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 PPAI Industry Trends & Predictions Mid-Year 2025 


Trend 1: Growth Is Slowing And Firms Must Adjust

Industry-wide growth has slowed to low single digits. Nearly 80 percent of top suppliers and over half of distributors report higher procurement costs in the first half of 2025. Yet only a few firms are seeing improved margins, signaling a growing disconnect between rising operating costs and what the market is willing to bear. Prediction: Expect firms to double down on pricing discipline, forecasting accuracy and cost control throughout the year.

Trend 2: Tariff Pressure Is Reshaping Global Sourcing


China tariffs remain the top concern for suppliers heading into 2026, with 70 percent citing them as their primary global risk. In response, sourcing strategies are shifting fast. More than 60 percent of top suppliers are expanding beyond China, favoring regions such as Vietnam, India, Mexico and the United States. These moves are driven not only by cost but also by the need for greater supply stability and client-facing transparency. 38 percent say supply chain disruptions continue to impact costs and delivery timelines. This is placing greater pressure on the distributor's role in the value chain. Prediction: Firms that cannot

Prediction: Tariff escalation will accelerate permanent sourcing diversification, reshaping global supply dynamics across the industry. Firms that cannot meet new buyer expectations will risk losing share to those that can deliver faster, cleaner and more responsibly.

Trend 3: Buyers Are Demanding More Than Products

Distributors are encountering a transformed buyer. Price and availability are no longer the only differentiators. More than 50 percent of top distributors report increased demand for personalized solutions, faster fulfillment and greater visibility into product origin and ESG compliance. At the same time, 38 percent say supply chain disruptions continue to impact costs and delivery timelines. This is placing greater pressure on the distributor's role in the value chain. 

Prediction: Firms that cannot meet new buyer expectations will risk losing share to those that can deliver faster, cleaner and more responsibly

 Trend 4: Fulfillment is becoming a Strategic Priority


Distributors continue to absorb risk from supply chain breakdowns. More than 38 percent report ongoing logistics issues. In response, nearly 65 percent are actively expanding or diversifying their supplier base, while almost 60 percent are collaborating more closely on demand forecasting.  As fulfillment becomes more complex, especially with international sourcing, it is becoming a front-line business concern rather than a back-office function.

Prediction: Distributors will invest more in supplier partnerships, inventory visibility and regional warehousing to stay reliable and protect client relationships.

 Trend 5: Advocacy Is Turning Strategic

As trade pressures grow, suppliers and distributors are aligning around a focused call for tariff relief. Rather than broad exemptions, the industry is prioritizing specific categories like drinkware, apparel and electronics where domestic alternatives are limited and costs are rising fast.

Prediction: Trade policy will become a more visible issue within the industry, with firms increasingly engaged in advocacy efforts to protect margins and client value.

At PPAI Research, our goal is to deliver the intelligence that empowers industry leaders to navigate uncertainty and move forward with confidence.