It is not unusual for a major manufacturer to decide to skip the PGA Merchandise Show. It has happened before, and likely will happen again. But the industry’s annual celebration of the game’s best new products and the rocket-ship jump start to the golf season is still attended by tens of thousands of golf’s leading influencers, from PGA professionals to business leaders and worldwide media. So when TaylorMade made the decision last fall that it would not be attending the Show, many were curious whether it was a cost-cutting decision or, perhaps more tellingly, where the future of one of golf’s iconic brands might be headed. In an hour-long conversation, TaylorMade CEO and president David Abeles was relentlessly ebullient about the strength and resurgence of his brand, eager to redefine the relationship between golf companies and their customers and frank about why his company is spending PGA Show week 2,500 miles away from Orlando back at the home office in Carlsbad, Calif. Here are some highlights of that conversation:
Golf Digest: Your business seems to be seeing some momentum after finding your way through some weeds. What have been the fundamental changes?
Abeles: Back in 2015, when I came back to the company and into this role, candidly, our company was not in a position that was as strong as we were accustomed to experiencing. We had good products, but if you want to win at golf, you have to have exceptional products. I don’t think we retained the value in our brand in front of golfers the way it deserved to be, especially given the investment we were making in new products. And, I think we were solving some of the internal challenges by throwing resources at them, as opposed to rethinking what the modern-day approach for the company could look like. It was all reconcilable, but it would take real strong discipline to get TaylorMade back in the position that we’re currently enjoying today. But we put a stake in the ground, and we’ve made no compromises in terms of the investments we’re making in new technology, which ultimately will lead to better performance. Four years later, I think the perceptions around the growth of our business are misunderstood because we’re not publicly traded. But we’ve tacked on just under four percentage points of global market share in the equipment and golf ball markets over the course of the last 24 months. And each point of share on a global basis is worth roughly $45 million to $50 million. While many of our key competitors who publicly report their numbers have had a good run, I think our growth has actually outpaced them. We really just don’t talk about it because we don’t have to anymore.
TaylorMade’s new P760 iron
GD: Are you saying you believe your company is back to where it was in its heyday?
Abeles: Yeah, I actually do—and if I don’t, then we have a real problem. I think the TaylorMade business and product line is in a better place right now than it has been in our 40 years of business. No. 1, we’ve reinforced the authenticity of our people in our culture to the game of golf, which then enables us to make better decisions for the golfer. No. 2, we’ve invested more in advanced technology than we ever have in the history of the company. I believe the greatest breakthrough in metalwood technology in our company’s history is happening right now. Your ability to reverse engineer a metalwood past the legal limits of CT as well as COR, and actually be able to tune it back right to the legal limit is pretty spectacular. One, it’s never been done before, but two, actually to build the process of production capabilities might be more impressive than even the performance of the product. Think about the precision of making that many clubheads and being able to do that.
GD: Of course, signing Rickie Fowler to a ball and glove deal this week was a major move for your brand, too.
Abeles: Well, it’s part of the last piece of what we’re doing in terms of inspiring the world’s best players to play TaylorMade. As you know, we’re operating in a very different strategic sports-marketing environment right now. Our goal is, and always has been, that if we make the best performing products in the world, then the very best players in the world will choose to play TaylorMade. When I think about Tiger Woods making the decision to come to TaylorMade and Rory McIlroy, obviously, Jon Rahm and Dustin Johnson, and now Rickie Fowler, it’s incredible. We’re clicking on all cylinders right now. We’re not perfect, we’ve got a lot of things we’re going to continue to work on, but we are definitely in my opinion in the best position this company’s ever been.
GD: Certainly, an important part of that foundation for a turnaround was your acquisition by KPS Capital Partners in October 2017. What has that relationship netted TaylorMade?
Abeles: The first 15 months have been really terrific. Being privately held, being part of the KPS portfolio enables us to make the right decisions for the company long term, and KPS is invested in TaylorMade to ensure we create value long term, regardless of how long their hold period might be. KPS brought capital resources to invest in things that we’ve talked about, but also, operational expertise to help us build these incredible new technologies that we will continue to build on beyond 2019. They’re no strangers to building complicated products. They’ve got a world-class operations team, and a world-class engineering team that is part of that operations team is now working hand in hand with our engineers to ensure we can find efficiencies and better processes. They’re good people, and there are golfers in the firm who understand the specialization of our category and the importance of the authenticity of this brand, and that has enabled us to make decisions that are required for the benefit of TaylorMade, so it’s been great so far.
GD: So given all that success and given that the PGA Show is an opportunity to very publicly present the strength of your brand, why wouldn’t you want to take advantage of that opportunity?
Abeles: We made that decision based on a couple fundamental reasons: One is we truly believe the projected invested dollars we would have made in the PGA Show in 2019 would be better spent directly with golf professionals in the PGA of America than down at the Show this year. So what’s going to come out of our office here is an explanation over the next couple weeks, as to where we are investing the expense that we used to incur at the PGA Show. We are reinvesting and doubling down on what we call our TaylorMade experiential program, which is where we’ll conduct 4,000 events around the country each year to give golfers the opportunity to experience every product in our line and see the data for themselves through an experienced, highly trained technician. The other thing we’re doing is that we’re going to conduct over 100,000 golf ball fitting sessions in 2019. In addition to that, we’re working closer with the PGA of America and we’re going to add roughly 20 percent more TaylorMade Golf PGA of America staff members to our team this year, roughly 400 more staff members to our team. We are magnifying our investment in those areas by not coming to the PGA Show. Those programs will directly benefit golf professionals, their members and golfers differently than we have in the past. I’ll always be a fond advocate of the Show, but it is not the best vehicle for us right now to address the needs of our customers or address the needs of golfers. Or even launch our products, so we’ve taken the year off and we’re going to invest in these other areas and see how tangible the impact will be for our company.
GD: But don’t you miss the chance to maybe get all the attention that only the PGA Show can bring to your brand?
Abeles: The PGA Show in the convention center is essentially a two-day show. So when I think about how we create energy and excitement in a two-day period relative to the other 363 days that it takes to run a business like ours, you know the weight is clearly in favor of what we need to do for the other 363 days on a daily basis with our customer base and with golfers to inspire them to play the game of golf and to try and buy TaylorMade products. I’m very confident that we’ve created environments for our customers outside of the PGA Show that can tell our story, that can express our pride and appreciation for the work we’ve done together and can emphasize the success and momentum that we’ve built at our company. Candidly, I don’t think that needs to be done at a Show with 100 other brands.
GD: When you talk about how much progress in performance your R&D team is making, you have to have in the back of your mind what the USGA might be thinking. Are you concerned about the potential for rollbacks from the rulemakers?
Abeles: We are crystal clear that the game of golf is in a much better place right now than it was even a couple of years ago. Golfers want to see Dustin Johnson hit 350-yard drives and shoot 15- to 20-under par. That’s exciting, it’s inspiring. And it’s less inspiring to see the best players in the world struggle to make par on a golf course. The more difficult we portray the game, the less likely it will be for people to enter the game. The best players in the world should be breaking par at golf courses of every style, and the back nine at Augusta is a perfect example to me. One of the reasons, among many, that the Masters is one of the most exciting sporting events in the world is because you can have a player make up a four-shot deficit on that back nine by making a couple of eagles and a few birdies coming in and win that golf tournament. And he’s not doing it because it’s so easy. He’s doing it because he’s got incredible skill, he’s got wonderful products that help him play better and they perform on the world’s greatest stage. So we want to see the game continue to be more approachable, more friendly, easier to play, and our role in that is to make sure that the equipment that comes to market helps golfers get there. I hope the governing bodies will adopt that, and recognize that that inspiration, that aspiration from amateur athletes to professional athletes, is central to what makes golf go. We don’t believe that rollbacks or bifurcation are good for the game of golf, and we are crystal clear on that. All we’ve ever asked is that we have a seat at the table to express our opinion as to why we’re against it. I hope we will get that chance at some point in time beyond simply a questionnaire or a short interview. Because I think the key constituencies in this industry, there’s a lot of talent and a lot of intelligence that really want to put golf first and put golfers back into the game or get new golfers into the game. It can’t be in an isolated manner. You have to understand multiple perspectives before you can make any decisions.