2001: Business - Stunted growth sparks debate

By SCOTT KAUFFMAN

With golf’s popularity at an all-time high, it is difficult to fathom that participation in the game could be stagnant.

But numbers do not lie.

In 2000, the golfer population in the United States topped out at 26 million-plus – a number that has remained virtually unchanged since 1997, according to a new study from the National Golf Foundation.

Though the game did gain nearly 2 million players between 1996 and 1997 – from 24.8 to 26.5 million, the so-called Tiger Woods spike – that has provided little consolation for the industry. Compared with a peak of 27.8 million in 1990, participation is down 4 percent.

Which raises the question: Has golf maxed out?

The new report by the NGF, a Jupiter, Fla.-based research association, has prompted some in the industry to consider that possibility. But most adamantly disagree with the notion, and optimistically talk about an untapped “latent demand” of roughly 40 million potential golfers.

Such interest may exist, but there are no guarantees that an expressed desire to play golf will necessarily translate into participation. Furthermore, the golf industry, comprised of various factions with their own agendas, historically has had little success developing any consensus solution. Instead, a slew of disparate approaches have been tried with mixed results. Now, the NGF report has sparked a new round of debate and elicited even more suggestions, including a call for a national growth initiative and a “czar” to run it.

“We need a coordinated, unified, national effort if we’re ever going to get over the 30 million mark,” said Greg Hopkins, president of Cleveland Golf, the Cypress, Calif.-based club company. He called for a branded program that would be marketed nationwide and enlist the help of municipalities and parks and recreation departments to provide accessible, beginner-level courses.

“There may be some good local initiatives out there, but a patchwork approach is going to produce insignificant levels of growth at best,” Hopkins said. He applauded PGA Tour commissioner Tim Finchem’s Golf 20/20 effort – a newly formed industry coalition studying growth proposals – but said a national program needed a full-time boss.

“I give Tim Finchem a lot of credit, but he has a tour to run,” Hopkins said. “We need somebody to be the ‘grow-the-game’ czar. The closest thing we have to that is Joe Barrow, who is doing a great job with the First Tee. That’s the kind of national program I’m talking about, but it’s too limited in scope.”

But other industry executives weren’t as concerned about growing overall participation numbers. In fact, some suggested that it was possible that the total number of golfers had reached its peak.

“There’s only so much interest out there, and if you combine other factors such as cost and time and other leisure activity choices, maybe we have maxed out. I don’t know the answer,” said Mark King, president of TaylorMade-Adidas Golf. “That’s why I don’t think our challenge is to grow the 26 million number. We need to grow the number of avid golfers. If we can get the casual golfer who plays one, three or five rounds a year to become an avid golfer who plays 12, 18 or 24 rounds a year – that’s what will make a difference.”

The majority opinion, however, maintains that golf has yet to reach its growth potential.

“Absolutely not,” said NGF president and CEO Joe Beditz. “It’s based on data. We just need to do a better job of retention.”

According to Beditz, by converting just a fraction more of the golf-interested public, it could mean another 15 million to 20 million new golfers over the next 20 years, based on 3 percent compounded annual growth from a base of 26 million.

“With a little action and the latent demand, it’s achievable,” he added.

Beditz and others continue to be buoyed by this untapped pool first identified two and a half years ago in a report published jointly by the NGF and McKinsey & Co. It defined latent demand as nongolfers interested in trying the game, former golfers who would like to come back to the game and current golfers who have the desire to play more. New research efforts now under way by Golf 20/20 also is confirming the existence of this demand, according to Ruffin Beckwith, World Golf Foundation’s senior vice president. The WGF oversees the 20/20 growth initiative.

Beckwith said results from the study will be presented to the Golf 20/20 steering committee in September and unveiled to the general golf industry at the second 20/20 summit in November.

“The glimmer of hope,” said Beditz, referring to the recent NGF report and preliminary results from the 20/20 study, “is there is no drop off in a bad economy. Avid golfers (those who play 25-plus rounds per year) are still edging up; beginners are still coming to the game and latent demand is still there.”

The fundamental difference between the latent demand information from the NGF/McKinsey study and this year’s 20/20 research effort is “we’re learning a lot more about the latent demand,” Beckwith said.

For example, after initially canvassing 100,000 households, the 20/20 project is conducting four in-depth, follow-up studies with four different segments of respondents, groups such as the avid golfer and the former committed golfer who now is just an occasional player.

“What’s important is what we do with it,” said Beckwith.

One of the main things that needs to be done is a much better job of marketing, according to Jim Koppenhaven, president of Pellucid Corp., the Buffalo Grove, Ill.-based firm that is conducting a new in-depth analysis of the golf market.

“Latent demand just doesn’t jump into your door,” said Koppenhaven, a former longtime executive with Kraft Foods. “Golfers are consumers; that’s what they (golf operators) don’t understand. . . .

“We’ve got to focus on our programs of retention and we have to know who we already have. There are lots of golf operators who have bought point-of-sale systems in the past couple years to track inventory and golfers. From there, you can put together a pretty compelling retention program.”

One industry initiative that has shown positive results is American Golf Corp.’s Nike Learning Centers.

The $149 program provides a comprehensive introduction to the game, six hours of lessons, five rounds of golf, a U.S. Golf Association videotape and other goodies.

David Pillsbury, company co-CEO, has 51 centers at American Golf-managed courses throughout the country; he hopes to have 100 by next June.

“We’re having just incredible success,” said Pillsbury, a board member of the NGF as well as a member of the 20/20 Steering Comm-ittee. “We’ve created close to 20,000 new golfers. Golfers we track and know. . . . At some of the mature centers that opened three years ago, up to 1,500 new golfers a year are being created. Of the 20,000 golfers, 75 percent in the next 12 months will play 10-25 rounds. We thought it would be 50 percent.”

That’s one reason Golf 20/20 adopted the model as a guide for its ongoing pilot program being conducted in Raleigh, N.C., this summer.

“The interest in golf right now is unprecedented,” Pillsbury added. “What we need to do is create a safe entry point. One of the key things in creating new golfers is it’s tedious, hard work. We live in a world where you want instant success. We just need to be very patient and focused because it will work.”

– Gene Yasuda contributed to this report

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