TAKING THE PULSE ACROSS THE POND

SGR took PSI’s recent second-quarter state of the industry study and asked European suppliers and distributors to weigh in on the findings. Their view? Cautious optimism. By Sara Lavenduski

T

he Promotional Product Service Institute (PSI), based in Düsseldorf, Germany, recently released their state of the industry report for the second quarter of 2015, entitled “Industry Barometer 2/2015.” PSI studied 1,388 companies, both suppliers and distributors, across Europe. In early January, PSI held its annual three-day PSI Show in Düsseldorf, where the positivity was palpable, says Michael Freter, managing director of PSI. “After challenging years in the international markets, including severe drops, particularly in Western Europe, the tone at this year’s PSI Show was one of renewed, forward-looking optimism,” he explains. “PSI puts a human face on the market and gives a voice to the industry.” The PSI Industry Barometer, conducted annually by an independent market research firm, also reflects an

72 www.sgr-asi.com September/October 2015

optimistic outlook for the industry in Europe. “This snapshot of the current mood indicates that the markets in Western and Eastern Europe are catching up again with the German promotional products market,” says Freter. Because PSI is based in Germany and has a member base primarily comprised of German companies, this report is considered a sampling of the European market, with the caveat that findings largely reflect the state of the German promotional products industry.

Areas of Operation The supplier companies who participated in the study reported that 86% of sales were national while 14% were international. By contrast, distributors reported 46% national sales and 54% international. Albert van der Veen, CEO of Netherlands-based Xindao, suggests that these numbers accurately reflect the state of

selling in Europe. “Only a few Pan European suppliers sell across Europe,” he explains, “which is comprised of many different countries with different languages, currencies and VAT regimes. That makes it complicated to sell printed products. But the percentage of international sales for distributors is higher because they often deal with medium to large end-users which can be multinationals, and then enter contracts supplying those multinationals across Europe.” According to Sarah Penn, managing director at Outstanding Branding in London, distributors are now looking for ways to differentiate themselves from the influx of competition easily found on the Internet, by offering services such as warehousing, storage, fulfillment and e-commerce programs. “All of these programs are generating an increase in international sales by distributors in the UK and EMEA (Europe, the Middle East and

Africa) ,” says Penn. “Suppliers, however, particularly those operating on the traditional, trade-only route to market of selling via distributors, seem to focus on working with distributors local to them. This could be due to a variety of factors, including language barriers, time differences, tradition and the hassles involved in exporting.”

Sales Figures Suppliers and distributors reported that, in 2014, most sales were “low” (less than ¤1 million), as opposed to “moderate” (¤1 million to ¤9 million) or “high” (¤10 million to over ¤100 million). Sixty-five percent of distributors reported sales of less than ¤1 million; meanwhile, suppliers reported that 41% of sales in 2014 were “low,” a comparable 40% were “moderate” and 18% were “high.” As the country with the most participating companies, 40% of German distributors reported a “low” volume of sales in 2014, with 42% reporting “moderate” sales and 18% reporting “high” sales. “I think these reported numbers are accurate,” says van der Veen. “It’s also interesting to note that 52% of all distributors who participated (p.10) employ one to four people, so most are momand-pop companies. But I’m not anticipating a lot of new companies entering the market. Over the last 10 years, not many new-generation distributors have entered our industry.” Van der Veen also doubts that many companies will consolidate, particularly distributors. “The smaller ones mainly exist because of the relationship the owner has with the clients,” he says. “If the owner leaves after a consolidation, the company often loses value in the customers’ eyes. So distributors aren’t often bought by other distributors, unless the

owner stays for a little while.” For suppliers, says Van der Veen, the process to buy an entire supplier’s line often proves more difficult than buying the products as needed. “Almost every supplier is supplying the same product categories, so there is hardly any added value for them to consolidate unless they have their own brands,” he explains. “A supplier can do better buying the products for a certain category than to acquire that category.” Penn anticipates that increasing numbers of smaller “boutique-style” suppliers will join the industry. “Clients are increasingly looking for the new and innovative,” she explains, “and as the Internet allows for effective sourcing on a greater level than ever before, distributors can connect with these niche manufacturers to offer new product ranges to their clients.” She adds that, based on the PSI numbers, an increase in mergers isn’t likely. “There are always mergers,” she says, “but with such a high percentage of the market at less than ¤1 million in Ger-

many, it’s unlikely that there will be many takeovers that make a material difference to sales turnover.” Freter observes that almost 100 suppliers that exhibited at this year’s PSI were newcomers, startups and inventors. “Although there may be a consolidation over all in the upcoming years,” he says, “it’s a good indicator that we’re seeing young entrepreneurs entering the industry.” In a comparison of sales in the first quarter of 2014 to those in the first quarter of 2015, 43% of suppliers and 27% of distributors reported that sales had increased by 1% to 10%. Thirteen percent of suppliers and 31% of distributors reported a decline in Q1 year-overyear sales. “The business barometer resulting from this survey is clearly pointing upwards,” says Freter. “While 31% of distributors reported a decline, 55% reported a growth up to 50%, which is 7% more than the year before. And while

INDUSTRIES PREDOMINANTLY SUPPLIED Suppliers

Distributors

Tourism 18% Automotive

25% Tourism

19%

26% Retail

Retail 25%

26% Automotive

HIGHEST SALES POTENTIAL Suppliers

Distributors

Automotive 25%

Waste disposal 10%  & recycling

Tourism 26%

12% Tourism

Public institutions

15% Automotive

26%

2014 SALES IN GERMANY low: ‹ ¤1 mill. moderate: ¤1 to ¤9 mill. high: ¤1 to › ¤10 mill.

low: ‹ ¤1 mill. moderate: ¤1 to ¤9 mill. high: ¤1 to › ¤10 mill.

©PSI 2015

©PSI 2015

40% 0%

10%

20%

40% 30%

40%

50%

60%

70%

63%

18% 80%

90%

100%

0%

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30%

32% 40%

50%

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80%

5% 90%

100%

September/October 2015 www.sgr-asi.com 73

EUROPEAN STATE OF THE INDUSTRY 13% of suppliers reported a decline, 69% reported a growth up to 50%, a tremendous increase compared to last year.” Despite a drop in sales, particularly among distributors, van der Veen is also optimistic about the health of the industry in Europe. “The past five to six years have been difficult,” he says. “However, I definitely see a very positive sales growth for our industry. European economic signs are positive and we see that reflected in growth figures. After many years of end-users not investing in events and products for those events, they’re turning again to promotional products and gifts.”

2015 COMPARISON TO FIRST QUARTER OF PRIOR YEAR unchanged 0% increased by 1-10% increased by 11-20% increased by 21-50% increased by › 50%

43% 40% 35%

27%

30%

Green Matters

25%

17%

20%

16%

15%

9% =

2015 over 2014  3% 2%

5% 0% 0%

15%

9% 3% =



2015 over 2014 

5% 10%

8%

16%

10%

1%



15%

Meanwhile, Penn says she anticipates gradual changes coming down the pike for the promotional supply chain in Europe that may affect sales numbers. “I predict further muddying of the traditional supply chain,” she explains. “The Internet has made it very simple to compare prices and find more direct sources for supply, meaning traditional suppliers may find it costeffective to deal directly with end-users. Equally, distributors can be tempted to deal direct with factories in China or other manufacturing areas, cutting the traditional local manufacturer or stockist out of the equation.” However, lest distributors worry about their future in the industry, Penn explains that they will continue to offer value to clients. “In the UK and EMEA, distributors will draw on a range of suppliers and their respective expertise to continue to offer a value-added service,” Penn says. “Providing a professional, creative service to stable, profitable distributors must remain a priority for suppliers.”

3% 4% 10% 14% decreased by 1-10% decreased by 11-20% decreased by 21-50% decreased by › 50%

When asked about the importance of sustainable manufacturing and certification, 61% of suppliers stated that sustainably produced and certified imported products are “important” or “very important,” while a comparable 56% of distributors stated the same. Freter says the increasing consistency of company’s dedication to sustainability, coupled with consumer demand, accounts for the growing number of entities that consider sustainability to be important.

IMPORTANCE OF SUSTAINABLE MANUFACTURING AND CERTIFICATION Suppliers

PRODUCTS

Distributors

31% 30%

25%

28%

28%

20% 8%

10%

not important

7%

very important

74 www.sgr-asi.com September/October 2015

12%

not important

very important

“This is a wake-up call that’s becoming increasingly relevant in the industry,” he says. “The road is long and not always easy, but certainly viable. We have sustainability know-how within our industry, as we can see from the large number of individual certificates for companies and products based on a wide range of criteria. Added to this is an impressive number of individual initiatives and internal corporate quality criteria.” Penn suggests that the increasing interest in sustainability among UK companies may be due to the influence of the U.S., since many UK-based firms have head offices across the pond. “Another factor could be millennials’ increasing presence in the industry,” she explains. “Their aims, ambitions and accountabilities differ from those of the baby boomers or Gen-Xers, and they’re becoming more and more relevant and, indeed, prevalent. Those that don’t investigate and invest now in sustainability certification may find themselves left behind in the future.” Overall, there’s increasing awareness in Europe that all people, whether individuals or companies, can’t continue at the current consumption rate, says van der Veen. “We need to have a circular economy in order to reuse materials,” he says. “Our industry in particular has so many non-useful items that end up in the bin after one use. I wouldn’t be surprised if European governments eventually enforce laws banning environmentally unfriendly and useless promotional products.”

Vendor Relations When asked about the importance of a supplier’s presence on sales calls to endbuyers, 44% of suppliers said their presence was important or very important, while only 22% of distributors stated the same. Meanwhile, 33% of suppliers stated their presence was not important, while 55% of distributors said suppliers’ presence on sales calls is not important. Van der Veen says there’s a “very simple” explanation for the numbers: “Suppliers want to sit at the table to convince the end-user to take their item and not just depend on the distributor,” he

explains. “But the distributor is scared to bring the supplier because there’s a possibility the client will contact the supplier directly.” While protecting the company is of utmost importance, Penn says her company is more than happy to bring suppliers on sales calls. “That once-cherished secrecy of the supply chain is no longer tenable,” she says. “The Internet has made everything so transparent, that we can no longer assume our client couldn’t track down our supplier should they so wish. We have to add value to our offerings to differentiate ourselves.” Outstanding Branding, says Penn, also respects their suppliers’ role in the supply chain, particularly their expertise, product knowledge, time investment and support. “We’re fully aware that we have very little to offer our clients without them,” she adds. “More and more, our clients look for transparency in the supply chain, and they appreciate the abil-

SUPPLIERS PRESENT AT CUSTOMER TALKS Bringing the supplier to customer visits to act as a consultant is ...

39%

Suppliers

Distributors 27% 21%

23%

23% 17%

16%

12%

1

12%

2

3

4

5

not important.................................very important

ity to speak directly to our suppliers. So we feel that bringing them along adds a new dimension to the meeting. Once a supplier has demonstrated they share our company values, we’re proud to bring

1

2

3

4

10%

5

not important.................................very important

them to meet directly with our clients, knowing how much they can add to that relationship.” Sara Lavenduski is the assistant editor of SGR and its sister publications, Counselor, Advantages, Stitches and Wearables.

The Top 100 Distributors in Europe For the first time, PSI culled data on the largest distributor firms in Europe, and compiled a list of the top 100 – listed here alphabetically – based on available information on each company. DISTRIBUTOR . . . . . . . . . . . . . . . . LOCATION. . . . . . WEBSITE absatzplus - Agentur für Werbeartikel e.K. . . . . . . . . . . . . . . . . Germany . . . . . . . . www.absatzplus.com Active Promotion GmbH. . . . . . . . . Germany . . . . . . . . www.activepromotion.de ADM Promotions B.V. . . . . . . . . . . . . Netherlands. . . . . www.admpromotions.com admixx gmbh. . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.admixx.de admixx GmbH. . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.admixx.de Alann Mark’s Diffusion SARL. . . . . France. . . . . . . . . . . www.alann-marks.com Andreas Kümin AG. . . . . . . . . . . . . . . Switzerland . . . . . www.mcpaperland.ch ants & friends GmbH. . . . . . . . . . . . Germany . . . . . . . . www.antsandfriends.com art present . . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.artpresent.de Aydede Egitim ve Oyuncak. . . . . . . Turkey. . . . . . . . . . . www.aydede.com B&W Media Service. . . . . . . . . . . . . . Germany . . . . . . . . www.buw.com bAD & ADison GmbH. . . . . . . . . . . . . Germany . . . . . . . . www.bna.de Bartenbach Werbemittel GmbH & Co. KG. . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.service-bartenbach.de bb trading. . . . . . . . . . . . . . . . . . . . . . . Switzerland . . . . . www.bbtrading.ch Benson Paper Promotion Industry & Trade Inc.. . . . . . . . . . . . . Turkey. . . . . . . . . . . www.benson.com.tr Berendsohn AG. . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.berendsohn.com Bettmer GmbH. . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.bettmer.de Brand Addition GmbH . . . . . . . . . . . Germany . . . . . . . . www.brandaddition.com Brand Addition Ltd . . . . . . . . . . . . . . UK . . . . . . . . . . . . . . www.4imprint.co.uk Brandon AB . . . . . . . . . . . . . . . . . . . . . Sweden . . . . . . . . . www.brandoncompany.com CECOP S.A.. . . . . . . . . . . . . . . . . . . . . . France. . . . . . . . . . . www.cecop.com System e.K.. . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.ceka-team.de Columbus s.r.l.. . . . . . . . . . . . . . . . . . . Italy. . . . . . . . . . . . . www.columbuspromo.com Compacon B.V.. . . . . . . . . . . . . . . . . . . Netherlands. . . . . www.compacon.nl

DISTRIBUTOR . . . . . . . . . . . . . . . . LOCATION. . . . . . WEBSITE Company 4 Marketing . . . . . . . . . . . Germany . . . . . . . . www.company4.de Creativ Werbemittel GmbH . . . . . . Germany . . . . . . . . www.creativ-werbemittel.de CRIMEX GmbH. . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.en.crimex.com cyber-Wear Heidelberg GmbH. . . . Germany . . . . . . . . www.cyber-wear.de DGD Werbeartikel GmbH. . . . . . . . . Germany . . . . . . . . www.inspire-desire.de Die Jäger von Röckersbühl GmbH. . . . . . . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.die-jaeger.de Dowlis Corporate Solutions Ltd.. . . . . . . . . . . . . . . . . . . . UK . . . . . . . . . . . . . . www.dowlis.co.uk Ducksch Marketing . . . . . . . . . . . . . . Germany . . . . . . . . www.ducksch.de Eckert Werbeartikel AG . . . . . . . . . . Switzerland . . . . . www.eckert.ch EIDEX GmbH . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.eidex.de Élydis S.A.. . . . . . . . . . . . . . . . . . . . . . . France. . . . . . . . . . . www.elydis.fr Erich G. Döbler e.K.. . . . . . . . . . . . . . . Germany . . . . . . . . www.doebler-wa.de GEMACO GmbH. . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.gemaco-group.com/de Giffits GmbH. . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.giffits.de Gimel Hediyelik Esya Ltd Sti. . . . . . Turkey. . . . . . . . . . . www.gimelltd.com GK Handelsplan GmbH . . . . . . . . . . Germany . . . . . . . . www.gkhandelsplan.de Global Brand Concepts Gmbh. . . . Germany . . . . . . . . www.global-brand-concepts.com Gosh Norge AS. . . . . . . . . . . . . . . . . . . Norway. . . . . . . . . . www.gosh.no Griffity GmbH. . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.griffity.de Gutenberghaus Medienproduktions . . . . . . . . . . . . . . Germany . . . . . . . . . www.gutenberghaus.de Hagemann-Gruppe. . . . . . . . . . . . . . Germany . . . . . . . . www.hagemanngruppe.de Holfelder GmbH. . . . . . . . . . . . . . . . . Germany . . . . . . . . www.holfeldergmbh.de IDE House of Brands AS. . . . . . . . . . Norway. . . . . . . . . . www.idegroup.no IGO-POST Internationale . . . . . . . . Netherlands. . . . . www.igopost.nl September/October 2015 www.sgr-asi.com 75

EUROPEAN STATE OF THE INDUSTRY DISTRIBUTOR . . . . . . . . . . . . . . . . LOCATION. . . . . . WEBSITE Importexa S.A.. . . . . . . . . . . . . . . . . . . Switzerland . . . . . www.importexa.com Impress Media GmbH. . . . . . . . . . . . Germany . . . . . . . . www.impress-media.de JM Printing . . . . . . . . . . . . . . . . . . . . . . Denmark. . . . . . . . www.jm-printing.dk Jordenen S.A.. . . . . . . . . . . . . . . . . . . . France K+M Werbemittel GmbH. . . . . . . . . Germany . . . . . . . . www.rmwz.de Kandinsky Deutschland GmbH. . . Germany . . . . . . . . www.kandinsky.de Keiretsu Europe B.V.. . . . . . . . . . . . . . Netherlands. . . . . www.keiretsu-europe.nl kolibri GmbH . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.koli-bri.net Kretzschmar Promotion Service e.K.. . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.kretzschmar.de Lachmund GmbH. . . . . . . . . . . . . . . . Germany . . . . . . . . www.lachmund.com Lagardère S.A.. . . . . . . . . . . . . . . . . . . France. . . . . . . . . . . www.lagardere-france.com LIHA-WERBUNG. . . . . . . . . . . . . . . . . Germany . . . . . . . . www.liha-werbung.de Look! Werbeservice GmbH. . . . . . . Germany . . . . . . . . www.look-werbeservice.de Lucas Promotions Ltd. . . . . . . . . . . . Ireland LUKRATEAM Werbemittelagentur GmbH. . . . . . Germany . . . . . . . . www.lukrateam.de Mace Promotions. . . . . . . . . . . . . . . . Ireland . . . . . . . . . . www.macepromotions.ie Maxx Marketing Europe Limited. . . . . . . . . . . . . . . . . . . . . . . . . . UK . . . . . . . . . . . . . . www.maxxmarketing.com MITRACO GmbH. . . . . . . . . . . . . . . . . Austria. . . . . . . . . . www.mitraco.com Moll KONZEPT GmbH. . . . . . . . . . . . Germany . . . . . . . . www.moll-konzept.de MOLL PROMOTION. . . . . . . . . . . . . . Germany . . . . . . . . www.moll-promotion.de MULTIGATE Handelsgesellschaft mbH . . . . . . . Austria. . . . . . . . . . www.multigate.at obbo GmbH . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.obbo.de Orange Fish S.L.. . . . . . . . . . . . . . . . . Spain. . . . . . . . . . . . www.orange-fish.es Pandinavia AG. . . . . . . . . . . . . . . . . . . Switzerland . . . . . www.pandinavia.ch Paperipalvelu Koskimo ja Rännäli Oy. . . . . . . . . . . . . . . . . . . . . . . Finland. . . . . . . . . . www.paperipalvelu.com Pinkcube Werbeartikel UG . . . . . . . Germany . . . . . . . . www.pinkcube.de

DISTRIBUTOR . . . . . . . . . . . . . . . . LOCATION. . . . . . WEBSITE Plan Concept GmbH. . . . . . . . . . . . . Germany . . . . . . . . www.werbeartikel.tv präsent-service von Steinmetz GmbH. . . . . . . . . . . . . . . . Germany . . . . . . . . www.praesent-service.de PRESENT PERFECT GmbH. . . . . . . Germany . . . . . . . . www.present-perfect.de Promotica SRL. . . . . . . . . . . . . . . . . . Italy. . . . . . . . . . . . . www.promotica.it RATHERT CREATIV GMBH. . . . . . . . Germany . . . . . . . . www.rathert-creativ.de REDA a.s.. . . . . . . . . . . . . . . . . . . . . . . . Czech Republic . . . www.reda.info RHEINWALT Werbe- u. Handels GmbH . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.rheinwalt.eu Roy Schulz GmbH. . . . . . . . . . . . . . . . Germany . . . . . . . . www.royschulz.de Saalfrank. . . . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . www.saalfrank.de Schäfer Shop GmbH. . . . . . . . . . . . . Germany . . . . . . . . www.schaefer-shop.de Screenbolaget AB . . . . . . . . . . . . . . . Sweden . . . . . . . . . www.screenbolaget.se SND Verrerie de la Marne S.A.. . . . France. . . . . . . . . . . www.verreriedelamarne.fr Sobelpu SPRL. . . . . . . . . . . . . . . . . . . Belgium. . . . . . . . . www.sobelpu.be Solutions! Styling - Promotion Merchandising GmbH. . . . . . . . . . . . Germany . . . . . . . . www.solutions-m.de Source Gesellschaft für . . . . . . . . . . Germany . . . . . . . . www.source-werbeartikel.com Stratégie S.A.. . . . . . . . . . . . . . . . . . . . Belgium. . . . . . . . . www.aazio.com Strommes Reklame AS . . . . . . . . . . Norway. . . . . . . . . . www.strommes.no SUN-ACE COMPANY LTD. . . . . . . . . Japan . . . . . . . . . . . www.sun-ace.jp The Printed Image Ltd.. . . . . . . . . . . Ireland . . . . . . . . . . www.tpi.ie Top Line Profil AB. . . . . . . . . . . . . . . . Sweden . . . . . . . . . www.topline.se TOP Werbemittel GmbH. . . . . . . . . Germany . . . . . . . . www.top-werbemittel.de Trikora AG . . . . . . . . . . . . . . . . . . . . . . . Switzerland . . . . . www.trikora.com Van Bavel BVBA . . . . . . . . . . . . . . . . Belgium. . . . . . . . . www.vanbavel.be Vistaprint Schweiz GmbH. . . . . . . . Switzerland . . . . . www.vistaprint.com Wackes AB . . . . . . . . . . . . . . . . . . . . . . Sweden . . . . . . . . . www.wackes.se Würth Inter Werbung GmbH . . . . . Germany . . . . . . . . www.wuerth-interwerbung.de

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