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At the 2021 TOUR Championship, buckets of golf balls were on display at the East Lake Golf Club, Atlanta, Georgia. Getty Images
In 2020, golf popularity soared by almost every metric as people sought to enjoy the outdoors in the midst of the pandemic. According to the National Golf Foundation, more than 24.8 million Americans played golf in the United States in 2020. This was an increase of over 2% year-overyear and the largest net gain in 17 years. In addition, the sport saw the highest percentage increase in beginners and youth golfers ever since 1997 when Tiger Woods, then 21, won his first major championship at The Masters. It's been almost two years since the pandemic struck the U.S. and while other activities have resumed, golf has seen its growth in 2021. This has given long-standing brands such as Callaway and Titleist an extra boost. Companies looking to capitalize on changing demographics and trends in the sport have also been benefited.
Continued golfers flock to the courses
Many in the golf industry were unsure if the 2020 growth was due to the pandemic or a new inflection for the sport. According to the NGF data, the peak of the U.S. golf season was at the end of July. The number of rounds played in 2021 increased 16.1% over 2020. The July figures are down 3.1% compared with 2020. This was a month when almost all of the golf courses were reopened after pandemic closures in some states. However, 2021 numbers are much higher than the previous year averages. These increases are primarily driven by passionate, older golfers. In 2020, the average number played by golfers rose to 20.2 rounds. This is an all-time high ever since NGF began tracking this statistic in 1998. However, younger players, especially female golfers, saw significant rises. On August's second quarter earnings call, Acushnet Holdings CEO David Maher stated that "new participants are increasing younger; they're addicted to the game and want to improve." "A lot of this energy comes from passionate dedicated players who are simply being more consistent and playing more; more juniors and more women, and more young [players] and more families." According to NGF data, the number of female golfers increased by 8% in 2020. This is the highest increase in five years. According to NGF data, 44% of those who played a round on a golf course in 2020 were younger than 40 years old. Nearly the same number of people in their 30s and 60s played golf, as did the 40% of people over 40.
Sales of golf equipment companies are growing
Acushnet, the owner of FootJoy and Titleist golf brands, has seen a rise in new golfers. Acushnet's U.S. second quarter net sales grew by 117.1% due to a 98.1% rise in Titleist golf balls sales and a 11% increase in Titleist club sales. Sales in the U.S. increased by 75.2% during the first half 2021 fiscal. Callaway, which is the owner of several brands of apparel and golf equipment including its eponymous brand of balls, clubs and other equipment, also saw growth. The company's financial outlook for the third quarter and the entire of 2021 was raised earlier this month. It cited Callaway's brands' performance as well as the mitigation of supply chain disruptions. Chip Brewer, Callaway CEO, stated that more people are playing golf, there are more players and more consumers, and that the long-term trends will be very attractive. "The market will be bigger coming out of the pandemic than it is coming in," Chip Brewer, Callaway CEO, stated on CNBC in June. Dick's Sporting Goods sells golf products in both its stores and at the golf-specialty retailer Golf Galaxy. The company has highlighted golf as one of its key growth drivers in recent quarters. On August 25, Dick's Sporting Goods' CFO Lee Belitsky stated that the company has seen consistent growth in its golf business. "The golf business remains very strong for us." The company doesn't break out the performance at Golf Galaxy stores in its earnings reports, but Lauren Hobart, CEO of the company, stated that the "golf business" has been phenomenal at both Dick's Golf Galaxy and Golf Galaxy. Hobart stated that the company "invested heavily in talent and raised the quality of its in-store services to become trusted advisors for golf fans of all levels." The company recently opened its first prototype Golf Galaxy store outside of Boston. The Golf Galaxy Performance Center is where golfers can shop for products and also take lessons. They can also practice hitting in the hitting bays and get custom fittings. South Korean private equity firm Centroid Investment Partners bought TaylorMade Golf in May for $1.7 billion. This was the largest acquisition of golf goods to date. Adidas sold TaylorMade in 2017 to KPS Capital Partners for $425 million. TaylorMade produces apparel, clubs, and balls. Jinhyeok Jeong (founder and CEO of Centroid Investment Partners) stated in a press release that the industry was experiencing high demand and increased participation. The transaction also offers strong long-term opportunities. South Korea is third in golf market worldwide, behind Japan and the U.S. According to NPD data, sales of golf equipment have declined in recent months. Sales in June, July, and August 2021 were down 2% compared with 2020, after the first half 2021 doubled the amount seen in 2020. The June, July, and August 2021 sales numbers have increased 50% over the same period in 2019. Matt Powell, a senior industry advisor at NPD Group, stated that more people will embrace healthier living after the pandemic. This will lead to a rise in outdoor and sports activities which should be good for golf. It is not clear how other industries' supply chain problems will affect golf equipment. This could hinder growth. Both Acushnet executives and Callaway executives cited Vietnam's ongoing supply chain problems as potential roadblocks. Both Acushnet, Callaway declined to comment on this article. Powell stated that although inventory issues exist, business has plateaued in most of the categories we track. "But, [golf sales] have reset at a higher level. While we aren't getting huge growth, it is a much larger business than it was two-years ago."
Golf expands beyond the course
