Will be interesting to see what happens to Snell balls after TM acquires Nassau... Taylormade purchases Nassau Ball Company in S Korea? (MERGED)

[cardigan]

1 hour ago, willmillar said:

Foremost also makes the Maxfli Tour for Dick's Sporting Goods.  TM has several markets covered with these deals.

It's not clear that TM owns Foremost.  TM clearly says that they acquired Nassau but they only say that they have a joint venture with Foremost.  Very different than ownership of the whole company.

 

https://newsroom.taylormadegolf.com/en-CA/204041-taylormade-golf-acquires-nassau-golf-co-ltd

 

edit: Said the same a few posts above.  Thought that was in a different thread.  

Edited November 5, 2021 by cardigan

[Unibrow]

I by no means am a business expert, nor do I have any idea what TM end goal is, but if a company is cutting into your sales, buy them. Their  profit becomes yours. I believe that the DTC market is here to stay and grow, for both balls and equipment. Most of my bag is Sub 70, balls Vice, Cut and still have some Snell's left. I am not a tour level golfer so any minor tech advantages that the large companies have are lost on me. The DTC market is here to stay (unless they are acquired), I believe that in the coming years the big boys will start acquiring some of the DTC brands.

[Myherobobhope]

I think one of the big lessons recently has been that big corporations need to be in better control of their supply chain... as someone who is STILL waiting on Srixon to get in KBS C-Tapers, I think we will see vertical integration of supply chains happen more frequently... 

 

As for what it means for other ball manufacturers, I think that's an interesting question and I don't think we know enough about the numbers to draw any conclusions... but here is some wild speculation anyways, cause that's far more fun!

 

1. If resources are constrained (which I think we all believe to be true) it would be very easy for TM to basically monopolize all the urethane for their own ball production. They are going to make more selling their end product than whatever production fees they are getting from Snell... also means they don't suffer from lack of stock.

 

2. DTC brands don't make up a ton of the market, but they do have ardent supporters... This means that killing Snell could have some negative brand impact for TaylorMade. Whether or not they are willing to take the blowback is a different question...  TM is in the "cheaper" urethane ball market as well, so it might make sense to try to drown the Snell brand.

 

3. How much is the production of other golf balls worth? Would it be better to leave a plant with some excess capacity or is it better to make some extra money on the side? Oddly, I feel like the Kirkland brand would be a better match for excess capacity vs a company like Snell... Building a good relationship with Costco could have a ton of value for TM (basically replace Callaway as the in house brand, and have the ability to dump excess stuff as Kirkland branded)... Costco is also less dependent on regular shipments... just a crazy thought to add to the speculation...

 

My guess is we won't see any immediate changes... they probably have contracts and deadlines and will make sure to fulfill them... then the rubber will meet the road when they new contracts are negotiated... How much it impacts the cost of Snell (or Snell's profit margins) is to be seen... My guess is the biggest change is the negotiating position of both parties... The factory doesn't need to profitable on it's own to justify it's existence anymore, so it can change the math of how they negotiate contracts. 

[cardigan]

2 minutes ago, Unibrow said:

I by no means am a business expert, nor do I have any idea what TM end goal is, but if a company is cutting into your sales, buy them. Their  profit becomes yours. I believe that the DTC market is here to stay and grow, for both balls and equipment. Most of my bag is Sub 70, balls Vice, Cut and still have some Snell's left. I am not a tour level golfer so any minor tech advantages that the large companies have are lost on me. The DTC market is here to stay (unless they are acquired), I believe that in the coming years the big boys will start acquiring some of the DTC brands.

You don't just buy a company just because they cut into your sales.  The purchase has to make sense for your business.  Anyways, I would need to see some numbers but I highly doubt that Snell's sales come anywhere close to cutting into the sales of the big OEM's.  They are not well known outside of serious golf enthusiasts.  Limited brand awareness and limited distribution.  Growth is limited because of limited marketing.  Marketing costs money which "typically" results in higher prices for the product.  That's not to say that the DTC market is going away or that they don't make good products but very few come close to being any kind of threat to the big OEM's and most are just too small to even be on their radar.  Also, want you buy any company you have to support it to keep it going unless you are just buying it to get their technology, patents, intellectual property, etc.  What happened to Adams golf after TM bought them.

 

None of the above even gets into whether or not a company like Snell even want to to sell.  From what I've seen from things Dean Snell has said and written over the years, I get the impression that he wouldn't want to sell and even if he did sell, he would just take the money and walk away to work on some other venture.  Just my thoughts though.  I definitely can't speak for him.  Similar with PXG, I doubt their sales come close to any of the big OEM's but I don't think it would make sense for any of them to buy PXG and I highly doubt that Parsons would sell.

[Unibrow]

I agree with everything you said. I do believe that the rise of the DTC market has been noticed by the large companies, while right now they are not hurting them much, they may see an opportunity to get in on DTC or eliminate a future threat. My thoughts are nothing more than speculation, but the DTC market is growing, what it will become is anybody's guess. If golf grows so will DTC, DTC will be the first to fail if golf popularity declines. I am not a CEO and don't play one on TV, but I can recognize a threat to my financial well being.

[NRJyzr]

On 11/3/2021 at 7:19 PM, grm24 said:

 

Appears that TM had also purchased Foremost Golf Ltd 3 years ago. So TM has purchased Foremost and Nassau. Interesting.

 

https://golfweek.usatoday.com/2021/11/03/taylormade-nassau-golf-expand-golf-ball-operations/

 

TaylorMade acquired Foremost Golf Ltd three years ago and transformed it into TM Golf Ball Taiwan to complement TM Golf Ball South Carolina. With the purchase of Nassau Golf, TaylorMade is now forming TM Golf Ball Korea.

 

“This acquisition further supports TaylorMade’s strategic plan to create vertical integration in the company’s golf ball supply chain,” said David Abeles, TaylorMade’s chief executive officer. “TM Golf Ball Korea now joins TM Golf Ball Taiwan and TM Golf Ball South Carolina to service the global demand requirements for our rapidly growing golf ball business.”

 

I imagine it's possible they could be securing their sources, cutting a bit of cost.  In theory, it might allow them to make a run at the ball endorsement deal market?  

 

The last time they tried, such as I've seen reported, had the effect of Acushnet/Fortune Brands dropping pro endorsement to shore up the ball deal money.  Which saw TM pivot to driver tee money...

 

[dalehead]

TM has already entered the DTC market. By acquiring Nassau they are now Snell’s supplier, unless Dean Snell finds a different supplier. He could go to Foremost. Oh, wait, TM now owns Foremost. So it’s a small leap for TM to say “We’re selling balls to Dean Snell for $X, he marks them up by $Y and sells them to the consumer for $Z. Why don’t we just buy Dean out and keep the whole pie for ourselves.”

[cardigan]

1 hour ago, dalehead said:

TM has already entered the DTC market. By acquiring Nassau they are now Snell’s supplier, unless Dean Snell finds a different supplier. He could go to Foremost. Oh, wait, TM now owns Foremost. So it’s a small leap for TM to say “We’re selling balls to Dean Snell for $X, he marks them up by $Y and sells them to the consumer for $Z. Why don’t we just buy Dean out and keep the whole pie for ourselves.”

Taylormade financial statements probably aren't available because they are not a public company but you should take a look at some of the financial statements of companies like Titleist and Callaway to see their golf ball revenue.  You'll see numbers from $40 million to over $110 million... a quarter.  Tip of the cap to Snell if their revenue is enough to get a company like TM to think that they should buy them out.

[dalehead]

3 hours ago, cardigan said:

Taylormade financial statements probably aren't available because they are not a public company but you should take a look at some of the financial statements of companies like Titleist and Callaway to see their golf ball revenue.  You'll see numbers from $40 million to over $110 million... a quarter.  Tip of the cap to Snell if their revenue is enough to get a company like TM to think that they should buy them out.

Not under any illusion that Snell’s golf ball revenue is anywhere near Titleist or Callaway. But a smaller sales number also means a smaller buy out number. But I think a number could be agreed upon that would satisfy both TM and Dean Snell.

 

Look, I have no idea if a purchase of Snell by TM would ever happen. I’m just not dismissing it out of hand like many others here are.

[gioreeko]

3 hours ago, cardigan said:

Taylormade financial statements probably aren't available because they are not a public company but you should take a look at some of the financial statements of companies like Titleist and Callaway to see their golf ball revenue.  You'll see numbers from $40 million to over $110 million... a quarter.  Tip of the cap to Snell if their revenue is enough to get a company like TM to think that they should buy them out.

Taylormade bought out Adams golf, who had about $300 annual sales per year

[cardigan]

12 hours ago, gioreeko said:

Taylormade bought out Adams golf, who had about $300 annual sales per year

I don't think that worked out long term for TM or Adams but I understand if others disagree.

Edited November 6, 2021 by cardigan

[grm24]

14 hours ago, NRJyzr said:

 

I imagine it's possible they could be securing their sources, cutting a bit of cost.  In theory, it might allow them to make a run at the ball endorsement deal market?  

 

The last time they tried, such as I've seen reported, had the effect of Acushnet/Fortune Brands dropping pro endorsement to shore up the ball deal money.  Which saw TM pivot to driver tee money...

 

Ed a while back IIRC at the old 4GEA site we discussed the ball seeding money of OEMs. My question to you was then, as I know your feelings towards Titleist, is why didn't any of the other OEM ball manufacturers do the same? It's never been a secret that the ball count is important to the Titleist/Acushnet bottom line. I can't see TM (or Callaway) today all of sudden doing a ball deal , or ball, glove, shoe deals that Titleist still does.

 

Not to bring it back around but if Cally and TM thought their golf balls were superior performance wise why didn't they do it like Titleist? I mean Callaway when they first entered the ball market (Rule 35 balls) spent $170 million for a brand new ball plant only to close it down and then turn around later and purchase the TopFlite/Strata/Hogan portfolio/ball factory in Chicopee, MA? To this day Callaway can't get all of it's staff players to play their balls. Same as TM.

 

As for driver tee it up money many forget that in the late 90's/early 2000's that Callaway and TM had a driver tee it up money war. This was well before TM did it again later. The driver tee it up money at that time was nuts.

[grm24]

On 11/4/2021 at 9:53 PM, Drewhill44 said:

Dean has a history with TM when he worked for them and designed their golf balls when TM entered the ball market.  The Tour Preferred Red and Black are arguably some of TM best golf balls, which were designed by Dean.  I would expect nothing would hopefully change in regards to Snell golf balls being produced.  

Dean also was on the design team for the TM InerGel balls that were almost universally despised. The TM IngerGel plastic tube packaging also had some specious claims from Dean for its packaging regarding balls possibly losing up to 14 yards in distance vs cardboard sleeve packaging that is still in use today. Interesting article linked below (from 1999) for those that take the time to actually read it.

 

https://www.packworld.com/machinery/primary-packaging/article/13325590/can-packaging-improve-ones-golf-game

 

"The phenomenon of velocity loss over time has been downplayed by competitors over the last few years," says Snell. "But I can guarantee it's true." He claims that moisture absorbed by balls packed in conventional paperboard folding cartons over one year can shorten a drive by 12 to 14 yards.

 

The counterpoint to all of the above is Dean was also on the Titleist design team for the Pro-V1 balls.

[sevenfourate]

3 hours ago, grm24 said:

Dean also was on the design team for the TM InerGel balls that were almost universally despised. The TM IngerGel plastic tube packaging also had some specious claims from Dean for its packaging regarding balls possibly losing up to 14 yards in distance vs cardboard sleeve packaging that is still in use today. Interesting article linked below (from 1999) for those that take the time to actually read it.

 

https://www.packworld.com/machinery/primary-packaging/article/13325590/can-packaging-improve-ones-golf-game

 

"The phenomenon of velocity loss over time has been downplayed by competitors over the last few years," says Snell. "But I can guarantee it's true." He claims that moisture absorbed by balls packed in conventional paperboard folding cartons over one year can shorten a drive by 12 to 14 yards.

 

The counterpoint to all of the above is Dean was also on the Titleist design team for the Pro-V1 balls.

Interesting article.

 

12-14 yards loss is truly significant. And at this point of golf ball technology; would take a / some major breakthroughs to now gain an increase of that much. But more to the point: as so many of the top brands performance is so similar- a drop of that much would literally be a fall ‘Off the Planet’ performance wise compared to the competition.
 

So if true: makes you wonder why every (🤷‍♂️) golf ball you ever buy at retail [Including Snells] still sits on the shelf in cardboard packaging……

[elwhippy]

TM Innergel aka junk.

[NRJyzr]

5 hours ago, grm24 said:

Ed a while back IIRC at the old 4GEA site we discussed the ball seeding money of OEMs. My question to you was then, as I know your feelings towards Titleist, is why didn't any of the other OEM ball manufacturers do the same? It's never been a secret that the ball count is important to the Titleist/Acushnet bottom line. I can't see TM (or Callaway) today all of sudden doing a ball deal , or ball, glove, shoe deals that Titleist still does.

 

Not to bring it back around but if Cally and TM thought their golf balls were superior performance wise why didn't they do it like Titleist? I mean Callaway when they first entered the ball market (Rule 35 balls) spent $170 million for a brand new ball plant only to close it down and then turn around later and purchase the TopFlite/Strata/Hogan portfolio/ball factory in Chicopee, MA? To this day Callaway can't get all of it's staff players to play their balls. Same as TM.

 

As for driver tee it up money many forget that in the late 90's/early 2000's that Callaway and TM had a driver tee it up money war. This was well before TM did it again later. The driver tee it up money at that time was nuts.

 

It's a fair question.  With seeding in the US and a semi-mythological status ascribed by some, those seeking to take share would need to pay more to get players to switch.  As we saw in 2003 or so, Titleist aren't going to sit back and do nothing, they were all set to play Bidding War.

 

It would probably take an "oil money in the English Premier League" sort of investment to make that happen.  Like Roman Abramovich at Chelsea or Sheikh Mansour at Manchester City.  No one has been willing to do that, yet.

 

I've wondered how the landscape would be different if the Kobe earthquake hadn't happened in 1995.  Maxfli might still be around as more than a house brand...

 

[Cwing]

On 11/5/2021 at 6:34 AM, cardigan said:

I don't think that it would happen.  It would be one thing if Snell was a niche lifestyle brand that didn't claim to be a tour level ball but it's not.  Snell claims that their balls are as good as, if not better than, the OEM balls at a fraction of the price with Dean Snell's experience in the industry giving them serious credibility.  They are basically saying that OEM balls are overpriced.  I don't see how TM could bring them in house without somehow addressing that.  I don't see them lowering the prices on their premium balls or having Snell say that Snell balls aren't really as good as TM premium balls.  As for the DTC market as a whole, I don't know the numbers for any of them but I doubt that the revenue of any of the DTC companies is enough to get the OEM's to want to think about acquiring them.  Vice might be an exception but again, an OEM purchasing them would probably tell them to keep it up with the lifestyle marketing stuff and chill out on the "design and engineering" and "as good as the big boys" stuff.

Why would TM bother to change their marketing strategy at all? Your average no wrx’er consumer would have no idea and likely wont care what company actually owns Snell.

[cardigan]

54 minutes ago, Cwing said:

Why would TM bother to change their marketing strategy at all? Your average no wrx’er consumer would have no idea and likely wont care what company actually owns Snell.

Well, the only way we'll ever find out is if TM actually buys.Snell.  I think Snell is just too small for TM to do that but if it happens, I'll have no problem saying that I was wrong.

[TheDominator273]

Can't say I'm shocked by this news, according to my TM rep the CEO has told them it's a company wide failure if TM balls don't outsell ProV1s within 10 years.

[Yoshifan151]

40 minutes ago, TheDominator273 said:

Can't say I'm shocked by this news, according to my TM rep the CEO has told them it's a company wide failure if TM balls don't outsell ProV1s within 10 years.

 

LOL, good luck with that.

[elwhippy]

Outselling the V1? Might be feasible if Titleist keep hiking their prices. 

[TheDominator273]

5 hours ago, Yoshifan151 said:

 

LOL, good luck with that.

I feel the same way, the ProV1 is so ingrained in a certain segment of players it would take a much better ball at a cheaper price point to even come close and even then I'm sure many many golfers are set in their ways.

 

Even more interesting though was the rep telling us that TM is exploring buying a clothing line known for very high quality stuff.  It certainly seems as if the current management has some aggressive goals in mind for the company.

[dalehead]

7 hours ago, TheDominator273 said:

Can't say I'm shocked by this news, according to my TM rep the CEO has told them it's a company wide failure if TM balls don't outsell ProV1s within 10 years.

I’d be willing to bet Callaway, Srixon, and Bridgestone all have outselling the Pro V1 as a goal.  A 10 year goal? That’s typical CEO speak. Most CEO’s don’t last that long so he won’t be around to be accountable for it.

[Londo]

On 11/6/2021 at 12:54 AM, grm24 said:

Dean also was on the design team for the TM InerGel balls that were almost universally despised. The TM IngerGel plastic tube packaging also had some specious claims from Dean for its packaging regarding balls possibly losing up to 14 yards in distance vs cardboard sleeve packaging that is still in use today. Interesting article linked below (from 1999) for those that take the time to actually read it.

 

https://www.packworld.com/machinery/primary-packaging/article/13325590/can-packaging-improve-ones-golf-game

 

"The phenomenon of velocity loss over time has been downplayed by competitors over the last few years," says Snell. "But I can guarantee it's true." He claims that moisture absorbed by balls packed in conventional paperboard folding cartons over one year can shorten a drive by 12 to 14 yards.

 

The counterpoint to all of the above is Dean was also on the Titleist design team for the Pro-V1 balls.

 

I think that its fair to also point out that this article is from 22 years ago, I am unsure if balls have changed enough in that time to reduce that distance loss due to moisture...

[grm24]

3 hours ago, Londo said:

I think that its fair to also point out that this article is from 22 years ago, 

If you actually read my post instead you will see I noted the article was from 1999. 

[Londo]

18 hours ago, grm24 said:

If you actually read my post instead you will see I noted the article was from 1999. 

Missed it initially, thanks for the pro tip lol

[tikidavyi]

On 11/6/2021 at 12:01 AM, dalehead said:

TM has already entered the DTC market. By acquiring Nassau they are now Snell’s supplier, unless Dean Snell finds a different supplier. He could go to Foremost. Oh, wait, TM now owns Foremost. So it’s a small leap for TM to say “We’re selling balls to Dean Snell for $X, he marks them up by $Y and sells them to the consumer for $Z. Why don’t we just buy Dean out and keep the whole pie for ourselves.”

I think the DTC vs. TM models are a bit different.  Dean Snell is one of the first to "sell" on his personal credibility as a ball maker, similar to Scotty, Roger, Bob, but do it in the ball business.  Snell is able to spend little in marketing or trade, in order to pass on the savings to end consumers.  For a corporation like TM, it may prove to be difficult to manage different economic models, especially if they are sometimes competing against each other.  If TM absorbs Snell, and then takes their marketing approach to Snell, it'll take away the pricing advantage.  In addition, keeping Snell and other DTC brands in its factories (as is model, keeping it simply as a supplier relationship), may also help Foremost / Nassau factories have better production capacity absorption and efficiency, overall may reduce the cost of producing TM balls too.

[mvhoffman]

On 11/5/2021 at 11:04 PM, cardigan said:

I don't think that worked out long term for TM or Adams but I understand if others disagree.

Just reading thru this thread and I came across your post.  I think the purchase of Adams was the single most defining move TM could have made.  Speed slots in everything since including irons.  Fairway woods took off (Rocket something) after the speed slot and V steel shape combined.  Still today in the SIM2 and so on.  I have never been a TM fan boy.  To be honest, I always stayed away from them.  Now once I got the SIM2 I completely flipped my whole bag over and I'm extremely happy with it.

[cardigan]

2 hours ago, mvhoffman said:

Just reading thru this thread and I came across your post.  I think the purchase of Adams was the single most defining move TM could have made.  Speed slots in everything since including irons.  Fairway woods took off (Rocket something) after the speed slot and V steel shape combined.  Still today in the SIM2 and so on.  I have never been a TM fan boy.  To be honest, I always stayed away from them.  Now once I got the SIM2 I completely flipped my whole bag over and I'm extremely happy with it.

I can agree with that.  I should have thought that through a bit more.  There was something meaningful to be gained by TM.  Adams appeared to become an afterthought after the acquisition though.

[mvhoffman]

On 11/10/2021 at 4:17 PM, cardigan said:

I can agree with that.  I should have thought that through a bit more.  There was something meaningful to be gained by TM.  Adams appeared to become an afterthought after the acquisition though.

I got ya now.  I know what you were trying to say.  It is unfortunate that some of the designs went to the wayside with Adams being over taken.  The shapes they had with a lof of the fairway woods and drivers even were great.  I still have some of the old school Tight Lies in my bag.