Promotional Product Market
What we see in the promotional products market by the numbers.
2 min read
The two main reason's I am looking to acquire companies in the promotional product industry is fragmentation and high repeat customer rate. Many of the owner's I have spoken to have said that their repeat customer rate has been around/over a staggering 80%. Here is a dive into the numbers side as to why I am looking to acquire companies in the industry.
Industry Fragmentation:
From 2022 to 2030, the global promotional products market is expected to grow at a compound annual growth rate (CAGR) of 7.6%.
Private equity investments in 2023 increased by 8.9% in the consumer products segment, which includes promotional items.
More than 30,000 distributors and 3,500 suppliers operate in the promotional products industry in the U.S. The majority of these businesses are small and independently owned indicating fragmentation.
According to the Advertising Specialty Institute (ASI), only 25% of the industry's revenue comes from the top 40 distributors, leaving thousands of smaller companies to control the market.
Due to the fragmented nature of the industry, merger and acquisition activity has increased. There was a 12% increase in private equity-backed deals to consolidate promotional products companies between 2019 and 2022.
Industry Numbers:
2020 20.5% decline in revenue in 2020, with total sales dropping to $19.6 billion, compared to $24.2 billion in 2019
2021 industry rebounded by 12%, with sales reaching $21.9 billion, up from $19.6 billion in 2020, but still significantly below the pre-pandemic level
2022 +13% (surpassed pre-pandemic levels)
2023 Expected steady growth, driven by market adaptation and consumer demand
Inflation and supply shortages have led to a 20-30% increase in the cost of many promotional items, according to industry suppliers in 2021
Supply chain delays still affect approximately 25-30% of suppliers.
Larger suppliers are able to deliver on-time shipping 98% of the time, whereas smaller suppliers have lower rates closer to the 85-90% range.
Labour turnover rates in 2023 are higher than pre-pandemic levels making production delays even worse.
In 2021, corporate events, which drive promotional product demand, saw a return of only 40-50%.
Promotional Products Industry in USA:
Market Size: $17.8Bn in 2023, a 0.3% increase.
Declined 1.1% per year on average between 2018-2023.
Factors affecting the industry are high competition and low barriers to entry
As of 2023, there were 6,266 promotional businesses
The workforce size is thought to be in excess of 98,000.
Customization and distribution of promotional products are the industry’s main revenue generators.
Promotional Products Industry in Canada:
Market Size: $2.5Bn in 2023, a 0.12% increase.
Majority of sales volume in Canadian promotional products industry is generated by companies with annual sales of more than $2.5 million.
Industry in Canada is thought to employ over 8000 employees.
As of 2023, there were 5,336 promotional businesses.
The biggest companies operating in this space are Proforma Inc, 4imprint Group and Staples Canada Inc.
Promotional Products Industry in the UK:
Market Size: $1.1Bn in 2023, a 0.4% increase.
Has grown at a CAGR of 1.9 % between 2018 and 2023.
As of 2023, there were 2,329 promotional businesses
24,000 Employees
The biggest companies operating in the Promotional Product Distribution market in United Kingdom are 4imprint Direct Ltd, Total Merchandise Ltd and Bensussen Deutsch & Associates Ltd (BDA Inc).
