Perhaps more than any other sport, golf has a way of putting those who play it in difficult positions. A bad lie here. A bad bounce there. A debilitating bout of the shanks. But the game also teaches people how to deal with adversity and overcome those sorts of situations.
So, it would not be unfair to think that the individuals who make a living in golf are better equipped than most to handle all that the pandemic has thrown at them. Especially when it comes to the ways that COVID-19 has disrupted the global supply chain.
But who in golf could have truly been prepared for all that has transpired over the past 22 months?
Because of plant closings, shutdowns of entire container terminals and massive ship logjams at ports on both sides of the Pacific Ocean, it can now take as long as 100 days for a company to transport products from a plant in China to a distribution center in the United States. That is twice the usual time.
In addition, labor shortages have so stressed the loading and unloading processes that what used to be a three-to-five day endeavor to get containers full of shafts or driver heads through one of the major American ports is now in many cases a three-to-five week ordeal. Which is why the waters off of Los Angeles and Long Beach, California, are nearly as jammed with freighters these days as local highways are with cars. It’s the same with those up and down the Asia coast, from Korea to Thailand, as ships look to take on cargo so they can be on their merry ways.
“It feels like we have had three or four once-in-a-lifetime challenges happen in less than two years.” – Adam Rowen, Golf Pride
Vessels have caught fire in the middle of the Pacific. Some have even sunk, while others have lost containers overboard during storms.
“That’s what happened to a bunch of golf bags we had ordered from Asia,” said Ken Morton Jr., the vice president of retail and marketing for Haggin Oaks in Sacramento, California. “Now, they sleep with the fishes.”
The delays that occurred in the wake of such calamities made it harder for the equipment makers to deliver product to their customers in a timely fashion. Even those outfits who depend largely on U.S.-based suppliers have not been immune from such troubles.
“When that deep freeze hit Texas last winter, it knocked a DuPont plant off-line for a while,” Morton said. “And that hurt companies who used materials from that facility for grips and golf balls.”
Dan Murphy is the CEO of Bridgestone Golf, which was one of the businesses affected by that Texas plant closing.
“This has been unprecedented,” Murphy said. “Which means there was no playbook for us to follow.”
Adam Rowen, the director of global operations for Golf Pride, agreed.
“It feels like we have had three or four once-in-a-lifetime challenges happen in less than two years,” he said.
Times most definitely have been tough, and the fact that these supply chain breakdowns are occurring during a stretch of epic increases in rounds played and historic demand for clubs, balls, shoes and gloves has in many ways made things more difficult. To paraphrase Winston Churchill, never have so many wanted so much when so little was getting through.
But the golf industry seems to have more than met the challenges.
Several companies posted record revenues and earnings in 2020 and will likely do so again when the books on this past year are closed. It also looks as if the increases in sales, profits and rounds played are going to continue for the foreseeable future, in large part because the golfers who started coming into the game in 2020 appear to be staying. And many of those who were already playing when the pandemic hit are teeing it up more often than ever before.
“In a strange way, COVID has kept these newcomers in the game by lasting so long,” said Casey Alexander, the managing director for equity research at Compass Point Research & Trading and a keen observer of the golf industry. “New golfers have a habit of dropping out after a year. But now they have just played a second year, and the better they get at golf, the more they will start looking not only to play more but also to buy new equipment.”
The biggest golf companies, specifically Acushnet and Callaway, have also been able to increase market share in multiple categories, primarily because they have smartly leveraged the sales volume and financial power that smaller, less well-capitalized concerns lack.
Retailers, both big box and green grass, are enjoying similar results.
“Last year was our best ever for merchandise,” said Brendan Walsh, the director of golf for The Country Club in Brookline, Massachusetts, host of this year’s U.S. Open.
Morton has experienced much the same thing. “It was a year for the ages for us, as well, in spite of all the difficulties,” he said.
While those across-the-board gains were fueled in many ways by the increases in rounds played and demand for gear, they were also the result of how well industry leaders reacted to the COVID-19 crisis.
“We did our utmost to communicate better with suppliers and customers,” said Mark Leposky, the executive vice president of global operations for Callaway. “And we worked hard to get our products into the hands of our customers in the most efficient ways possible.”
Companies that were used to operating on a just-in-time inventory basis (to keep costs down) built theirs up instead, to ensure there would not be future shortages.
Some, such as Golf Pride and Acushnet, began turning almost exclusively to air freight to bring in goods from the Far East. “It’s expensive, but much more efficient and predictable,” Rowen said.
“Rather than putting in one big order for drivers and then waiting to see when we might need to re-order, we have now been placing orders for successive months, so we can all plan ahead and have a better chance of having what we need when we need it.” – Ken Morton Jr., Haggin Oaks
Equipment makers also made a point of not passing along the added costs of doing business in this environment to customers. At least through 2021.
“We tried to be very respectful of our golfers in that regard, especially given how patient they have been with us,” Rowen said.
PGA club professionals such as Walsh adjusted, too.
“We are hosting the U.S. Open this summer and had to be sure we had enough U.S. Open merchandise for our members and guests,” Walsh said. “The first thing I did was start reaching beyond our usual vendors. Instead of having two or three for headwear, for example, we decided to work with four or five. Instead of four or five shirt makers, we went with seven or eight. And we went heavier on the orders in each case.”
Morton took a similar approach.
“Rather than putting in one big order for drivers and then waiting to see when we might need to re-order, we have now been placing orders for successive months, so we can all plan ahead and have a better chance of having what we need when we need it,” he said.
Alexander, for one, is impressed by how the industry has responded.
“Golf has done a remarkable job weathering this storm,” he said. “The people who have been running these businesses have proved to be real professionals.”
In the case of golf, the global supply chain is the route that products, components and materials take from the plants in which many of them are manufactured (largely in Asia) to the shops in which they are sold (mostly in the United States). Those journeys begin with goods being loaded onto ships at container terminals, followed by ocean crossings to busy ports at which cargo is unloaded and then moved by train and semi-trucks to U.S.-based plants (in the case of materials that may be used, say, in the making of a golf ball), as well as to distribution and assembly centers. In normal times, that process functions well. But when it breaks down, as it did in epic fashion in the wake of the pandemic that swept across the planet in early 2020, it can upset an entire industry. Especially one that relies so heavily on suppliers located halfway across the world.
The disruptions began when COVID started to spread in early 2020. First through China. Then beyond that land to the rest of Asia and eventually to every nation on the planet. As that happened, factories that were on the front end of the global supply chain in golf started shutting down. Those that managed to stay open struggled to find enough healthy workers to keep them running at anything approaching full capacity.
As time went on, those troubles started to spread to the container terminals in Asia where the ships about to make the trip across the Pacific were loaded – and then at the ports in the United States when the vessels arrived. The greater the number of closings at those facilities and the lack of people working in them, the greater the delays in getting materials, components and actual golf products to customers – and the greater the shortages of said goods.
At the same time, the price of getting these items across the Pacific jumped, in some cases as much as 30 percent.
Matters were only made worse by a massive surge in play on golf courses throughout the United States that started to take hold in the summer of 2020. As government lockdowns forced people to stay home and golf courses came to be regarded as “safe spaces,” there was a huge growth in demand for clubs and balls, as well as shoes and gloves.
Then came the emergence of variants such as Delta and Omicron just as things seemed to be returning to normal. COVID-19 had legs, it appeared, and so did the disruptions to the supply chain it kept causing.
As for when those problems might finally abate, many in the industry believe that is not likely to start happening until the second half of 2022, at the earliest, when inventories begin to fill up, demand for transportation starts to recede and workers are able to do their jobs without lockdowns, shutdowns or any other interruptions.
That’s a somewhat discouraging timeframe, to be sure. And it explains in many ways why a sense of weariness pervades as the industry gets set to enter year three of the pandemic.
But there are reasons to be positive, as well. Equipment makers expect demand for their products to remain strong through the coming year. They also believe the burdens of the past couple of years have made them better managers – and made them and their companies stronger for the work that lies ahead. And they feel sure even more players will come into the game, as those who picked up golf in the age of COVID-19 become more deeply attached to the sport.
All in all, golf has made quite a recovery.