Prior to joining Golf Datatech, LLC in 1999, John Krzynowek spent over 13 years in executive marketing positions with golf equipment companies such as Spalding / Top Flite and Tommy Armour Golf. John has extensive background in consumer marketing and research, having spent much of his pre-golf industry career in brand marketing with package goods leader Cadbury-Schweppes. He has an MBA from Babson College and lives and works in the Chicago area.
THE KRZYNOWEK STORY
I’ve been in and around the world of golf since I was very young, starting to play at 3 years old, playing tournaments since 8. I caddied, worked in and around pro shops, played competitively around the country in college and amateur events — until I burned out, gave up the game completely for a few years after college, and focused on going to business school and getting my MBA. After working in traditional consumer marketing and gaining a lot of great experience, I decided I wanted to get back into golf, this time on the business side. I was living in New England at the time, and we had some great options available career wise, with Spalding, FootJoy, and Titleist all in Massachusetts. I focused on those companies and ultimately received offers from two in 1985, joining Spalding in marketing, before being promoted into General Management, running the P&L for the Golf Club Division. Being back in and around the game fanned the flame of competition and I got back into playing tournaments, and my passion for the game and the business was reignited.
I’d say — 6. The game is doing a little better than treading water at present.
For a number of years the major golf organizations were promoting golf as if no real demographic changes were happening. Then the Great Recession happened and even for a short time after that there was nary a word on the transformative issues at work. Clearly courses are closing and are outnumbering openings. You also have Millennials not truly embracing the game, thus far, as Baby Boomers have. Have to ask — even if you need to simply speculate — were key golf organizations in simple denial or were they aware but simply choose to ignore the changes that were happening?
I don’t know or have an opinion about what others motivations are or were regarding they presented the world of golf. You would have to ask them for their reasoning. All I can say with certainty is that we at Golf Datatech have always attempted to present the facts in the cold clear light of day, not attempting to skew the data or the narrative in one direction or the other. We are highly data driven, and we report on what the data shows us, and we attempt to help understand the world of golf retail/consumer opinions based upon what the data indicates.
How do you see golf faring in terms of how the overall product is positioned from a course perspective? Clearly, there are movements already afoot in reshaping how golf courses sell their product via combinations of holes that can be less than 18-holes.
I don’t believe there is a single “silver bullet” that will solve all of golf’s issues. And that is not a knock on golf. In the world we live in today, we have complex issues to deal with, and there are very rarely single answers that will “fix” most problems. In certain locales, “pay for play” by the hole might work well, in others it’s less feasible. “Short courses” where tees are pushed far forward are a great way to get beginners and those who struggle with full length golf courses to play the game and have fun, however many traditional courses and players frown upon changing their course to accommodate those who are less skilled or new to the game.
Creating a more easily accessible sport is always going to be challenging, as bottom line, golf is HARD. Very few people are able to just pick up a club and be proficient in a short period of time. It takes practice, it takes lessons, it takes commitment, and in this world where quick and easy success in any activity is preferred, golf by its nature isn’t for everyone.
I have heard from some leading figures in golf that the overall health of the American golf course supply chain would be helped considerably if no less than 25% of the total market were to disappear — thereby strengthening those facilities that remain. Your reaction to this?
While this is frequently espoused by some in the industry, who decides which of the 25% of courses disappear? I might prefer to see your course close and my course stay open. And you would want my course to close, and yours to remain open. Bottom line, the free market needs to create winners and losers. While it’s likely true that we still remain in an over-supply situation on a macro basis, running golf facilities is a local decision. And we may be overbuilt by 10%, 20%, 25%? Only time will tell, and those that cannot compete will either adapt or disappear.
You also have new entrants such as Topgolf and Drive Shack providing a clear entertainment function in tandem via a golf experience through a revamped driving range concept. Do you see these efforts translating into people actually moving towards more traditional golf in the years ahead or will their experience simply be that of going to alternate golf options such as simulators and the like?
I don’t know of any definitive research to indicate that these non-traditional venues are creating golfers, however there is no doubt that exposing young people (which is the primary target) to the sport in any and all ways is a positive overall. While the typical person you might see at one of these locations on a Friday night isn’t likely to be teeing it up on Saturday morning at 5:30 am, being exposed to the basics of hitting a ball and trying to guide it to a target provide a great entree into the game. Only time will tell if these alternative golf venues help develop golfers, however in the short term the positive rub off is that golf is perceived as being “cool” again by younger Americans, who up until the past few years had seen it only as a sport for “old people”.
You highlight in your report golf equipment sales — especially the rise on the irons side for 2018 — in tandem with overall gains the last three years from 2015-18. But the bigger question is just who is buying the equipment? Is it aging Baby Boomers? And what happens when they fade from the scene in 10 or so years will Millennials completely replace their purchasing power?
Certainly Baby Boomers remain a significant part of the equipment purchasing equation, however they’re not alone in buying new golf equipment. Our consumer research shows vitality across all the various age groups, though it is fair to note Millennials at this moment in time do not appear to be entering the sport quickly enough to offset Baby Boomers leaving over the next decade. That said, a more accurate predictor of retail purchases in the short term can be found in Household Income. The data suggests those who are at the higher end of the economic spectrum, and those who generally speaking have done better in the recovery post Great Recession, are much more likely to be spending on golf equipment.
The equipment companies routinely rollout new products frequently — even if the “improvements” are debatable. Does such efforts simply cannibalizing earlier club lines and what impact does this have on future purchase by buyers financially strapped to continue to rapidly keep changing clubs?
Some new product introductions feature greater improvements than others, but overall the quality and performance attributes in new equipment over the past several years have been substantial, and someone that has been out of the market for several years would be quite happy and satisfied by the improvements they would immediately see in new clubs. Also, it’s worth noting that a “typical” Serious Golfer buys a new driver once every 3-4 years, a new set of irons once every 4-5 years (Casual players buy far less frequently)…so while the media focuses a lot of attention on the year to year changes in product, the real impact to the consumer only happens when they buy something new, and over these extended purchase time frames (3-5 years), there are substantial improvements made.
However, while the products themselves are significantly improved over a multi-year time horizon, the prices of these products has increased markedly over the past few years, and due to these increases we have seen some lengthening in the planned purchase cycles for new products, even among very Serious Golfers. One of the reasons golfers are paying more is the advent and expansion of the Club Fitting Specialists segment of the Off Course Specialty channel, where golfers are fit utilizing launch monitors and the process is highly data driven. What’s interesting is that even though the cost associated with this custom fitting is significant, the satisfaction level of the golfer being fit is very high. In other words, “it’s not cheap, but it’s worth it”.
You mention in your report the top five golf markets globally are the USA, Japan, South Korea, United Kingdom and Canada in that order. Which countries are showing the fastest growth indicators?
Long term, almost all developed countries are working under similar constraints, as golf is a mature sport virtually everywhere it is played, and every country is trying to replace their aging golfers with younger golfers, who are not taking to the sport at the same rate as the older golfers who are leaving. South Korea is unique among the top five markets in that the actual number of golfers who play on a golf course is relatively small compared to the number of golfers who play on simulators. So while South Korea has a somewhat small base of traditional golfers, these “Screen Golfers” (Simulator players), actually buy a lot of equipment, particularly golf clubs, as well as apparel, and are a vibrant part of the overall golf equipment sales.
How do you see golf faring from both a participation and equipment purchasing side in such large sized countries as China and India respectively? Can golf truly spread throughout the respective general populations given the associated costs tied to the playing of the game and the roll those governments play in such efforts?
Both India and China are potentially massive golf markets, however they have structural and cultural issues to deal with before they can take their place on the world stage in golf. China is the ninth largest golf market in the world, however their participation rate is negligible. Both countries have large, growing middle class segments of their society, which typically might find golf to be an enjoyable outlet, however in China the government has not been supportive of the game, and without support from the top, nothing of substance will happen in China.
Given your findings – what do you see as the biggest short and long term challenges facing the golf industry?
Cultivating new golfers, particularly those in the younger age segments. You could write a book — a very thick book at that — about the number of ideas for “growing the game”. I don’t know which ones will work, and, as I mentioned earlier, there is no single plan that will “fix” the issue, but more likely be made up of a mix of multiple ideas.
Second, getting golf course supply and demand back into a state of equilibrium — there’s no doubt more courses than we can support with the current number of golfers. We either have to increase the number of players, or reduce the number of courses, or perhaps both, to find a status quo that leaves the industry healthy.
Finally, I believe in the long term, golf needs to continue towards a more environmentally sound platform. Don’t misread me, I believe the game has come a long way over the years and is far more environmentally friendly than it once was, however, as time goes by, the population rises, more stress will be placed upon golf facilities to be environmentally good partners.
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