Jason Grenham said he’s had more interactions with U.S. distributors this year, by far, than he has any other year during his decades in the industry.

Grenham is sales director at Sourcing City, a promo association based in the United Kingdom. He says U.S. distributors have been reaching out for everything from forming connections with new suppliers to seeking partnerships with U.K.-based companies.

“I think it makes a far more global industry and actually makes us understand a bit more of what’s required from distributors in the U.S. and from around the world, not just very insular with what we need here in the U.K.,” Grenham shared at the latest quarterly webinar from PromoAlliance, the strategic partnership between ASI in the United States, PSI in the European Union and Sourcing City in the U.K.

The alliance acts with a unified commitment to promote networking and a sharing of industry knowledge and data on a global level.

Closing out 2024, this quarter’s discussion, moderated by Michele Bell, ASI’s senior vice president of content and global alliances, also featured Viola Proietti, membership product manager at PSI. They looked back on how the industry fared this year and what’s to come in 2025.

Election Aftermath

Despite an optimistic outlook and a strong start to 2024, the second half of the year – and especially the fourth quarter – has been slow on both sides of the Atlantic. There’s been a good bit of economic uncertainty in both the U.S. and Europe, thanks in no small part to elections that have shaken up the political landscape.

Elections in the U.K. over the summer resulted in a new party in power for the first time in over a decade. With the new administration’s budget released in October and inflation up slightly to end the year, the past six months have been flat, said Grenham.

Germany, the E.U.’s largest merch market, is in a similar boat. There’s been stagnation to close out the year, said Proietti, and questions on the horizon with new elections for the country set for February.

“I think from a business perspective, it’s a case of ‘wait and see’ into the early part of next year to see how that pans out for business,” Grenham said.

Fears surrounding a tumultuous U.S. election cycle also had a big impact on the wider economy and on promo spending this year. End-buyers kept tight budgets amid rising inflation as they braced for a recession, Bell said, and even though that recession never fully materialized – and even now that the dust has settled – people in the industry were anxious.

“It’s a case of ‘wait and see’ into the early part of next year to see how that pans out for business.” Jason Grenham, Sourcing City

Thanks to that, she predicted a 2024 that’s level with or about a percent up from the $26.1 billion sales figure the U.S. promo market reached last year.

“I think a lot of people in the U.S. – suppliers and distributors – were surprised by how sluggish their business was, and kept expecting, in the second half of the year, things to pick up because the election was over, because of the holidays,” Bell said. “And it’s really been slower than people thought.”

Increasing International Interest

Bell said that a promo veteran told her recently that the U.S. promo industry is “tariff-ied” about what’s to come for international product imports when President-elect Donald Trump takes office in January.

With Trump promising “day one” tariffs on goods from China and other nations since the election – and with tariffs as a key point during his campaign and his previous presidential term – Bell expects distributors of all sizes may be looking to diversify their sourcing in the new year to avoid potential impacts.

That likely explains why Grenham has seen more outreach from U.S. distributors so far this year. The international market has previously been focused on the largest distributors in the industry, who are big enough to have offices overseas. Now, there’s more interest coming from other companies, who may be able to partner with established European firms to expand their international presence.

“It’s the midsized distributors that I’m starting to see really focusing on the European and U.K. market because they want other options,” Bell said.

Historically, Proietti said, PSI has gotten feedback that it’s easier for U.S.-based distributors to import directly from China to the U.S., rather than going through European suppliers who sourced from China, for example. Nearly 90% of U.S.-based suppliers sourced products from China last year, according to ASI’s annual State of the Industry report.

“It’s the midsized distributors that I’m starting to see really focusing on the European and U.K. market because they want other options.”Michele Bell, ASI

There are plenty of German distributors who also source from China, Proietti said, but the figure isn’t nearly that high.

Last year, a lot of distributors in PSI’s network were explicitly asking for products made in Germany or the E.U. Turkey is a huge source of textiles, Proietti said. Grenham said the U.K. imports a substantial amount from India, though that’s another nation potentially affected by Trump’s coming tariffs.

“What is coming up in politics might deliver different ways of cooperation,” Proietti said.

Industry Trends for 2025

Grenham, Proietti and Bell all foresee the continuation of the vast number of mergers and acquisitions that have rocked the promo industry this year, particularly on a global scale – whether that’s larger companies purchasing smaller ones, or American companies looking “across the pond,” said Bell, to potentially acquire European distributorships and expand their international footprints.

Another continuation? On the product level, Grenham predicts sustainability will still be king moving into the new year.

In Europe, where environmental regulations and standards are much more stringent than they are in the U.S., many suppliers have already hit sustainability milestones or added levels of transparency to their products.

“It’s much more than just the product itself. It’s the added value.”Viola Proietti, PSI

Looming over the horizon for the E.U. market are regulations around “digital product passports,” said Grenham. When it goes into effect a few years down the line – 2027 for the E.U. and 2030 for the U.K – companies will be required to provide the end-user with complete information about the origin of a product. There’s demand across the board for traceability in where products come from, how they’re packaged and how they’re produced, said Proietti.

And that goes cross-continental. U.S. end-buyers are asking for the same things, distributors tell Bell. People want to know what’s behind the products that they’re buying – and that adds something to the product experience.

“It’s much more than just the product itself,” Proietti said. “It’s the added value.”

Trade shows from all three associations are set to kick off 2025 for the industry; ASI’s first show of the year runs Jan. 4-6 in Orlando, Florida; PSI’s event is Jan. 7-9 in Düsseldorf, Germany; and Merchandise World will be held Jan. 22-23 in Coventry, England.

The first shows of the year are a key way to gauge how the first half of the new year will look, said Bell. All three have a high number of new suppliers, panelists shared, and the increased international interest will hopefully be a sign of good momentum ahead, Grenham said.

“It’s always mesmerizing,” Proietti said, “how many people come over to see and meet and greet and source for new trends and products.”

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