Promotional Products Sales Report 2019 – Midwest

• Updated on: 2019-04-12
• Read original article here

It was about five years ago that Jim Nixson noticed the new houses along the bike paths that he frequented as an avid runner. The message was clear: His home area of Des Moines, IA, had put the ravages of 2008 behind it. Today, the Iowa capital is one of the fastest-growing Midwest cities, registering 13.4% population growth since 2010. “If I don’t travel to a part of town for six months, I’m almost amazed by what’s changed,” says Nixson, a resident of nearby Johnston, IA, and a senior account executive with The Vernon Company (asi/351700). “Des Moines isn’t a large city by any stretch of the imagination, but it’s amazing how much continues to get built up around here.”

Robb Fine, CEO of Fine Promotions, has seen similar growth in Indianapolis. Healthcare jobs have increased over 34% in the past decade, and the city has become “a hotbed for biotech” he says, with the city’s tech sector increasing by 68% in that same time frame – a higher rate than tech darlings Seattle and Denver.

Des Moines, IA, was named the fastest-growing city in the Midwest in 2017, and is among the dozens of mid-sized cities in the region that are growing quickly.

The image of the Midwest fading into Rust Belt-induced obscurity? “I get that,” says Fine, “but that’s the perception of being a rural area. … I think that’s a very old, outdated philosophy.”

Yes, the Midwest as a whole still has its struggles. Its annualized real GDP (1.7%) and population growth (1.9%) since 2010 lag behind the national averages.

But there are plenty of developments that encourage future optimism. Half the counties in the Midwest have gotten younger this decade; Indianapolis, Des Moines, Kansas City and Columbus are growing their millennial population faster than New York, Boston and San Francisco.

In addition, according to Bloomberg, 23 Midwest metropolitan areas are demonstrating population growth of 5.5% or better (which is the national rate); by comparison, the Northeast only has two.

Why are cities like Minneapolis-St. Paul (7.5% population growth), Columbus (9.3%), Lincoln, NE (9.7% population growth), and Fargo, ND (15.6%), all growing while Detroit and Cleveland continue to stagnate? It has to do with industrial heritage. “Almost all the comeback Midwestern cities were never strictly manufacturing burgs,” writes author and urbanism expert Joel Kotkin, “but rather state capitals, university towns, and trade and distribution centers.”

This means there are plenty of small and mid-size Midwest cities where distributors can thrive. Casey Glandt started Fargo-based Go Promo (asi/211824) in 2012, and just led his company past the $1 million barrier while also acquiring a local distributor in January. About 80% of Go Promo’s clientele hails from Fargo. The city’s business bonafides are real: unemployment is low and the startup scene is thriving. Microsoft’s second-largest field office is located in Fargo. Even the weather has gotten a bad rap. “The summers are really nice here,” Glandt says, adding that it’s only an hour’s drive to Minnesota’s lakes.

Click here for a larger image of the map above. 

Those pockets of growth – combined with the overall health of the economy and the robust standing of the promotional products industry – are spurring healthy spending from clients. Fine says sales in 2017 and 2018 were “amazing.”

“The only thing that held us back was inventory,” he says. Spending was more consistent, Fine found, and clients bought more of the products they needed and love.

Aubrey Cocklin, who started her new distributorship Mirror Promos this year after working the past 13 years with Consolidus (asi/166966), is also seeing healthy spending among clients, with a particular appetite for the retail brands coming into the industry. And even though there’s been much industry-wide talk of tariffs, “I haven’t seen that affect us at all,” says the Massillon, OH, resident. “I haven’t seen people buying less because of it.”

Another concern? Minimum wage increases. Five Midwest states (Ohio, Michigan, Missouri, Minnesota and South Dakota) are set to institute increases this year. Illinois isn’t one of them, but a series of wage increases are set to begin in 2020 that will reach $15 per hour by 2025.

It’s a discouraging sign in an otherwise positive experience for Michelle Bottino, who joined the promotional products industry in May last year when she purchased a Fully Promoted (asi/384000) store in St. Charles, IL. “I think that’s going to affect a lot of small businesses and our clientele,” she says, “and it makes me nervous.” 

“The retail brand and the retail look are becoming very popular,” says Aubrey Cocklin of Mirror Promos, “with things that don’t look like your typical promotional giveaway.” She credits the YETI craze for changing perceptions in the promo industry and making buyers more receptive to pricier name brands. Go Promo has also done well with brands like Carhartt, Under Armour and North Face. “Those are things that we pitch from the get-go,” says General Manager Casey Glandt.

Don’t confuse the Midwest for the rainy Pacific Northwest, but there’s still a need for umbrellas, and the innovative reversible umbrella (it quickly folds in on itself, sealing away the wetness) is going to be big this year, predicts Robb Fine of Fine Promotions. “Once you use it, you’ll see a difference immediately,” he says.

Wireless chargers, PopSockets, Bluetooth headphones – all are resonating big-time with buyers. Fully Promoted of St. Charles, IL, recently sold 7,000 web cam covers to select clients. “I thought it was a great place to brand your company because it’s right in front of the customer’s face constantly,” says owner Michelle Bottino. “It’s basically free space on a computer to put your brand.”

Illinois, Ohio, Michigan and Missouri all are in the Top 10 for having the most institutes of higher learning in America. “It astounds me what colleges and universities are doing now to reach out to their students to keep them engaged,” says Cocklin, who has worked with a number of education clients. T-shirts are still huge on campus “even if everyone is doing them.”

C.J. Mittica is the editor-in-chief of Advantages. Tweet: @CJ_Advantages. Contact: cmittica@asicentral.com