Sizing Up Golf’s $2.9 Billion Club and Ball Market

The equipment industry is the most commercially visible sector in golf, thanks to clubs and balls from major manufacturers found in millions of golf bags around the country, not to mention the multi million-dollar endorsement deals given to top professional players.

The almost $2.9 billion market is driven by golf being one of the nation’s leading participation sports, as everyday golfers have the chance to play much of the same equipment used by the game’s biggest stars.

As such, it shouldn’t come as much of a surprise that one-fifth of the businesses in the NGF GOLF 100 are equipment companies, with 20 spread among the club, shaft, grip and ball segments.

Based on wholesale equipment dollars, golf is among the largest recreation sports in the United States, trailing only camping and fishing. Equipment is essential when it comes to golf, which is why – even though hard good sales are down from their record highs prior to the 2008 financial crisis — more money is spent annually on clubs and balls than on equipment for basketball, baseball and football combined, according to the Sports & Fitness Industry Association.

Equipment companies are front and center at the PGA Merchandise Show in Orlando every year, unveiling new products at the annual Demo Day and showcasing their latest innovations at attention-grabbing booths on the show floor.

(FOR THE FULL NGF GOLF 100 LIST, CLICK HERE)

Drivers on display at during the 2019 PGA Merchandise Show at Orlando County Convention Center in Orlando, Florida. (Photo by Hailey Garrett/PGA of America)

Big picture, the hard goods equipment sector in golf looks different than it did prior to the economic downturn, with an OEM market that’s far more consolidated amid a determined fight for market share.

But the environment for equipment companies and their customers is much healthier – and rational – than in past years, as OEMs continue to adjust to changes in consumer spending and stable levels of traditional green-grass participation. Manufacturers have returned to more sustainable product cycles, for the most part, while offering continuous innovation, from balls and putters to wedges and drivers.

“The state of the golf equipment industry overall is very positive, and inventory levels are healthy,” said Dan Ladd, Executive Vice President, GM for Cobra Puma Golf. “Even as the industry evolves, certain things remain true, and the first is that innovation and performance are still winning in all club categories. If you make great product, golfers will buy it. In addition, custom fitting remains a strong point for hardgoods, growing double digits annually.”

Golf Pride President Jamie Ledford, whose company is one of the three golf grip manufacturers in the GOLF 100, said the equipment business is more stable and healthier than any time over the past decade or so.

“The golf equipment market seems to have stabilized into a `new normal’ over the last two to three years,” Ledford said. “2016 was a tough year when Nike exited from clubs and Golfsmith declared bankruptcy. Over the last couple of years, it has felt like we have settled into a new normal. I think we still need to find those avenues for growth for the industry to continue to be healthy going forward.”

A display of club grips at the 2019 PGA Merchandise Show held at Orange County Convention Center in Orlando, Florida. (Photo by Montana Pritchard/PGA of America)

Golf clubs make up roughly two-thirds of equipment industry sales, with balls comprising one-third. Not surprisingly, then, manufacturers and suppliers for golf clubs and components feature prominently in the NGF GOLF 100: Acushnet (Titleist), Callaway, Bridgestone, Cleveland/Srixon, Cobra Puma, PING, Tour Edge, Wilson, U.S. Kids Golf, PXG, TaylorMade and Mizuno are all on the list.

Acushnet, the parent company of Titleist, tops $1.6 billion in annual revenue. Callaway had a record $1.24 billion in net sales in 2018 and its 2019 third-quarter sales increased 62% year-over-year to record levels for the company.

“Our portfolio of brands continues to deliver strong financial results while positioning us for attractive long-term prospects,” said Callaway President and CEO Chip Brewer, while adding that the company’s golf equipment business “continues to deliver attractive revenue growth.”

While advanced technologies continue to help golfers improve their performance – typically the No. 1 priority for equipment manufacturers – personalization and customization in the equipment space are increasingly important, whether through custom fittings or other experiential opportunities that bring consumers closer to the game. And those consumers have unprecedented access to equipment today thanks to online sales, fitting studios and equipping outlets (such as Club Champion and GOLFTEC), not to mention a robust secondhand market.

A student tries to figure out if a particular club is right for him, at a GOLFTEC training location. (Photo courtesy: GOLFTEC)

As OEMs fight for market share and customer retention, their innovative approaches extend to both technology and consumer engagement. It’s not unusual for the top brands to compete both on the R&D front as well as the marketing side, in terms of creating original content and engaging directly with consumers through social media and other outlets.

“The business continually evolves and the way you ran a successful golf equipment company years ago isn’t the same way you do it now,” Brewer said.

PXG, meanwhile, took a different approach in the equipment game and essentially established a niche for ultra-premium clubs in the U.S.

“We’re in a different business,” said PXG founder Bob Parsons. “We have people that that makes sense to and they see the value. We have others that don’t. Our job is to reach those who don’t and maybe help them understand what we’re all about.”

The NGF GOLF 100 also features a handful of successful shaft manufacturers: KBS, Fujikura, MCA Golf, UST Mamiya and TRUE Temper Sports.

Aldila is among the golf shaft companies in the latest GOLF 100. (Photo courtesy: Aldila)

There are seven companies that manufacture golf balls among the NGF GOLF 100: Acushnet’s Titleist, Bridgestone, Srixon, Callaway, TaylorMade, Mizuno and Wilson. South Korea-based golf ball maker Volvik, a member of the inaugural GOLF 100, is among those moved to the International 25.

Lamkin and Winn join Golf Pride as the grip manufacturers on the list. The grip, after all, is the only part of the club that golfers hold on every shot.

Golf Pride’s Ledford, for one, sees mass customization and personalization continuing to transform the golf equipment category in years to come.

“Every golfer is different and there are all kinds of different swings out there. It sure seems like there is a continuing opportunity to transition from stock equipment used by everyone to more and more customized and personalized equipment that is tailored to individual golfers,” Ledford said. “This change will continue to transform how equipment is developed, manufactured, and sold.

“The next 10 years could look a lot different than the past 10 years in this respect.”