The Advertising Specialty Institute (ASI) has published its 48th annual Counselor State of the Industry report, providing a comprehensive analysis of the promotional products sector in 2025. This edition highlights the challenges companies face, including supply chain disruptions, increased tariffs, and rising cybersecurity threats. Despite experiencing average sales declines of 3.6% in the first quarter and 3.2% in the second, many firms are implementing strategies to adapt.
Key Findings and Strategic Responses
A significant finding from the report indicates that approximately 70% of suppliers raised prices in the second quarter to counteract the impact of import taxes. This adjustment comes as manufacturers and distributors navigate a complex market landscape. In response to the shifting dynamics, 46% of distributors now provide company stores, a notable increase from the previous year. This move underscores a growing trend towards customized promotional solutions.
The report also emphasizes a marked shift towards U.S. sourcing, as demand for American-made promotional products rises among businesses aiming to lessen their reliance on Chinese imports. This trend reflects a broader effort to enhance supply chain resilience amid global uncertainties.
Cybersecurity continues to be a pressing concern within the industry. The report reveals that 40% of leading promotional firms reported experiencing cyberattacks, with ransomware highlighted as a particular threat anticipated in 2026. To address these vulnerabilities, companies are prioritizing cybersecurity measures.
Another area of innovation is the integration of artificial intelligence. Distributors are exploring AI technologies to optimize operations, although challenges around implementation persist. This experimentation reflects a broader industry trend towards leveraging technology for efficiency.
The Impact of Market Consolidation
The report also notes ongoing consolidation within the industry, with private equity activity shaping market dynamics. A key example is S&S Activewear’s acquisition of alphabroder, which signifies a shift in market power and resources.
Timothy M. Andrews, President and CEO of ASI, stated, “This year’s data shows an industry moving forward through innovation, resilience, and smart strategy.” He emphasized that the report offers valuable insights and tools for promotional businesses to strengthen their operations, especially during challenging times.
For the first time, the report compares revenue and stock performance among the Counselor Top 40 companies based on their ownership structure—public, private equity-backed, and privately held. This analysis provides fresh perspectives on how different leadership models influence business outcomes. Nate Kucsma, ASI’s Senior Executive Director of Research, remarked, “The 2025 State of the Industry provides the benchmarking data every promo business needs to make smarter decisions in a rapidly evolving market.”
The insights from ASI’s report underscore the importance of adaptability and strategic foresight in navigating the complexities of the promotional products industry. Businesses looking to thrive will need to embrace innovation while managing the risks that come with a changing global landscape.
