper its threat: It’s being overshadowed by a number of substantial issues and world events—a rebounding economy following the pandemic, Russia’s war on Ukraine, the soaring cost of gasoline, a dearth of ready-to-work employees and supply chain disruptions that affect consumers and businesses struggling com FEATURE | Rising Inflation 18 | JUNE 2022 |
Rising Inflation | FEATURE | JUNE 2022 | 19
to purchase everything from durable goods and products on grocery store shelves to raw materials for manufacturing. Those who were in business the last time inflation flirted with double digits—including those interviewed in early April for this story—remember it as a very different situation. “It’s nowhere near as bad now as it was 40 years ago,” says Gene Geiger, MAS, who started working on the manufacturing side of his family’s distributorship, Geiger, in Lewiston, Maine, in 1978. “During the Carter Administration, it was much worse. Business interest rates were up to 18%. Back then you couldn’t get a fixed-price quote on certain materials—you didn’t know the price until it was shipped to you.” Pricing on finished goods was also a big consideration. “It was a different world then,” remembers Mark Gilman, CAS, chair of the board for Shawnee Mission, Kansas, supplier Gill Studios, Inc., adding that the biggest concern in those days was managing the price increases that came with inflation. Forty years ago, suppliers printed their catalogs in January and prices remained in effect throughout the year. “We were obligated to sell at the prices printed in those catalogs,” he says. “Inflation is easier to manage this time around because we’ve gone digital.” To hedge against the 1982 inflation, Gill Studios increased its inventory holdings, even if it didn’t have the orders to support it. “We were making a large investment in raw inventory,” Gilman says. “There were high gas prices. Everybody was concerned we were running out of oil, so prices skyrocketed, and availability shrunk.” In the late ’70s, Gilman implemented an 8% price increase on his product line and says he heard plenty about it from customers. He thinks people are more understanding about price Forged InThe Fire Major industry companies were started during the hyperinflationary period of the late ’70s and early ’80s. Despite inflation, or maybe because of it, Tom Riordan saw the late ’70s as an opportune time to get into business and opened supplier Maple Ridge Farms in Mosinee, Wisconsin, in 1978. At the time, the only thing he was focused on was making sales. “Inflation wasn’t even on our radar,” he says. “But a few years later inflation caused the Fed to raise interest rates to 18% and we felt that.” He was also concerned about the pricing printed in his catalog. In 1984 or 1985, when he sent his catalog to the printer, he remembers that he raised prices 10% across the board and sales were off maybe 20% for the year, but profits were up 10%. “We never heard much about that across-the-board 10% price increase, but back then prices of everything were going up,” he says. That same year, Greg Muzzillo also opened his distributorship, Proforma, in Cleveland. He doesn’t recall inflation being a deterrent. “We were growing like a wild week back then—we went from a quarter of a million dollars, to $1 million to $2 million and quickly got to $5 million in those early years,” he says. “I was hustling so hard I didn’t notice inflation.” When Ira Neaman, MAS, opened supplier Vantage Apparel in Avenel, New Jersey, in 1977, he remembers inflation and interest rates being the two main factors that affected his business. “Inflation was 13.5% and consumer interest rates were 20-21%. Business loans were about 4-5% lower and you worked within those constraints. That was the cost of doing business in those days,” he says. “You had to be efficient. No fluff, no waste. Everybody was accustomed to inflation; everyone was dealing with the same issues. It was expected.” FEATURE | Rising Inflation 20 | JUNE 2022 |
increases today than they were in 1982 because prices are rising across all industries. There’s also much more news coverage, and consumers are more savvy and better informed. Still, inflation is a concern. “Inflation is the kind of thing that can force small businesses into making serious decisions, if it causes more borrowing,” he says. “Small businesses want to remain as liquid as they can.” With inflation forcing prices up, business was good in those days. “I remember boasting to a fellow supplier that we had done all these trade shows and made all these phone calls and increased our business 25%,” Gilman says. “The supplier said his company didn’t do any of those things and his business went up 25%, too.” Bob Waldorf, MAS, who opened Idea Man, Inc. in Los Angeles in 1971, was running a booming business when inflation hovered near 8% in 1982. He recalls prices increasing, defense contracts in his community being eliminated and a steep rise in unemployment. It was an uneasy time. “We had to control our costs to the best of our ability. But when prices went up, we were able to increase our profits,” he says. Geiger remembers how difficult it was to manage costs. He says his manufacturing business was not threatened with going out of business, but it did have to adapt. “We had to use different materials or invent new products that were smaller and allowed us to cut costs. For example, we would put lowerpriced cover materials on our diaries. We’d look at costs and figure out how to adapt our products to keep costs lower, assuming that we couldn’t raise prices.” Ira Neaman, MAS, opened supplier Vantage Apparel in Avenel, New Jersey, in 1977, and found inflation an advantage in that his young apparel company was competing head-to-head with established, publicly traded companies that had earnings expectations. The fact that Vantage didn’t, leveled the playing field. Neaman sees two other big differences in today’s situation compared with 40 years ago. In 1982, almost all industry companies were family owned. Today, about half of the top 40 companies in the industry are owned by private equity, with shareholders and expected rates of return. Second, the inflation rate is today only about 6070% of what it was in 1980-81. “So it’s not at the same level of inflation. We are still cresting—I don’t think we’ve hit the top yet,” he says. He says inflation doesn’t necessarily affect the promo industry because its impact is even across all companies. Instead, he sees interest rates as likely having a greater impact on companies that are borrowing or have expected rates of return. “If interest rates go up, public debt goes up and business and banks are starting to compete for money. The government had 26% debt against the GDP back in 1982, now it’s 138%. “In 2022, our debt is $30 trillion; COVID added $6 trillion to the debt. The government’s ability to fund debt allows inflation to occur, but it’s offset against the amount of taxation that has to occur. Inflation is the silent taxation. That’s the biggest issue. There could be slashing of social programs, entitlement programs may have to be cut or redistributed, etc. We’ve played kick the can for a long time and, at some point, that can is like 50 pounds of paint—you just can’t kick it anymore. The next couple of years are going to look much different than 1980-81.” Despite the headlines about inflation, business owners interviewed for this story agreed that today’s unreliable supply chain is by far the bigger issue. “Disruption and changing prices on customers, or having to explain things to customers who are new, makes life more difficult and increases the distrust between buyer and seller,” Geiger says. “You desire “Inflation is the kind of thing that can force small businesses into making serious decisions, if it causes more borrowing. Small businesses want to remain as liquid as they can.” Mark Gilman, CAS, Gill Studios Rising Inflation | FEATURE | JUNE 2022 | 21
to have things go predictably and smoothly, and when they don’t, it causes stress, tension and distrust.” Neaman adds that supply chain issues put a lot of pressure on costs. “Raw materials, any type of dislocation, pushes time and freight, and gas prices become a big concern. Polyester is a big component because it’s oil-based and everybody is dealing with the same elements. I think the big difference is business vs. consumer, and family-run business vs. private equity.” For Waldorf, the impact of today’s inflation compared with 40 years ago is very different. “The supply chain issue is helping clients understand that we need alternative sources, and sometimes those are more expensive. Clients are happy just to get delivery.” He believes suppliers and distributors are going to have to deal with the supply chain disruptions for the near future, but says clients understand because they are having the same problem in their own businesses. Despite the U.S. dollar growing weaker since last year, the supply chain remains top of mind for most business owners. “There is inflation but, to date, suppliers have been careful to keep things in line,” Geiger says. “We know it’s going to be more and more difficult. We know there’s a likely upward inflationary push for all kinds of reasons. Today, it’s getting the supplier to produce and ship what you thought you wanted to buy from them.” He adds, “Anyone who is in business knows there are supply chain issues, and if you are not flexible or understanding, then you are playing a game. It is life today and it is not going to change drastically. China is a COVID mess, Shanghai is in lockdown, ports are locked up, everyone is scrambling to make their product in other countries and raw material costs are going up. On the other hand, some companies are taking advantage of it, and they are getting price increases beyond what their costs are. Whenever there is uncertainty, companies can take advantage to make extra profit.” The delivery time to receive needed boxes for production is another issue straining Tom Riordan’s business at supplier Maple Ridge Farms. “We buy a lot of set-up boxes made in Wisconsin. It used to take us a month to get delivery, now it takes four months. We used to get corrugated boxes in a week, now it’s four weeks.” He’s also concerned about a related issue: employee wages. Riordan hires 200-250 seasonal workers every fall to produce the gourmet food gifts his company sells. He had to raise his walk-in wage by 30% last year to attract enough workers. In addition, his cost of goods has increased by 15-18%. But despite the challenges, business owners are overwhelmingly optimistic about growing sales during this time. “Demand isn’t slowing down for what most businesses are selling,” says Proforma founder Greg Muzzillo. “Their selling price is going up, and if their margin is staying the same, that means their markets are increasing substantially. So they have more money to spend. No one wants to talk about it, but inflation can be good for many businesses. It’s not good for the consumer, but for business owners and salespeople who are commission-based—it couldn’t be better.” The numbers prove this out: In 2021, pre-tax corporate profits rose to $2.81 trillion, a 25% increase easily eclipsing the 7% rise in consumer prices in the same period, according to data from Axios. Aside from the data points, comparing 1982’s inflation rate to today’s doesn’t reveal many similarities because too many other variables have changed. Four decades ago, distributors received orders from customers by mail and took several days to turn them around before sending the order to a supplier and waiting weeks for the product A recession later this year or early next year is a real possibility—and it could prove to be a much bigger issue than inflation. FEATURE | Rising Inflation 22 | JUNE 2022 |
to be produced and delivered to the customer. “The pulse of business today is totally different,” says Geiger, whose company has been in business for 144 years. “Businesses are smart and adaptable, and no matter what happens, we have to adapt.” Geiger says that right now business is very strong, and his first-quarter sales were better than he’s seen in two years. “Ours is a very durable business, and what we are doing is of great value. So unlike so many other types of media where ads come and go, ours persists. It has a genuine value. I think no matter what, our industry survives. It may suffer some ups and downs, but it will persist.” Even though Geiger is enjoying strong sales now, he recognizes the exhaustive toll the supply chain disruptions are taking on his employees. “It’s not easy to be a salesperson or an employee in a distributorship today, and I’m sure that’s the same with a supplier,” he says. Neaman also sees a bright future for the medium. “Promotional products are very efficient in terms of what they accomplish,” he says. “They’ve proven on a ROI or cost-per-impression basis to be very effective. It’s non-intrusive. It’s B2B as opposed to B2C. People’s savings can erode, but business investment will still go on. Consumer spend may slow up, but business investment will continue.” Riordan thinks that if inflation stops now and levels off, it won’t affect businesses too much. But if it continues, it will affect the industry overall. He’s concerned most with rising interest rates and the possibility of a recession. “But not this year, because demand exceeds supply so much. For the economy to slow down, you’ll need to see a pull back in demand, and I don’t see that out there,” he says. A recession later this year or early next year is a real possibility—and it could prove to be a much bigger issue than inflation. “If you get into a recession, that’s when everyone pulls in their horns,” Geiger says. “Instead of substituting a product to meet a budget, your budget gets slashed or eliminated.” Geiger adds, “The economy to this point has been very buoyant in popping out of the COVID pandemic. But it could turn in three months, six months, next year. Anyone in business is mindful of what can happen, but at the moment we have other fish to fry—secure the goods, deliver them on time and keep customers happy.” Filipski is the former editor and director of publications at PPAI. Rising Inflation | FEATURE | JUNE 2022 | 23
Team & Spo r t s Un i f o rms by Danielle Renda INNOVATE 24 | MAY 2022 | Home Run Style Well-branded and good-looking team uniforms motivate players and stir excitement in fans—no curveballs here. At their most basic function, sports uniforms help fans to identify players. Without uniforms displaying a player’s name, respective team colors and logo, and jersey number if applicable, it would be impossible to understand what is happening on the field, court or rink, especially from a distance. But on a larger scale, sports jerseys represent the essence of a team, motivating players and creating a sense of unity. For fans, branded team clothing representing the team and bearing its logo and colors becomes sought-after merchandise they’re proud to wear. “When it comes to recognition of the team itself, the uniform is the most critical part of building that team comradery,” says Michael Brugger, president of Fully Promoted, powered by Proforma, a distributor in West Palm Beach, Florida. “When people are in uniforms, they tend to perform better
| JUNE 2022 | 25 INNOVATE than if they are in regular street clothes or something they provided themselves. It’s like when you put on a costume, you get into character. When you put on the uniform you get in that character and bring all the energy you need to win the game.” Some uniforms are so powerful that even non-fans recognize them. Take, for instance, the white and navy blue pinstriped uniforms worn by the New York Yankees; a jersey that’s hardly been updated since the team formed in 1903 and stands as one of the most-iconic of all time, topping every media site’s list of most-recognizable sports uniforms worldwide. Then there’s the slew of sports teams with signature colors whose uniforms make them easily recognizable, from the Los Angeles Chargers’ powder blue to the Denver Broncos’ orange crush look and the old creamsicle-colored jerseys of the Tampa Bay Buccaneers. And mirroring team colors are cheering fans wearing jerseys and other memorabilia to show their support. “A good uniform is one based on the area of the country, and also the colors of the team,” Brugger says. “Your players want to be able to feel good in that uniform and it’s easy from a distance to look at a uniform and say, ‘that looks good.’ “But what makes a good uniform is you want the players to feel great in that uniform. The way the fabrics feel, the types of uniforms they use and wear, when you’re talking to a client, it has to fit with that area. We work with a lot of traveling leagues, and these leagues may play in the Northeast, and they may also play in Florida, so [where your team travels] is an important question when you’re determining a uniform to fit with that team.” Brugger adds, “Speaking of that, it’s not uncommon that our player uniform will be slightly different for the fans, because when it comes to teams selling uniforms to them selling in the stands, it has to be something [fans] will want to buy and wear also.” The global sports market is projected to nearly double in size to $708 billion in 2026, up from $355 billion in 2021, according to the Sports Global Market Report 2022 published by The Business Research Company. What this boost in popularity means, in part, according to Allied Market Research, is that consumers are growing more health-conscious and thus becoming interested in fitness activities like team or individual sports. According to prepandemic data from the Centers for Disease Control and Prevention, nearly six in 10 (57%) high school students, or 8.6 million students, played at least one school or community sport in 2019. Likewise, in the same year, nearly onefifth of U.S. adults (19.3%) exercised or participated in sports or another active interest, according to the Bureau of Labor Statistics. “Know your client and what their needs are,” Brugger says. “If they want everything with personalization on the back, that’s a lot of detail, and that’s a fun project. There’s nothing more rewarding than going to the local event center and seeing all those uniforms you put on all those happy players, but you have to know what you’re doing ahead Branding Opportunities For Sports Teams Sporting events offer myriad opportunities for teams to be noticed and draw attention to supporting businesses, too. Different branding opportunities for team wear include: Uniforms for home games, away games and “other” team uniforms, such as those worn for professional photos, team ceremonies or meet-and-greets Branded team apparel for fans, such as t-shirts featuring the team name and jerseys just like those worn by the players themselves Opportunities for sponsors to have their logos featured on team uniforms; for recreational sports teams in particular, local businesses from autobody shops, to delis, landscaping businesses and everything in between can support teams and have their own branding featured, garnering more business for them and more local team support
Team & Spo r t s Un i f o rms sodesignby / jekson / gaga.vastard / FANDESIGN / AdresiaStock / Shutterstock.com 26 | JUNE 2022 | INNOVATE of time, because there are drop-dead dates that you can’t miss.” Sports jerseys and related memorabilia, like varsity jackets and tennis skirts, influence mainstream fashion and will continue to do so. But way before these trends hit the runway, the most important part of a uniform’s construction isn’t its customization, but its fabrication. Uniforms can’t enhance players’ performance, but they can support comfort with details such as moisturewicking and odor-repellent fabrics and finishes, and also their confidence. A hot trend in teamwear is the use of full-color uniforms—a style that Brugger describes as the standard in Europe and Australia, particularly with soccer, but one that’s starting to influence teams in the U.S. in a non-traditional way. “That, for me, is a trend that I didn’t see coming,” he says. But regardless of style, durability remains an ever-important marker when considering sports uniforms, and making sure the uniforms fit the right type of event. “You can’t just provide a regular shirt,” Brugger says. “For a sports player, it has to be something that’s going to survive running into another player, sliding into a plate, potentially getting kicked—all those things come into play, so the fabric has to be tough.” Front-Runner Finds Keep wearers warm during chilly, early-morning tennis sessions with the Women’s Generation. Also a great choice for golf teams, the full-zip jacket is made from polyester and spandex, and features a selffabric stand-up collar, hip pockets and dyed-to-match spandex, mesh underarm insets. Available in 23 colors, shown in black and mango. Antigua Group / PPAI 133110, S6 www.shop.antigua.com Your standard raglan tee with a unique detail that makes you look twice, the New Era Sueded Cotton Blend 3/4-Sleeve Baseball Raglan Tee features a rib-knit V-shaped inset at the neckline. Sueded for a soft hand, it’s available in five colors, shown in royal heather and white. SanMar / PPAI 110788, S16 www.sanmar.com A safe solution designed for movement and activity, and one that can be customized to suit any sports team, is the Adulting Value Wicking Crew Neck Tee. Available in unisex sizing, it’s made from 100% polyester that’s snag-proof and wrinkle-resistant, and also features moisture-wicking protection and stain release. Available in 13 colors, shown in kelly. BLUE GENERATION / PPAI 174655, S11 www.bluegeneration.com
| JUNE 2022 | 27 INNOVATE The lightweight, high-performance Cutter Jersey creates a flattering silhouette with contrast sleeves and side color blocks. Made from 100% polyester, it’s designed to be tucked in and stay that way with a longer length and features wicking pinhole mesh underarms. Available in 25 colors, shown in black and gold. Augusta Sportswear Brands / PPAI 187246, S5 www.augustasportswear.com Adorn players in a classic-style baseball jersey with a look that resembles the pros with the Short Sleeve Full Button Baseball Top. Pinpoint-stretch mesh made from polyester and spandex, the jersey is moisture-wicking, odor-resistant and releases stains easily. Available in 13 colors, shown in cardinal. A4 / PPAI 304796, S3 / www.a4.com The Running Singlet is a great way for runners to advertise their teams, causes they are running to support and sponsors. It’s available in complementary unisex and women’s styles; the unisex shirt, made from Ultrawick, has a loose fit, and the women’s shirt, made from polyester and Lycra, is fitted. Both styles feature a sponsor-friendly side panel. Hidden Bay Sports / PPAI 575019, S1 www.hiddenbaysports.com Give players and diehards something they can wear to support their team both on and off the field, with the Structured Solid Active Wear Cap. Made from polyester, the cap is moisturewicking and offers UV protection, and features a stretchable hookand-loop closure. Shown in navy. Cap America, Inc. / PPAI 111597, S10 www.capamerica.com No matter what the scoreboard reads, football players will be proud to show up in a custom Huddle Stretch Polyester Dazzle Jersey. The jersey features a full-length polyester mesh body with a mitered V-neck collar and a contrasting body, side and collar inserts. Available in 19 colors, shown in royal and white. Champro / PPAI 669316, S1 / www.shop.champrosports.com
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