Golf Market growth stymied by wooden club problems

According to the National Golf Foundation’s (NGF) annual industry sales from 1993 to 1998, golf grew at a compounded annual growth rate (CAGR) of 9.2% (at wholesale). This golf industry sales figure includes clubs, balls, bags, gloves, and shoes.

There are several reasons for the growth of one of the oldest product segments of the sporting goods industry. The major impetus was that participation increased by two million people between 1993 and 1998 to 26.5 million.

Secondly, innovations in titanium clubs, graphite shafts, putter inserts, and stand bags have fueled sales growth. New technology has brought about higher price points than ever before, with avid golfers willing to accept them in exchange for technology. However, 1998 was a poor year for wood sales (especially titanium products), lowering the growth rate for golf equipment between 1993-1998 by two to three percent.

Lower price points for premium woods, combined with growth in mass merchandise club sales, have reduced the average price for clubs. And, the emergence of shallow-faced fairway woods has spurred new demand in the fairway wood category.

A race is underway to produce the next great golf ball, with four major players -- Callaway, Cobra, Nike, and Taylor Made -- entering the market. New ball technology could increase growth in the sector. Bankruptcies and subsequent consolidations of smaller club brands in 1998 could mean a new spark for these brands in 1999.

Customization of hard golf products is increasing and could boost sales. Custom fitted iron sales are increasing, with the possibility of more custom fitted woods and putters. New technology is being developed to custom fit shoes and gloves as well. Balls are being marketed towards more specific segments, with increasing brand extensions. For example, Cobra Golf’s Dista series for 1999 fits balls to a player’s swing speed.

The new World Golf Championship series will begin in 1999, which brings the top players in the world together three times a year to play for five million dollar purses. The three major U.S. tours will also see record purses in 1999, a trend likely to continue. The 1999 Ryder Cup will be played on American soil and is arguably the most exciting event in golf. Tickets are extremely difficult to come by, just like tickets for The Masters Tournament every year. All of the excitement in the professional world should have a trickle-down effect on consumers.

The United States Golf Association (USGA) plans to introduce new tests designed to measure golf ball and club specifications in a different way than in the past. Based on past market failures of non-USGA approved products, clubs and balls of current and future design not meeting the USGA’s tests could sell poorly in the marketplace. Club and ball companies are worried that the new tests will adversely affect their sales and limit product innovation. The effects of the USGA tests on future innovations could be enormous. It’s not clear, at this time, how the market will be affected by the tests.

With the cycle of titanium replacement starting to wane for avid golfers, club companies will search for ways to attain the high price points of the past. New materials, such as liquid metal and ceramics, could provide a new series of price boosts. However, consumer acceptance of higher price points is not assured.

Also see: cheap ladies golf clubs.

Author Notes:

Sharon Madison contributes and publishes news editorial to http://www.1st-in-golf.com. A source of information on golf equipment, golf manufacturers, supplies, tips and more.

	Golf Market
Golf Market growth stymied by wooden club problems