With one of the largest crowds in recent memory thronging the show floor last week, the PGA Merchandise Show in Orlando demonstrated that the golf industry is alive and well despite all the economic and climatic turmoil affecting other sporting goods markets. Before the show, pre-registration was up 5%, while comments on the floor itself generally followed the lines of “more crowded than last year,” “busiest Ive seen in a while,” or “record crowds at our booth.”
Released shortly before the show, the “2005 Golf Economy Report,” conducted by SRI International and commissioned by the leadership of Golf 20/20, revealed that golf in the U.S. generated $76 billion in direct economic impact in 2005, up significantly from $62 billion in 2000. In addition to golfs direct revenues, the report considered indirect and induced income generated by golf, showing a total economic impact of $195 billion in 2005, while creating two million jobs with wage income of $61 billion.
With a large dollar amount affixed to the segment, the major topic of discussion was the new rules set into effect by the USGA and the Royal & Ancient that allowed for greater adjustability to clubs. Previous rule changes regarding the issue by the groups brought about the adjustable weighted heads that met with some success in the market, but this new rule allows whole shafts to be changed out in favor of other versions. What this really means is that if the weather turns rough and the golfer would prefer a lower trajectory shot, he or she can swap out shafts to help accomplish that desire. However, the market for this technology will likely be noticeably smaller than for that of the high-MOI product that debuted last year. For most, simply having a set of clubs custom fit will be enough.
On the apparel front, the youth movement that was beginning to get its legs last year has bumped into full swing with several companies expanding their presence and one featuring a complete revamp to target this market. The performance trend is still in effect with even some of the super high-end traditional cotton manufacturers beginning to at least explore the opportunities in the market as retailers ask after the product.
Callaway Golf quickly came to market with a product taking advantage of the USGAs new rules as it introduced the new I-Mix Technology. Available for FT-i and FT-5 club heads with a variety of shafts, I-Mix offers over 1,600 permutations through the 22 different heads and 75 different shafts available. The traditional versions of the FT-i and FT-5 will continue to carry forward, while the new I-Mix versions will be only approximately a $50 surcharge more (not including extra costs for higher priced shafts). In addition to carrying high-MOI down to Squareway Woods, Callaway also introduced its FT i-brid irons, which are designed as game improvement clubs with the ease of use of hybrids, but with a swing that is more like a typical irons swing.
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The company completely relaunched its womens line with a focus on Big Bertha product. To aid retailers, the Big Bertha GEMS set is a complete set for women new or returning to the game that comes in a self-merchandising box, which is ready to go straight to the sales floor.
Wilson Golf debuted its Fybrid club, a mix between a fairway wood and a hybrid. The company has found that with the new technologies finding their ways into golf bags, consumers are either ending up with a yardage gap between hybrids and fairway woods, or carrying multiple clubs to hit the same distance. To that end, the manufacturer introduced the Fybrid, which bridges that gap. Interestingly, it is encouraging playing not by club number, but by distance hit for that day.
Wilson has a specialized POP that it says is used by a majority of retailers to sell clubs regardless of brand by finding what a customer is currently carrying in their bag and what they should be carrying. The answer, of course, always includes a Fybrid, so the question becomes how often that consumer will in turn begin carrying the newest Wilson Staff club.
Yes! Golf will introduce 6 new models in 2008 in a staggered launch. The company currently has 18 different putters on the market, all accounting for between 3% and 15% of the companys sales. Sales were up 11% in 2007 and the company thinks matching that growth is well within its range for 2008. Currently, the brand is in 3,000 accounts, but looks to expand into 5,000 more, especially at green grass.
The company continues to carry its C-groove technology forward on all its putters, but in 2008 will break the mold at least in its naming conventions as it releases the Groove Tube in mid-May that features a site tube to allow for over-ball alignment. On the international front, the company said it is the top putter company in Korea and sees strong growth possibilities in the rest of the world as well. Finally, 2008 will see Yes! open a new research and development facility with more details on that coming during the second quarter.
Nickent also jumped on the “change on the fly” wagon with the launch of its 4DX Evolver driver, which adds the ability to swap out shafts through a bolt in the heel to last years 4DX driver. The Evolver comes in both a single shaft/single head package and a double shaft/double head box.
Miura Golf enters its fourth year of a push into the U.S. market as a branded entity. The forged iron manufacturer, which specializes in extremely high quality, narrow margin of error clubmaking, had previously manufactured top-end OEM components for the likes of TaylorMade, Titleist and others, but now looks to expand its geographic footprint in the U.S. The company plans to open new doors in 2008 and expects to maintain a 30% growth rate.
PING was back on the show floor for the first time in 5 years, but with a much different message than is typical. PING partnered with the PGA to produce a custom fitting best practices symposium beside the PGAs main presentation stage in the hardgoods area of the show. The company came back to the show touting its new nFlight custom fitting system.
Retailers that spoke with SEW described the fitting presentations put on by PING as “very professional” and were impressed by the companys approach that focused less on selling new clubs, or even selling its new system, and more on making sure that when a customer comes to get fit for a new set, that new set is fit properly.
On the product front, PINGs new driver for the year is the G10, which was described as experiencing strong sell-through. Internationally, the company opened an assembly facility in Japan, which will help to take its custom fit, every time message to that market, but has found a new job in having to educate that consumer about the benefits and even the need of custom fitting. The EU and Canada were both very strong in 2007.
Heavy Putter will add 7 new putters to its line for 2008 including addressing the womens market for the first time with 2 models. The new DF line will lower Heavy Putters average selling price as it removes the adjustable weights featured on the companys original two models. Since its inception in 2005, the company has opened 3,000 doors, while trading on just those two original models. With the new line-up, Heavy Putter hopes to continue opening new doors and at the same time opening new customers up to its technology through the somewhat lower price point.
Srixon continues to work on its acquisition of Cleveland Golf, which was announced in early November (see SEW_0745). The conversations about synergies between the two companies and where consolidations will make sense are ongoing with decisions expected to be finalized by the end of 2008. The companies have had strong communications across their many departments to make sure that the process runs smoothly. An easy synergy for the two is in the ball department, where Srixon has a strong presence and Cleveland has none. Already, Steve Flesch on the PGA Tour has switched to playing a Srixon ball. Sales for the Srixon brand have grown for each of the past 6 years, with 2007 said to have been “very nice.”
The company has greatly grown its presence in terms of mind share with the consumer, citing a tracking study started four years ago in which less that 1% of consumers recognized the name Srixon, versus 65% last year. The companys major new product launch was the ZR-W driver, which goes about the business of high-MOI from a different perspective. Rather than funky geometries and extreme weight arrangements, Srixon developed the Starburst Powerface that features 4 bulge, roll radii to correct off-center hits back to a straight shot.
MacGregor completely relaunched its product line, dropping the MacTec moniker it used previously to be replaced by the MT line. The line features irons for each level of play, from forged for the low handicapper to cavity backs for the game improvement golfer. For 2008, the company will make more noise about club designer Don White, closely tying his name to the clubs he has helped to produce.
