Packaging and promotional item specialist Pure Trade is celebrating its 25th anniversary in 2021, one year after Sparring Capital took a majority share in the Paris-based company. Luxe Packaging Insight spoke with CEO Stefane Ladous and General Manager Virginie Honoré about its regional expansion in the US and in Asia and the state of the market.
Promotional items have been at the core of your offer since Pure Trade was founded?
SL: Yes, but with a twist: our promotional items were personalized for each of our clients. At that time we worked mainly in cosmetics, but also in other consumer markets ranging from masstige to prestige. We were also “multi-material” with expertise in wood, cardboard, textile and metal injection; this gave us a wide-ranging vision both in terms of our client portfolio and our manufacturing footprint. We later branched out to packaging, mainly secondary packs, but also primary solutions.
In 2005, we came to a turning point and made the strategic decision to specialize in a single market sector. Given that cosmetics was our strongest segment — it accounted for around 40% of our activity — we opted to devote our business solely to fragrance and cosmetics. As a result, we reorganized our corporate structure and selected our production partners in line with this decision.
You work with manufacturers mainly in Asia?
SL: Yes, our business model is to work with a network of partners, some with exclusivity agreements, which allows us to be flexible and adapt quickly to market and client demands. The bulk of our production is in China, but for the last few years we’ve been trying to bring some production back to Europe whenever possible.
What differentiates Pure Trade from its competitors?
VH: Our ability to respond to our clients’ demands across different sectors is one of our key selling points. We are mono-market, but within this market, we can meet nearly all of our clients’ needs: from tin seasonal coffrets and make-up packaging to promotional items. Today 40% of our activity is in promotional items, 40% in packaging and the rest in textiles and accessories. The strategy has paid off as we began reporting double-digit annual growth in 2010. In 2019 we had sales of $75m and in 2020 we finished the year at around 5% below that as a result of the crisis. This year, we hope to return to 2019 levels.
How will this ratio between product segments develop?
SL: It’s a good balance for now, but some markets will grow. Today, for example, we are seeing the Fair Trade textile segment really take off. As we come out of the health crisis it’s clear that having a diversified product mix is paramount; we saw that when the travel retail market, which accounts for a portion of our sales, took a beating due to airport closures. Travel retail didn’t come to a standstill given that some zones performed strongly, such as Hainan in China, and some of our business in the channel was compensated by the growth in e-commerce sales.
Will Pure Trade move into other sectors, such as spirits?
SL: This is something we’ve looked into, but for the moment there is still a lot of ground to cover in beauty with our current and future clients. We’re also mining growth from a regional perspective: Pure Trade is expanding its US activity, and also in Asia, where we are opening a new sales office in Shanghai in the coming months. The Chinese market was a real boon for us during the health crisis when Europe was still shut down. Today, our business is split between Europe and Asia, which each account for around 45%, and the rest in the United States, so there is still ample room for expansion!
Are your clients reducing their promotional items or accessories offer due to growing sustainability demands?
VH: No, we aren’t seeing that at all. Gifts and promotional products are deeply entrenched in the market and are key to boosting retail sales, not to mention the fact that the beauty consumer has come to expect them. This could change, but for now brands are focusing on offering more durable and sustainable products. We are seeing a real shift, as our clients are increasingly willing to invest in more eco-designed options, especially in recycled materials. And the more they adopt these solutions, the more the cost of materials will go down, of course.
What is your approach to eco-design?
SL: The sustainability question is something we’ve been working on for years through specific projects in Madagascar and more recently a carbon compensation program. Pure Trade is also now certified Ecovadis Platinum. If we look at the products themselves, our range of ‘green’ materials, namely for promotional items, has grown exponentially in recent years. We work on solutions in-house and this year we inaugurated our Creative Lab in Paris where our teams work on sourcing novel materials. Sustainability is a big part of this equation. Given that we source our own materials, we are able to control what we choose to work with and where it is sourced. This part of the business will surely continue to grow.