The COMING golf ball wars - golf industry

Golf Digest, Feb, 1999 by Mark Seal

With four new manufacturers entering the fray, the competition and the hype for the most personal piece of golf equipment the ball-is certain to intensify. The insurgents are storming the gates and the longtime industry leaders are plotting to aggressively defend their turf. How will it all sort out-and what will it mean to you? We go inside the competing camps to find out.

Keep an eye on your golf ball: Forces are plotting to snatch it up and replace it with one of their own.

The blustering gods of contemporary golf equipment have come to wage an angry battle over the heart and soul of your game. It's a clash of wills and egos that golf has seldom seen. Callaway demands that you try its "pleasingly different" new ball; Taylor Made is doing its damnedest to dazzle you with its new ball's "revolutionary" feel; Nike seeks to seduce you with its Swoosh-all while the established market leaders, Titleist and Spalding, are screaming, "Get back to your game and they'll all go away!"

The Ball Wars have begun. This is no fantasy, but a scenario that will play out in shops, golf courses and in the media this year and next. It will be a war of Eastern tradition versus West Coast insurgency. In their attempt to make you switch or stay, the ball companies will be dispatching their foot soldiers, strafing your synapses with in-your- face ads and littering your clubhouses with marketing campaigns. Will you abandon your beloved, traditional brand-for which you've developed an attachment bordering on fanatical obsession-to try the new balls, or would you rather fight than switch?

"Ultimately, no matter what the brand loyalty is, if you build a better mousetrap, people will come," says Chuck Yash, president and CEO of

Callaway Golf Ball Company, one of the ball-business interlopers betting that you'll at least give their products a whirl.

You may be asking, "Why such sudden interest in balls?" The answer is, of course, money. Balls are golf's most lucrative commodity, with an estimated profit margin of 50 to 75 percent. They're also golf's only expend-able product, literally the food the game gobbles up in astonishing quantities. The annual U.S. retail market represents an estimated $650 million in sales, $1.5 billion worldwide-the biggest business sector in golf equipment, along with golf clubs. Balls are a mouth-watering commodity for public-industry conglomerates, especially those suffering the current malaise in golf-equipment sales. For some of these companies, it's not enough to satisfy the golfer; they must also satisfy shareholders, the droves of investors baying for growth, for extension of the company brand.

But re-inventing the golf ball is radically different from making golf clubs. The U.S. Golf Association's regulations on balls are strict and getting stricter. Costs are exorbitant-the Callaway Golf Ball Company estimates its start-up expenses at $150 million-and the industry is fraught with famous failures. "The market's already saturated," says Gene Parente of Golf Laboratories Inc., an independent testing firm in San Diego that sees many of the game's innovations well before the public. "My opinion is that companies are going to have a bloodbath on their hands."

This is the story of an already bloody war. It's a war of corporate espionage and pre-emptive strikes, executives and R&D wizards ricocheting between tantalizing new jobs, secret laboratories filled with Ph.D. polymer chemists and rocket scientists seeking to unlock the riddles of aerodynamics and dimple patterns. It's a war involving most of the barons of golf equipment, some content with capturing a specific niche of market share, others determined on dominating the original orb, the basic commodity of the game.

Behold, the wolves . . .

"Welcome to Fairhaven, a place as good as it sounds."

These are the words with which Walter R. "Wally" Uihlein (pronounced U- line), chairman and CEO of Titleist, welcomes you into his office in Fair-haven, Mass. To Uihlein, Fairhaven is indeed a town as good as it sounds, a small, smokestack-dotted, quintessential New England hamlet where Herman Melville set Moby Dick and where, Uihlein likes to joke, "We keep Captain Ahab's leg in a freezer." If the leg existed, Titleist would surely own it, so solidly is the company entrenched in the town and its thinking. After an hour or two inside the Titleist compound- touring its eight facilities, including three ball plants, totaling 800,000 square feet, with Wally and his minions; hearing Titleist sales leader Joe Curtis say, "Our reps eat, drink and sleep this job"; listening to the company "associates" and officers pledge absolute allegiance to the Titleist flag-you can almost imagine God decreeing Titleist the industry leader and Uihlein walking through the streets of Fairhaven with a tablet bearing the commandment, "Thou shalt have no other ball before thee."

Wally Uihlein personifies Titleist, whose employees are called "associates" and where company life is called a "culture." Celebrating 50 years as the global leader in golf balls, Titleist is the most played ball on the PGA Tour (see accompanying story). The company's products are backed up by a highly motivated sales organization, whose "Pyramid of Influence" hits its targets-tour pro, club pro and amateur- with un-flinching accuracy.