Businesses who are spending more on sustainable corporate merchandise, but choosing a greener product may only address part of the sustainability equation.
“You can procure the most environmentally responsible product available, but if you order 10,000 and only use 7,000, you still have a waste problem,” says Malcolm Herbert, chief financial officer at Sapphire. Image supplied
In the US, sales of promotional products classified as sustainable reached $3.69bn in 2024, according to the Promotional Products Association International (PPAI), representing 20% year-on-year growth.
While South Africa's corporate merchandise sector is not officially tracked at the same level, the scale of the local market is reflected in the volumes handled by major suppliers, with one of Africa's largest promotional product businesses reporting the capacity to brand more than 250,000 products a day.
The bigger issue, according to Malcolm Herbert, chief financial officer at Sapphire, an integrated business solutions company specialising in procurement, logistics and branded merchandise, may be how effectively businesses manage the products they buy.
“The problem is increasingly not only what businesses buy, but how much they buy and what happens to it afterwards,” says Herbert.
“Over-ordering, poor demand planning and merchandise that becomes obsolete or expires before it is ever used can mean businesses pay to manufacture, brand, transport and warehouse products that ultimately deliver no commercial value.”
Sustainability starts before procurement
As corporate sustainability strategies increasingly influence purchasing decisions, Herbert argues that preventing unnecessary products from being produced in the first place should receive greater attention.
“You can procure the most environmentally responsible product available, but if you order 10,000 and only use 7,000, you still have a waste problem,” he says.
For Herbert, sustainability is not limited to whether a product is recyclable, reusable or made from environmentally friendly materials.
“It is about how accurately you plan, how much you buy, how intelligently you distribute it and what happens to the stock afterwards.”
The environmental context is significant. The United Nations Environment Programme estimates that 92 million tonnes of textile waste are generated globally every year.
For companies buying uniforms, promotional clothing, point-of-sale material and campaign collateral, better procurement and inventory management could therefore play an important role in reducing unnecessary waste.
“One of the biggest contributors to unnecessary waste is over-purchasing and forgotten stock,” says Herbert.
The hidden cost of obsolete inventory
Campaign materials are often ordered months before they are needed, with forecasts moving between internal teams, agencies and suppliers before a final order is placed.
If those forecasts are not tested against actual requirements and existing stock levels, businesses can end up with surplus merchandise that has limited value once a campaign or event has ended.
“Campaign quantities are often forecast months in advance,” Herbert explains. “If forecasts aren't interrogated against actual requirements and existing inventory, businesses can be left with dated collateral, event-specific merchandise or perishable products with little or no value once the campaign ends.”
The financial impact can extend well beyond the original purchase price.
Herbert recalls an example Sapphire encountered when taking over a client's inventory management programme in 2021.
“Among the stock sitting in storage were promotional lollipops that had expired approximately two years earlier,” he says.
“The client hadn't only lost the money spent purchasing something that could no longer be used. They had continued paying to warehouse it for another two years.”
Sapphire has since encountered similar situations involving perishable promotional products purchased for one-off events, returned to storage and left until after their expiry dates.
“Waste has a compounding cost,” says Herbert. “You can pay for the product, freight and handling, and then continue paying for the space it occupies long after it has lost its value.”
Inventory visibility becomes a business issue
For larger organisations, Herbert recommends a more disciplined approach to managing branded merchandise and campaign collateral.
This can include detailed quarterly stock reviews, monthly reporting on stock levels for replenishment programmes and agreed limits on inventory exposure.
The objective is not only to reduce waste, but also to identify surplus stock early enough for it to be used elsewhere.
“Where excess campaign stock remains after packing or distribution, clients should be alerted while there is still an opportunity to redeploy it,” he says.
Where reuse is not possible, companies can consider alternatives such as recycling or recovering value from the material.
But physical inventory is only one part of the challenge.
When delivered doesn't mean used
Herbert says another form of waste is often overlooked: marketing material that is successfully delivered but never used.
“A promotional banner sitting in the back room of a retail or fuel site during the campaign it was designed to support may eventually become physical waste, but its commercial value was lost much earlier,” he says.
From a traditional procurement perspective, a programme may appear successful. The correct product was produced, delivered to the right location and paid for.
“If it wasn't used when it was supposed to be used, however, its entire marketing opportunity may have been lost,” Herbert says.
This is where technology can play a growing role in improving visibility across large, geographically dispersed campaigns.
Sapphire uses promotional management applications across client programmes, including Astron Energy and Engen, to improve visibility over the distribution and implementation of campaign material across multiple locations.
The technology is intended to help close the gap between products being delivered and products actually being deployed.
Rethinking sustainable merchandise
The growing focus on sustainable promotional products is a positive development, but Herbert believes businesses need to take a broader view of what sustainability means in procurement.
A product made from sustainable materials still represents wasted resources if it is over-produced, never used or left to become obsolete in a warehouse.
For companies under increasing pressure to manage costs and demonstrate progress on sustainability commitments, better forecasting and inventory discipline could offer a practical opportunity to address both.
“Sustainable corporate merchandise requires businesses to look beyond the product itself,” Herbert concludes.
“Preventing waste in the first place is one of the most effective sustainability strategies a business has.”
