Summit Prepares Promo Pros For The New Normal
More than half (53%) of first-day attendees at the 2023 PPAI Product Responsibility Summit say they are already importing promo goods from Mexico, which overtook China in May as the United States’ top import partner.
Given that more than 80% of attendees at the 2022 Summit said they were looking to shift their product sourcing away from China, it’s not surprising to see many promo companies increasing their nearshoring efforts. However, a rapid poll of this year’s attendees showed that China is still the top source for imported products, followed by Vietnam, then India and Bangladesh roughly tied for third place.
“A lot of our clients realized they had all their eggs in the China basket, and that was detrimental to their business,” says Karolyn Helda, global services and technical services director of consumer goods for North America with QIMA, a provider of supply chain compliance solutions and a gold sponsor of the event.
Fellow panelist Michael Facer, director of procurement for Utah-based SnugZ USA, the PPAI 100 No. 9 supplier, discussed the pros and cons of sourcing products from Mexico and noted that many Mexican factories are heavily dependent on raw materials from China, which can complicate things.
“As long as the companies you’re working with have their supply chain figured out and fleshed out, it’s not so bad,” he says. “The key in Mexico is finding those partners. ... It might take some work, but there are partners with those longstanding relationships ... so you don’t have to cross an ocean.”
Early Birds Get A Crash Course In Regulations And Product Safety
The promo industry’s premier product responsibility event opened on Sunday, October 8, with a strong slate of sessions bringing attendees up to speed on compliance basics and deeper dives on pressing issues. With approximately 140 attendees and a record number of first-timers, Summit, held in Alexandria, Virginia, was off to a brisk start.
“PPAI’s annual Product Responsibility Summit continues to be a critical source of product safety and regulatory education for attendees each year because laws, regulations and standards that apply to products in our industry are not static – they evolve and grow,” says Rick Brenner, MAS+, president of Product Safety Advisors and co-chair of the event. “To be relevant and compliant, you have to be current.”
PPAI Public Affairs Manager Maurice Norris, MAS, and Helda got Summit’s programming started with a Product Responsibility 101 rapid-fire crash course and a quick review of California’s Prop 65. He encouraged attendees to ask tough questions and keep thorough records to address compliance requirements – and to look beyond the letter of the law to promote safer products. Norris says, “Product responsibility is everyone’s job.”
With a patchwork of state regulations, there’s no one rule when it comes to PFAS (aka “forever chemicals”), but Andy Blahnik, quality and compliance manager for Massachusetts-based Gemline, the No. 5 PPAI 100 supplier, says waterproof products are the most relevant category. “Usually, if you’re not asking for that function, it shouldn’t be there,” he told attendees.
Regulation of PFAS was not on anyone’s radar when Summit launched in 2011, adds Brenner. “Now, nearly every state has existing or pending legislation regulation PFAS in consumer products,” he says. “The regulators themselves change, as does their focus. Today, the CPSC is far more aggressive than the 2011 commission, and civil penalties have grown exponentially. Aside from regulatory changes, we have new companies in the industry, and we have new people in product safety and compliance positions.”
An interactive discussion on foreseeable use and misuse of products was neatly summarized Brenner, who says, “A product can be 100% compliant but not safe.” He urged attendees to constantly ask what could go wrong before releasing products into the market.
Fellow panelist Lenny Polakoff, a partner in New York-based Zagwear, the No. 50 PPAI 100 supplier, shared two real-world examples to illustrate the importance of thinking a project through with risk management in mind.
“As we’re dealing with end users and clients, there is a difference between what’s acceptable in retail versus what’s acceptable in promo,” he says. “When we’re giving it away for free ... that elevates the level of responsibility that we feel and that our clients feel.”
After Sunday’s sessions, the promo pros gathered for an opening reception for refreshments, networking and to discuss the day’s topics.
Drinking From The Product Safety Firehose
On Monday, Summit’s first full day brought together subject matter experts and thought leaders from both within and outside the promo industry to both delve deeper on some of the topics examined on Monday, and to tackle a range of other product responsibility concerns. A theme soon emerged: Documentation matters – a lot.
“If it’s not documented, it didn’t happen,” says Lisa El-Shall, senior director for pharmaceutical and device consulting services with EAS Consulting Group, a speaker on the first panel, titled “How To Survive An FDA Inspection.”
That session covered changes coming with the Modernization of Cosmetics Regulation Act (MoCRA), current Good Manufacturing Practices (cGMPs) for commodities regulated by the FDA, and labeling and registration requirements for drugs, cosmetics, food and more.
- MoCRA is the first major update to laws regulating cosmetics in 85 years.
JillAnn Rogoz, senior director of compliance with alphabroder, the PPAI 100 No. 3 supplier, and also on the panel, shared her company’s experience with an FDA inspection.
- Rogoz emphasized the importance of thorough and up-to-date standard operating procedures and activity logs for everything.
- She recommended consolidating FDA-regulated products at a single location to simplify the process and reduce regulatory costs, performing internal SOP audits, and conducting mock recalls to be better prepared for the real thing.
- These steps promote continuous improvement and also show the FDA your company is doing its due diligence.
The session “Recall Readiness Best Practices” echoed the call for documentation, emphasizing how preparation can make a recall less painful. Start by asking how well your materials, systems and processes are documented, says product safety attorney Neal Cohen. “It’s one thing to know about something, and another to be ready to do it.”
Keeping thorough records is a key risk management strategy that can help any company navigate a recall and minimize its impact. Brenner, on the stage with Cohen, says, “Recalls can be relatively quick and painless if you’re prepared … or they can be existential.”
Former U.S. Customs and Border Protection officer Shawn Harwood, now an expert supply chain security adviser with ELEVATE, also says documentation can help establish your company’s good faith compliance efforts.
“You want to be seen immediately as a partner in combating forced labor,” says Harwood, adding that if CBP representatives find your materials convincing and feel you’re on the same page, “you’ve won half the battle.”
Cohen returned to the microphone for an update on Reese’s Law, signed into law in 2022 and expected to take effect later this month, with a gradual ramping up of enforcement to full effect in mid-March 2024. The law requires labels and compartment design that are more stringent than current toy standards and are likely to have “a tremendous impact” on the promo industry, and Cohen recommended designing products to comply with the toughest standard to minimize risk.
After lunch, PPAI’s Norris shared updates on legislative subjects that may impact the promotional products market. He cautioned that the progress of any of these rules is dependent on potential government shutdowns.
- The FCC’s proposed rule, “Cybersecurity Labeling for Internet of Things,” is intended to help consumers choose internet-connected devices that are less vulnerable to hacking, while balancing convenience and security.
- For several years, PPAI has worked to influence the Country of Origin Labeling (COOL) Online Act. While the act has been updated to include multi-sourced products listing and fungible goods, Norris described its language as still “nebulous.”
- The session closed with a recent announcement from the EPA, that it has finalized reporting and record-keeping requirements for PFAS under the Toxic Substance Control Act. The rulemaking creates a pretty big reporting requirement, and PPAI has provided further details here.
Kelli Hoggle, a USA and Canada network representative for amfori, which helps businesses improve the environmental, social and governance performance of their value chains, spoke about responsible sourcing and growing regulatory pressure worldwide, including:
- Canada passed a law in May that prohibits goods made with child labor.
- A proposed law in the European Union includes both human rights and environmental impact and extends responsibility throughout the supply chain.
- Another EU proposal prohibits the sale, import or export of goods made with forced labor.
Ben Mead, USA managing director for Hohenstein Institute America, the U.S. arm of a global network of textile testing labs, spoke about the complexities of chemical management, including existing and emerging legislation. In particular, he points to European Union requirements as the most stringent in the world, such as the proposed EU Green Deal, which would:
- Ban chemicals deemed most harmful.
- Phase out all PFAS.
- Establish a simplified risk assessment process.
Erich Nolan, founder, consultant and advocate with Stewarding Design (who also consults for HALO, the No. 2 distributor in the PPAI 100), closed the day’s sessions with a presentation on how to calculate greenhouse gas emissions and exploring scope 1, 2 and 3 emissions as defined by the Greenhouse Gas Protocol. Nolan recommends three actions for addressing emissions reporting:
- Perform a material assessment to determine what matters most to the business, both internally and for stakeholders.
- Start planning now for carbon emissions reduction.
- Prepare for program audits, which may soon be required in many jurisdictions.
And again, documentation got the last word: “It’s very important that you have a solid, defensible record,” says Nolan. “… Documentation is going to be critical.”
Attendees participated in roundtable discussions after the sessions closed to compare notes and share perspectives. These discussions continued later in the evening with small group dine-arounds at local restaurants.
Summit Sponsors At Work
Summit attendees received badges provided by ID Line and a backpack from Spector & Co. stuffed with a Maverick Button-Up from Storm Creek, a Carson recycled PU leather notebook from Goldstar, a Reborn recycled aluminum pen with laser engraving, and an h2go nexus insulated water bottle from ETS Express, each decorated with the event’s logo or flaming bicycle logo.