 Welcome to the first installment of ASI's new e-newsletter specifically for the Canadian ad specialty marketplace. This newsletter came about as a joint effort between my colleagues Jay Ostrow, executive director of ASI Canada; Fred Oesen, executive management consultant for ASI Canada, and I, to give ad specialty professionals in the Canadian marketplace a news venue specifically for you.
With national news pertaining to you and industry updates crafted just for the Canadian promotional landscape, we want this e-newsletter to be your resource – as a professional in the Canadian ad specialty industry – to keep you informed and up-to-date on news affecting your business.
Please don't hesitate to e-mail me directly with any news pertaining to your company, such as mergers and acquisitions, new hires, awards and accolades received, creative client promotions or new product launches. You can reach me directly at (215) 953-3323 or mbell@asicentral.com.
First-Quarter Pulse Check on the Canadian Ad Specialty Marketplace
As the first-quarter selling season is nearly complete, we've taken a look at some companies within the Canadian ad specialty marketplace to gauge how their sales, and the industry overall, are faring. To put it in context, a recent survey by ASI has North American companies projecting 11.2% growth in 2011. Read on for views on the state of the Canadian industry from a sampling of industry practitioners.
 "We're doing great and business continues to grow as we seem to seek new opportunities every day over and above what we have currently from our existing clients," says Raman Agarwal, president/CEO of the Ottawa-based distributor Akran Marketing (asi/115329), whose sales have increased 25% from this time last year. Agarwal believes that buyers' budgets are loosening, with some sectors like retail, health and corporate spending expanding more than others. "We notice order sizes are increasing, as clients are always looking for something unique, inexpensive and unisex to give away," he says.
Pete Kmech, president of Edmonton-based distributor Brand Alliance (asi/170480), says his company's numbers are up approximately 20% this year from its business unit in Edmonton, but that based on the entire company's growth, numbers are up approximately 40%. "Some of our other business units have experienced greater gains in revenue as a result of more program clients," says Kmech. "These program clients haven't reduced spending in comparison to custom business. There's evidence that this is the area we want to continue to grow in to support recession-proof business. We are predicting a 10%-15% growth in the Canadian ad specialty marketplace, but our own company is striving to finish our year off with a 25% growth rate."
Kmech also believes that clients are more apt to buy ad specialties for their promotions than they were last year. "Spending has definitely increased," he says. "However, purchasers are shopping more and investing more time in assessing value. We need to both sharpen our pencils and ensure that we create more benefits, such as marketing expertise and customer support, and provide more options or better selection."
Overall, ad specialty distributors in Canada say that order size is increasing slightly, but clients are ordering only what they need. "Clients are much more are open to reordering as opposed to stocking, if the product is successful in achieving its goal," says Kmech. "Storing less merchandise is a priority, except for larger program clients, once again."
Brian Hillhouse, national sales manager for Richmond-based supplier Swedatron Ltd. (asi/90344), now PSL Canada Ltd., says his company has had a very successful start to 2011. "Sales are triple at this time compared to 2010," he maintains. "It seems that the worse may be over after the 2009/2010 financial crisis that affected all of us in this industry. Overall we are very optimistic about our growth and the industry as a whole in 2011."
Brian Starke, co-owner of Toronto-based supplier Bravo Awards (asi/41638) reports that "business is booming – we were up 46% in 2010 over 2009, and in January of this year, we were up 80% over 2010."
Brad Wood, president of St. Leonard-based supplier Payge International (asi/76567), says the first quarter of 2011 is showing a modest increase in sales over 2010, but his sales numbers are still far off 2006/2007 levels. "We do find more optimism in the marketplace at present, which we hope will translate into an increase in activity and sales, but are also aware how fragile current business confidence is," Wood says. "Our feeling is that it is not a matter of 'if' the marketplace will normalize, but 'when' it will normalize, and given the severity of the economic downturn it could take a long time."
Wood also points to raw-material cost increase due to the situation in Libya as a concern in the immediate future. "Oil is a major component in the cost of plastic, and the eventual outcome in the Middle East is far from clear," he says.
Few people, though, have their pulse on economic indicators and market forces overseas like Garry Hurvitz, CEO of Counselor Top 40 supplier Ash City (asi/37143), based in Ontario, who spends upwards of 18 weeks each year in Asia.
"Sourcing in Asia will continue to be a major issue for most Canadian suppliers," Hurvitz says. "With cotton prices escalating out of control and oil prices peaking due to the political volatility of the marketplace, the cost of apparel is only going to increase. Higher costs combined with fewer factories able to survive the economic downturn in Asia means higher prices for customers and the potential for inventory shortages on product. The suppliers with the strongest relationships overseas will be sure to reap the benefits in 2011."
Hurvitz maintains that while the immediate economic outlook for Canada would appear to be better than that of the U.S., the overall marketplace is growing at a very moderate rate. "End-buyers have not yet been allocating budgets like those from the past, leaving 'value purchasing' as the primary focus for most companies," he says.
PromoShop Opens Offices in Canada
With the intent of expanding its interests into the Canadian marketplace, Counselor Top 40 distributor PromoShop (asi/300446) has opened two offices in Ontario - one in Toronto and one in Windsor - to be overseen by Phil Duym, the company's executive vice president.
"I've known the people at PromoShop for a very long time and have always loved what they do and what they're all about," Duym says. "Everything they do is cool, unique and fun for their clients and their employees. My initial goal is to spread the word and tell the story of how this once-upon-a-time merchandise marketing company from surf city California has grown not only across the U.S. but into the Great White North in less than 13 years. Sharing the enthusiasm and love for PromoShop will help us attract the right clients and employees looking to be a part of something very special on both sides of the border."
Memo Kahan, owner and president of PromoShop. says the company's entrance into the Canadian marketplace offers great opportunities for the company. "We've done our research and are confident there are synergies with what we currently do that will make our presence in Canada a great success," he says. "And the addition of Phil Dyum to the PromoShop family is a great achievement for our organization, as he brings a level of expertise which will make us a better company."
PromoShop is headquartered in Los Angeles, and in addition to the two Canadian locations, has offices in: Sacramento, San Francisco, San Jose, Encino, Irvine and San Diego, CA; Seattle and Spokane, WA; Boise, ID; Boulder, CO; Dallas and Austin, TX; plus Detroit, Miami, New York City and Boston. The company's most recent sales figures, as reported in the 2010 Counselor State of the Industry, were $23.2 million.
For more information, contact Phil Duym at pduym@promoshopinc.com.
Talbot Marketing Acquires Coyle and Greer
Ontario-based Talbot Marketing (asi/341500) has acquired the assets of fellow Canadian distributor Coyle and Greer (asi/169529), the companies have announced. Financial terms of the deal, which closed on February 11, were not released. "We first had discussions two and a half years ago and then they approached us in November," says Steve Levschuk, president of Talbot Marketing. "They have fantastic salespeople, a large and loyal customer base and a good name. They do a lot more awards than we do."
Founded in 1947, Coyle and Greer specialized in employee-recognition programs, online Web stores, awards and incentives, corporate jewelry, logoed apparel and other promotional items. Through the transaction, Talbot gains 13 additional salespeople, bringing its total number of independent contractors to 110. "We're hoping through this we can continue to ramp sales up," Levschuk says.
According to Levschuk, Coyle and Greer has generated annual revenues just above $3.5 million. Meanwhile, in 2010, Talbot's sales rose 15% and profits increased by 30%, Levschuk says. "We had a very good year and we're expecting sales this year to be up 21%. We're also always looking for more companies to acquire as long as it's the right fit."
 PPPC Lauds its Best & Brightest
At the Image Awards ceremony held during the Promotional Product Professionals of Canada (PPPC) National Convention in Toronto, 82 Image Award trophies were presented to 37 members of the PPPC. The prestigious Image Awards recognize the best of the industry's talents and achievements in 2010. The entries were judged on precise criteria such as creativity, strategy, execution and results. Here are the ASI member companies honored as Distributor and Supplier of the Year:
Distributor of the Year
Genumark Promotional Merchandise Inc., National GOLD
Gagnon Levesque Inc., Eastern Region GOLD
Accolade Reaction Promotion Group Inc., Central Region GOLD
Image Group Inc., Western Region GOLD
Supplier of the Year
Leed's, GOLD
Ash City Worldwide, SILVER
Spector & Co., BRONZE
For a complete list of winners, click here.
Toronto & Montreal Surveyed in End-User Study
With a focus on internationalism, a surveying team conducted in-person interviews with businesspeople in New York, Chicago, Los Angeles, Philadelphia, London, Sydney, Toronto and Montreal metro areas on behalf of ASI regarding promotional products they had received. The purpose of the interviews was to understand where items are kept, frequency of use, why the promotional product was kept and to estimate the number of impressions the advertiser makes with the item. In-person interviewers conducted a total of 406 completed surveys.
Further, an online panel survey was conducted among recipients of advertising specialties to augment the sample from the in-person interviews. Combined with the in-person interviews, there were a total of 3,332 completed surveys for this study.
As a sample of the data culled, when asked about the ability of ad specialties to include user opinions, 41% of U.S. respondents indicated their opinion of the advertiser was more favorable after receiving a promotional product. Nearly one-half (47%) of Canadian respondents had a more favorable impression. Among those who had not done business with the advertiser already in the U.S., 27% thought it likely they would. In Canada, this was 10 percentage points higher, at 37%.
Because the promotional products benefit is so clear to end-users, they are more aware of the sponsor on the product and they are able to create a positive impression of the sponsor, as they find value in the item each time it is used. To access ASI's Global Advertising Specialties Impressions Study in its entirety, click here.
Swedatron Changes its Name
Swedatron (Canada) Ltd. (asi/90344) has reinvented itself with the launch of the PSL brand into the Canadian market. As part of this new direction, effective immediately, Swedatron (Canada) Ltd. has changed its company name to PSL Canada Ltd., hoping to further solidify its identity in the market as the Canadian branch of the world-renowned and award-winning supplier/manufacturer, PSL Limited, based out of Hong Kong and Holland.
While the company's address and phone numbers will remain the same, its e-mail addresses have been changed to the domain name @pslcanada.ca.
Leed's Enters Awards Category With Orrefors Deal
Leed's (asi/66887), a member of Counselor Top 40 supplier Polyconcept North America, has announced plans to enter into the awards product category. Partnering with manufacturer Orrefors, Leed's will offer 99 glass items, including bowls, picture frames, vases and drinkware, as well as traditional awards.
"Leed's is proud to add Orrefors to the collection of retail brands we offer our customers," says Jeff Brown, chief marketing officer for Polyconcept North America. "The brand has a long history of excellent craftsmanship and unique design, which will complement our line nicely."
According to Leed's, two decorating options will be available for Orrefors' products. A screen-etching method, which gives the appearance of etched glass, is available with a 24-hour turnaround. Orrefors' glassware can also be sand etched on a 10-day turnaround.
"Orrefors is excited to partner with Leed's as our exclusive supplier to the promotional products industry," says Kevin Dougherty, director of corporate sales for Orrefors Kosta Boda USA. "We feel they can provide a level of service that we could never reach on our own."
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