East

Having dealt with societal and business restrictions for much of the pandemic, this region has opened up to thriving sales and an optimistic outlook.

Business in the Eastern states, from Maine to Virginia, saw a healthy increase in 2021, a trend that’s delivering a sigh of (cautious) relief to many promo firms. According to ASI data, promo sales across the East were up an average of 7.3% in 2021 compared to the prior year, with New Hampshire making the largest leap at 21.4%. Washington, D.C. was the only area reporting negative numbers with a 9.2% decrease (owing to the drop-off in PPE sales as well as it being a non-election year). With the restrictions lifted nationwide and buyers having moved beyond survival mode, distributors are generally optimistic, though many are still getting used to the new norms of business and dealing with lingering supply chain and staffing challenges.

Martin Rogers, owner of Brio Custom (asi/146019) in Rockland, ME, a popular coastal vacation destination, says his company's sales reflect the economic surge seen across Maine. With a 50/50 split between wearables and hard goods, Brio Custom is on track to do $1.5 million in revenue in 2022, up from $1 million in 2019. “Maine’s summer camps, restaurants and businesses that cater to tourists were still down in Q1 of 2021 because people were hesitant to make plans in an ever-changing environment,” says Rogers. “But after the governor lifted restrictions for Q2-Q4, tourists went gangbusters. It was really, really busy, and this year I anticipate even more visitors than before the pandemic.”

While sales are up, the company’s profits have been hindered by an increase in shipping issues and more customers who want drop-ship orders for virtual events and remote employees. “We’re still getting a handle on the fulfillment side of things with our current team at capacity,” says Rogers. “We used to do about three to four big drop-ship orders per year and last year we did 12-15 of them. Customers are spending the money on promos that they used to be dropping on venue costs, so it feels good to help with creative solutions for what’s needed.”

Pennsylvania has also seen a rise in its economy last year. Chris Murray, owner of Platform Industries (asi/528523) in Honesdale, PA, about 30 minutes from the New York border, has a majority of local and regional accounts, which has helped him to understand what his clients are facing. “In talking with other shops and seeing our own growth, it seems like the industry is strong right now,” Murray says. “We have a broad customer base and that really helped as restrictions were placed on different industries and types of events. Our eggs weren’t ever in one basket; we were able to pivot and not be hit too hard in one particular area.”

Murray’s approach to getting through the pandemic was to focus on excellent customer service, keeping morale high and taking every job seriously. “We had regular meetings to motivate people and let them know how the business was doing, so they weren’t nervous about whether they’d have a job in a week or two,” Murray says. “That went a long way and brought us all together as a team moving forward. We’re hurtling toward our goals for the year, and it's exciting for us and others in our industry to be coming out on the other end looking good.”

In the small town of Plainview, NY, about 20 miles east of NYC, Multi Media Promotions (asi/278058) is seeing huge leaps in its sales. Beth Levine, founder and managing partner of the woman-owned promo firm, describes business as “phenomenal” at the moment, with year-to-date sales doubling from 2021 to 2022. “We’re slammed, and currently our biggest challenge is hiring more people to keep up with demand,” Levine says. “We did almost 50% more business in 2021 than 2020, and I don’t see this swing going away anytime soon.”

The Multi Media Promotions team has prioritized client education, holding more meetings and presentations to ensure that their buyers know the depth and breadth of their capabilities, whether it’s in-house creative, sourcing, execution or company stores. They’ve also leaned deeper into big markets such as construction, providing utility signage, safety programs and employee recognition and awards. “The more we can get our clients to understand exactly what we do, the longer those relationships will last and we’ll grow together.”

In Virginia, Governor Glenn Youngkin in March rescinded the state’s original workplace safety regulations and the Virginia Occupational Safety and Health (VOSH) issued new COVID-19 General Guidance, a less restrictive set of protocols based on a finding proposed by the Virginia Department of Labor and Industry (DOLI).

Still, it’s not completely full speed ahead. Chris Rich, owner of Richmond, VA-based Rich’s Stitches (asi/307957), admits that her business isn’t so much affected by the current local guidelines as by lingering supply chain issues and customers not returning to full buying power quite yet. The custom embroidery and wearables business reports that sales are down 25% from pre-pandemic numbers. “Trying to find anything has been hard, so I’ve focused on selling only items that are in stock now,” Rich says. “We’ve had to be real with our customers, as the textile and fabric supply chain is still facing massive hold ups, but we’re hanging tough, being positive about what we can do and transparent about what we can’t do.”

After 34 years in business, Rich admits this is the “last leg” of her business life, though she has no expectations that this dip will be the final note in a long career.

Midwest

Guarded optimism keeps this region level-headed even with an abundance of encouraging signs.

There’s a term often associated with the down-to-earth, sensible vibe that characterizes life in middle America: Midwestern pragmatism.

Indeed, words like “practical” and “grounded” are frequently assigned to both the region and its residents, suggesting the nation’s heartland relies on battle-tested formulas, approaches hype with skepticism and firmly understands what goes up must come down. Nothing, after all, stays golden forever, a reality Midwesterners know all too well when winter unleashes its annual wrath on the landscape.

According to ASI data, promo sales in the Midwest jumped 9% in 2021 over 2020 as seven of the region’s dozen states recorded double-digit gains. And still, despite those encouraging signs, it should come as no surprise that promo distributors in the Midwest are simultaneously optimistic and guarded, energized by the present, yet cautious about what might lie ahead.

Darrell McChesney, vice president of sales for Team Iowa, reports strong results at his Cedar Rapids, IA-based firm. He says clients are planning events and buying. “People are upbeat and positive,” says McChesney, a 26-year veteran of the promotional products world. “Though that naturally leads to concern about when things will change.”

There it is: Midwestern pragmatism in action.

To be certain, the Midwest has much to celebrate.

Unemployment rates in Midwestern states are among the lowest in the land, according to May data from the U.S. Bureau of Labor Statistics. Indiana, Minnesota, the Dakotas, Oklahoma, Kansas and Wisconsin all have unemployment rates well below the national average of 3.6%, while Nebraska boasts the nation’s lowest unemployment rate at 1.9%.

Economic activity is swirling, spurred by essential businesses like agriculture and manufacturing that keep running. For instance, Sabetha, KS, the town Scoby Bros. (asi/321414) calls home, is known as the “pet food capital of the world.”

“Sabetha might be a small town without a stoplight, but it’s moving constantly,” says Scoby Bros. President Luke Scoby.

A relatively healthy economic environment has sparked promotional products sales and a willingness to invest in more quality product from categories like drinkware and apparel. “I can’t remember the last time I did a basic cotton tee,” Scoby says.

Bryan Goltzman, co-owner of Liquid Screen Design (asi/254663), which has a home office in Minneapolis, a fulfillment center in suburban Chicago and a remote workforce, calls current business robust. “It’s a catchall word, but it’s true,” Goltzman says. “Orders are up and new customers are up.”

Things have been going great for Michelle Monhollen and Robert Steffek, co-owners of Ohio-based Fully Promoted Centerville (asi/384744). “Buyers are buying and events are coming back. So people are excited,” says Monhollen. “They’re also really focusing on employee appreciation. And I feel that small businesses are trying to increase their exposure in branding.” The duo, former colleagues and industry veterans who bought a former EmbroidMe franchise location and reopened in April 2021, are doing extremely well in manufacturing along with finance and education, and are up 26% year over year from April to June this year. “We feel strong, we’re on track and we have an aggressive 2022 sales goal,” Steffek says, “and we’re confident that we’re going to meet and probably exceed that goal if our trend continues.”

But like the rest of the U.S., the Midwest is confronting national economic issues that threaten confidence and business momentum.

The ongoing Russia-Ukraine conflict is hampering imports of key commodities like grain and gas. While all of America needs its grain and gas, the Midwest especially needs those commodities given its heavy agricultural bent. Soaring inflation, meanwhile, is testing wallets and optimism.

In the rural communities that blanket the Midwest, residents must often drive further distances to work, stores and schools. Gas over $4 a gallon can weigh on households and businesses, Scoby says, while a $700 bill to fill up a tractor is a tough pill to swallow on the farm.

And, of course, supply chain issues remain a massive challenge, impacting daily life as well as promotional products sales. McChesney says he’s already talking with clients about the 2022 holiday season, encouraging them to get a jump on orders so they’re not chasing inventory or hammered with higher costs.

In managing expectations and combatting the chaos supply chain problems and inflation deliver, Goltzman finds himself regularly leaning into a treasured Midwestern value: being a steady, trustworthy partner committed to finding a mutually beneficial solution. “Approaching sales as the stereotypical used car salesman is never going to work in the Midwest – people see right through that,” Goltzman says. “Here, it’s all about relationships. Every problem is one to solve together, not every man for himself.”

The hope, of course, is that the Midwest is better insulated from the pounding of macroeconomic tensions than its coastal brethren. Much like the movement of fashion or cultural trends, the nation’s larger economic problems, too, often start on the coasts and work their way into the middle. By the time something lands in the heartland, McChesney says the problem has either calmed or there’s progress toward a solution.

“Labor and inflation challenges exist here, there’s no doubt about that, but it’s not to the extremes we’re hearing about on the coasts,” McChesney says.

Even so, distributors are bracing for a potentially bumpy ride throughout 2022 and into 2023. After recording five consecutive years of considerable growth at Scoby Bros., Scoby simply hopes to see 2022’s numbers match 2021.

“Consistent,” he says. Spoken like a true Midwestern.

South

Soaring sales means this powerhouse region is right back where it belongs.

It’s a been a great year for promo in the south, y’all. Every state has seen an increase in promo sales revenue, ranging from a 3% boost in Louisiana to a 22% rise in Tennessee. Distributors are feeling it too.

“Our business is up over 40% right now,” says Chad Hamlin, president of Little Rock, AR-based Southern Branding. “I can’t speak for other states, but the growth in Arkansas with companies moving here and some industries that are really growing here is full speed ahead.”

Laura Coffee, project manager at Atlanta-based Tucker Castleberry (asi/347701), agrees with Hamlin. She says business is definitely up, and customers will ask for one thing and then suddenly remember they wanted four other things, too. “It’s definitely changed,” she says of customer sentiment in the last year.

Events are booming, too, creating the need for more promo items. Missy Embry, president of Tulsa, OK-based MSE & Co. (asi/278173), says that the recent PGA Championship at Southern Hills Country Club in Tulsa was huge. “They probably did $2 million a day in the merch tent alone,” she says. Tulsa’s Wine Experience fundraiser was also a major hit.

Fundraisers are big business in the South right now, and distributors are winning business by helping organizers navigate all the logistical hurdles of securing promo products in time for events. And even if your city doesn’t have a PGA event, golf and the related products – think hats, golf club covers, towels – are selling like crazy throughout the region. Sports in general is huge – college football for sure, but winter sports are on schools’ minds as well. These are all huge opportunities in the South, so if you aren’t a licensed supplier with a school, now’s the time to do some outreach.

That doesn’t mean everything is perfect, though. Supply chain issues and inflation are taking a bit of a toll.

Sharon Lynn Unger, director of branding and design for Jacksonville, FL-based Wicked Branding & Graphix (asi/359902), notes that gas prices in particular are a big deterrent for some companies that would typically be buying branded items. “With the rise in inflation, people aren’t spending money on the stuff they used to,” she says. “Instead of buying shirts for their employees, smaller businesses are putting gas in their company vehicles.” She does note that larger national corporations and businesses in the construction and hospital industries are still buying pretty regularly, but “everyone is pinching their pennies.”

Hamlin has seen those price increases as well, including ones that affect his business in particular. Apparel sales are booming – but so are the prices for items because the supply chain can’t keep up. “I think we’ve had at least four price increases with two suppliers, and it’s across the board,” he says. “There are concerns with raw material and price. I don’t know if that’s ever going to come back down. We all hope there will be some price drops.”

Like many people in the industry, Hamlin initially expected the supply chain woes to resolve by now. But given where things stand currently – with brands like Nike and Under Armor still being way below normal on inventory – he doesn’t think it’s going to be any better next year either.

Coffee agrees. “There are so many items out of stock and no one has any idea when they’ll be back, and that’s a big concern,” she says. “We don’t want to people to not order, but if we can’t provide it… Sometimes they’re OK with substitutions, but not if they want a Nike polo. There are none.”

Embry has had to add a layer of detective work into her sales because everyone is either out of stock or behind on orders. She’ll look at turnaround time and then double check with the company to make sure that’s actually correct. With some suppliers advertising specific timeframes, she says, they’ll tell her, “Production is 72 hours but we’re behind in our order entry, so we need 24 to 48 hours, and then 72 hours.” The additional level of research is “the extra step I have to go through now,” she adds.

Ultimately, though, regardless of the economy-based struggles, everyone seems to be optimistic about where the market is heading over the next year. “Be excited because there’s more business than someone can handle,” Embry says. Coffee sees it too, noting “the customers seem excited about getting stuff. They’re excited about ordering it and I don’t see that changing. It’s only going to get better.”

Just make sure you’re keeping the supply chain in mind to keep your business where it needs to be, Hamlin says.

“Business is strong,” he says. “I don’t think it’s going to go down the tubes tomorrow. Obviously, you need to be out there and get it while you can. Our solution to that is get out in front of it. You better be talking about Christmas in August instead of waiting until November. Just think through it, understand your customers and their needs, and plan ahead.”

West

Even with pockets of booming business, distributors in this region are trying not to get ahead of themselves.

For the westernmost states of the nation, the biz is back – with some caveats. While housing and tech are experiencing growth, others (such as beef) are facing slowdowns. The return of in-person events is partly driving demand, and distributors in these states say they’re grateful to be busy again, but still watching closely for what the rest of the year could bring.

Kate Ivory, president of GIDI Promotions in Portland, OR, says many of her clients do events, so it was a rough couple of years. Along with the healthcare and school sectors, those in the conference business are coming back quietly she says, and so far she’s having her best year ever. “We’re getting unusually large orders – double the size of 2019,” Ivory says. “It could be a panic buy, a pent-up feeling.”

Things are good in Montana, which boasted the second-highest promo sales increase in 2021 at 25%. One simple reason: The San Francisco Chronicle has reported that over 13,000 people from California alone have moved to Montana since the beginning of the pandemic. Hans Abbey has noticed. The owner of Purple Snow Promotional (asi/522833) in Billings, MT, says he anticipates a good year, despite what he’s seeing regarding meat prices. Ranchers have started to do a lot of their own meat processing and selling direct, Abbey says, which has created business opportunities: “I’m doing a lot of coolers for them,” he says, “but at the same time, you’ve got a drought that’s gonna hurt the farmers, so it’s kind of a toss between the two.”

Another fast-growing state is Idaho – the fastest, in fact, according to the Census Bureau. It also had the greatest promo sales surge in 2021 at 29%. Boise and Nampa grew by 26%.

Three and a half hours east in small Pocatello, ID, (population 56,000), the picture is a bit more nuanced for David Pollard, partner at Tee Pee Advertising Co. His business is up “quite a bit,” he says. Local credit unions, banks, schools and team uniforms are all sectors in which he’s done more business since COVID has waned.

Still, Pollard notes there are no large industries in the area, and those that were have been swallowed up by larger companies based elsewhere. “Add inflation to that, which we’re all suffering through, and it’s been really tough times for Idaho,” he says. He adds: “The economy is pretty good at the moment, but we’re worried where we’re headed, whether the bubble is going to burst.”

To the South, Utah is another booming western locale. Renya Nelson, CEO of Brand Aid (asi/145193) in Salt Lake City, says the general sentiment of buyers in the state is strong. “We’ve seen an enormous uptick in our local clientele in the past few years,” she says, “where previously our highest-grossing accounts were in Los Angeles and New York City.” Utah has become a startup hub for many tech companies and is in the process of building an inland port, which Nelson believes will significantly increase trade in the state.

Arizona is campaigning hard for its share of big tech dollars as well. Early indications say it’s working: Both Intel and Meta (parent company of Facebook) are expanding into the state. “Our market is thriving,” says Michele Cochran, owner of Six Twenty Six (asi/466916), in Scottsdale, AZ. “We’ve had growth coming through the roof.” Cochran’s top clients are large conglomerates like SAP, Clorox and Ping Manufacturing, maker of golf clubs. “Golf never suffered,” she adds.

Like the country as a whole, the western U.S. is dealing with a labor shortage – which means ongoing limitations for what distributors and suppliers can get at a time when companies are ready to buy again.

“Now the problem is, I call these suppliers and they don’t have what I need, especially in apparel,” Pollard says. “Finding certain colors of T-shirts is just impossible.” Even if companies have the raw materials, getting stuff made is tough, he adds. “So we have to be creative, sometimes go with kooky colors,” he says.

Anna-Claire Eakin, CEO of Imagine Promotional Group (asi/605998) in Petaluma, CA, is communicating these issues to clients regularly, sometimes even encouraging them to warehouse merchandise way ahead of time. “Everyone reads the same headlines,” she says. “If you want it, order it now.”

Eakin says that while her business – much of which is comprised of tech companies – started with a solid first quarter this year, “I think we’re back to 2008 when we saw our clients releasing their marketing dollars by quarter in kind of a wait-and-see process.” Amid a pandemic, politics and war, clients are holding their breath to see what the world is going to bring before freely spending their marketing dollars, she adds.

Ivory says she’s watching China, whose on-again, off-again COVID lockdowns are making the fourth quarter look “a little scary” even as she points out that the supply of select top apparel suppliers has gotten significantly better. Sharing Pollard’s sentiment, Ivory says the latest headaches are all production related. “We don’t have the people to get inventory out the door,” she explains. “That seems to be the discussion right now: ‘Where did all the workers go?’ ”

The hits might keep on coming, Ivory says, noting that just when suppliers started getting stock, China closed down yet again. “As a company, we’re talking to customers about that,” Ivory says, “then there’s the constant chatter now about a recession. And we still work three times as hard for the same dollar that we did in 2019.”

Marijuana became legal on January 1 of this year in Montana, so Abbey is doing lots of “exit bags” for dispensaries — childproof bags in which products must be sealed after purchase. “Each store sells them for $2 apiece, so they actually make money on them,” he says.

The cannabis shops are also buying T-shirts, caps and beanies again, he notes, and cannabis grinders are also strong for him. “They love to use color,” he says. “They’ll do six to nine colors on it.” Many dispensaries essentially have branded stores within their stores, he says: “Because they can’t advertise on radio, TV or other traditional media, promotional products are where they’re spending that money.”

Cochran says she’s mostly doing new business these days, as “so many budgets were cut from my former clients.” But now that people are hiring again, they’re tapping Cochran to do hiring packets.

Ivory is seeing an increased number of construction and development companies doing business with her, as well as offshoot healthcare companies like urgent care and medical support companies. “Tremendous growth,” she says. “Tech that supports the medical industry is also growing by leaps and bounds.”