A bucket of golf balls at the driving range of the 2021 Tour Championship held at East Lake Golf Club in Atlanta, Georgia on September 3, 2021.
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Golf surged in popularity in almost every indicator in 2020 as people sought socially distant outdoor activities in the pandemic.
According to the National Golf Foundation, more than 24.8 million people played golf in the United States in 2020, an increase of more than 2% year-on-year, the largest net increase in 17 years. The sport has also seen the largest growth rates for beginner and youth golfers since 1997. It was the year Tiger Woods, then 21 years old, won the first major championship at the Masters.
Almost two years after the pandemic first hit the United States, golf will continue to grow in 2021 and support long-standing golf brands such as Callaway and Titleist, even if other activities resume. Also, more and more companies are trying to take advantage of changes in sports demographics and trends.
Golfers continue to flock to the course
For many in the golf industry, it was unclear whether the growth seen in 2020 was a pandemic feature or a new inflection point for sports.
By the end of July, the peak of the US golf season, the number of rounds played in 2021 increased by 16.1% compared to 2020, according to NGF data. July figures fell 3.1% compared to 2020, when almost all golf courses were reopened after a pandemic in a particular state, but 2021 figures were significantly higher than the previous year’s average. I am.
These increases are driven primarily by older, already passionate golfers, but the average number of rounds played by golfers increased to 20.2. In 2020. This is the highest ever since NGF began tracking its statistics in 1998. Young golfers, especially female players, saw a significant rise.
David Maher, CEO of golf conglomerate Acushnet Holdings, said in a second-quarter earnings briefing with analysts in August, “Newcomers are getting younger, more engrossed in the game and want to be better. “. “Much energy comes from enthusiastic and enthusiastic players who are simply playing more and consistently. More juniors, more women, younger [players], And more families. “
According to NGF data, the number of female golfers increased by 8% in 2020, the largest increase in five years. According to NGF data, 44% of those who played golf on the course in 2020 were under the age of 40, and the number of people in their 30s was about the same as those in their 60s.
Golf equipment company seeing sales growth
The increase in new golfers has benefited Axinet, which owns golf brands such as Titleist and Footjoy.
Acushnet’s second-quarter net sales in the United States increased 117.1%, with Titleist golf ball sales up 98.1% and Titleist golf club sales up 111%. In the first half of 2021, sales in the United States increased by 75.2%.
Callaway, which owns several golf equipment and apparel brands, including lines bearing the names of balls, clubs and other equipment, is also growing.
Earlier this month, the company raised its overall financial outlook for the third quarter and 2021 due to brand overperformance and ease of supply chain disruptions.
“More people are on the golf course, [there are] Callaway CEO Chip Brewer told CNBC in June that “we believe that more entrants to the game, more consumers and long-term trends will be very attractive.” “”
Dick’s sporting goods, which sells golf products at golf stores and golf retailers, have identified the sport as one of the growth drivers of the last quarter.
“The golf business continues to grow consistently,” Dick’s Sporting Goods CFO Lee Beritzky said at a financial results briefing for the second quarter of 2022 with analysts on August 25. ..
The company hasn’t analyzed the performance of the Golf Galaxy Store in its earnings report, but CEO Lauren Hobert said, “The golf business was tremendous for both Dick and Golf Galaxy.”
“Investing in talent, enhancing our in-store service model and becoming a trusted advisor to golf enthusiasts of all levels,” said Hobert, who recently opened the first next-generation golf Galaxy prototype store outside Boston. .. At its location, the Golf Galaxy Performance Center, golfers can not only buy golf products, but also take lessons, practice hitting the bay, and have custom club fittings.
In May, South Korean private equity firm Centroid Investment Partners acquired Tailor Made Golf for $ 1.7 billion. This is the largest acquisition ever in the golf equipment industry. Tailor Made, a manufacturer of clubs, balls and apparel, was sold by Adidas to KPS Capital Partners in 2017 for $ 425 million.
In a press release at the time of the transaction, Jinhyeok Jeong, founder and CEO of Centroid Investment Partners, said, “The industry is currently experiencing high demand and increased participation and is enjoying strong long-term opportunities around the world. “. South Korea is the third largest golf market in the world after the United States and Japan.
Golf equipment sales have slowed overall in recent months, according to NPD data. After doubling the first half of 2021 from 2020, sales in June, July and August 2021 decreased by 2% compared to 2020. And August 2021 sales are up 50% compared to those months in 2019.
Matt Powell, senior industry adviser to The NPD Group, said more consumers are embracing a healthier life after the pandemic, including more outdoor and sporting activities that help golf. Said.
However, it remains unclear how supply chain issues that plague other industries can affect golf equipment and limit growth.
Both Acushnet and Callaway executives have cited ongoing supply chain issues in Vietnam as potential road collisions. Both Acushnet and Callaway declined to comment on this article.
“We have inventory issues, but when we look at most of the categories we’re tracking, we see that our business has peaked,” Powell said. “However, [golf sales] It’s been reset to a new high level and hasn’t seen any significant growth, but it’s a much bigger business than it was two years ago. “
Golf expanding beyond the course
The rise of an interactive golf experience beyond the typical 18-hole course has also helped golf grow, especially for new spectators.
With 70 offices in six countries since its launch in China earlier this month, TopGolf’s growing popularity is one of the main drivers. While the actual golf experience reflects what you’ll see in a drive round, TopGolf aims for a more sociable and game-like experience with drinks and food.
Callaway, which previously owned 14% of Top Golf, merged with the company in March and paid $ 2.66 billion to acquire the rest.
TopGolf reported revenues of $ 1.1 billion in 2019 and growth of 30% since 2017. According to Callaway, TopGolf’s second-quarter revenue was $ 325 million and sales at the same venue were 90th percentile compared to 2019 levels. ..
Virtual trainers used for both recreational purposes and high-level golf training are also growing.
Full Swing, a manufacturer of golf simulators for commercial, residential and recreational facilities, was acquired by investment firm Blue In Capital in July for $ 160 million. The simulator can be used in other sports as well, but the golf feature is currently ranked second in the world and is used by PGA Tour pros such as Woods and Jon Rahm, who star in the European team in the Ryder Cup.
Blue In Capital’s partner, David Abultin, said: “The more people who swing golf clubs and experience sports at entertainment venues, which have proven to be the gateway to golf, the greater their ability to encourage participation in sports.”
In addition to the 24.8 million people who played golf on the course in 2020, an additional 12.1 million people participated in “off-course golf activities,” including driving ranges, venues like TopGolf, and indoor simulators like FullSwing. To generate.
The ongoing fusion of traditional golf sports with technology and other forms of entertainment is a good precursor to the sport’s progress, Abrutin said.
The biggest golf event was attended by more viewers this year. The average CBS viewership for the final round of the Masters in April was 9.45 million, an increase of 69% from 2020. The final day of the PGA Championship in May averaged 6.58 million viewers, an increase of 29% over the previous year. And the average number of viewers at NBC in the final round of the US Open in June was 5.7 million, an increase of 76% from 2020.
Sports are also seeing coverage expanding in new ways. The PGA TOUR is working with Netflix to create an episode documentary series modeled after “Drive to Survive,” a series focused on the popular Formula 1 that has driven new fans into motorsport. Stephen Curry, an NBA star and passionate golfer, has recently signed a deal with Comcast NBCUniversal to work on a variety of projects, including creating content for the Ryder Cup on NBC Sports’ golf channel.
“Many people have tried golf and found that it wasn’t as difficult as it sounds, which would have spawned a particularly young generation of golf fans, who would now become fans and engage in sports,” he said. Told. Said. “It’s especially exciting for anyone involved in the golf business.”
Disclaimer: CNBC’s parent company, NBCUniversal, is a Ryder Cup broadcast partner.
Callaway, Dick’s Sporting Goods Score As Golf Grow
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