Editor’s Note: This is the my unpublished draft of the Carlsbad golf industry story you have read in the April issue of Southland Golf. Due to the constraints of traditional publishing (space limits, etc.) a shorter version of this piece ran in the mag. I wanted to post the original because I think it provides a lot of detail that was left out of the printed version. Hope you enjoy.
Three days after Phil Mickelson’s Gulfstream V touched down in California following his thrilling comeback victory at the British Open in Scotland last July, Mickelson texted Callaway CEO Chip Brewer to ask if it’d be OK for him to drop by the company headquarters in Carlsbad.
Mickelson wanted to personally thank the Callaway team. Oh, and he had a special guest.
That afternoon, Mickelson, dressed California casual in golf shorts and flip-flops, emerged through the glass doors of Callaway clutching the Claret Jug and with bottles of champagne in tow. He was greeted to cheers by many of the 518-person Callaway staff and an impromptu celebration ensued in the lobby, the same space where workers had been greeted by live bagpipe music days before to herald Mickelson’s victory.
The party eventually moved back to R & D and the team Mickelson had worked with closely, especially on his then-custom X Hot 3 Deep 3-wood, the club that produced two now legendary shots on the par-5 17 at Muirfield.
Among those included in the celebration was long-time Callaway club designer Austie Rollinson, the designer of the Odyssey Versa #9 putter Mickelson used to roll in the victory-clinching putt.
“I got to take a sip out of the Claret Jug,” Rollinson says, looking at a photo of the moment captured on his iPhone. “That was pretty cool.”
It was a special day at Callaway, but in the golf industry at large in Carlsbad it was another day.
It’s plausible that in that same week Dustin Johnson had dropped by TaylorMade to again test the limits of the Kingdom’s driving range, or Rickie Fowler had popped into Cobra Puma Golf to check out what vibrant color patterns the company would be dressing him in next. And maybe light up the launch monitor.
Over in Oceanside, on the expansive and lush range of Titleist’s test facility, pros from various pro tours could’ve been putting the next generation of the Pro-V1 into orbit.
Were Carlsbad to make its own version of the “This is ESPN” commercials, this is what they might look like. The difference? Carlsbad wouldn’t be making any of it up.
Welcome to golf’s Ground Zero.
Carlsbad’s tourism moniker is the “The Village by the Sea,” but that hardly captures what actually makes Carlsbad unique – namely, its place in the golf industry.
With a population of just below 110,000, as they say in boxing, Carlsbad punches well above its weight when it comes to influence in the golf equipment world.
The combined operations of Carlsbad-based TaylorMade, Callaway and Cobra Puma are akin to golf’s version of Silicon Valley. (Titleist has a presence here, too, but is actually based in Fairhaven, Mass.)
In terms of product development, R & D and setting golf’s equipment agenda years in advance for North America and the world, Carlsbad is it.
“The music of the golf industry plays through Carlsbad,” says Bob Philion, President of Cobra Puma Golf.
And, increasingly, Carlsbad’s equipment tune is played to the background music of a cash register. The companies combined reportedly amassed about $3 billion in sales in 2013, with TaylorMade, golf’s top brand, pulling in more than half, $1.7 billion.
How big is the golf industry in San Diego? Well, in 2008, an economic impact study pegged its contribution at $2.6 billion, making it larger than the sectors of legal services, agriculture, computer software and even aerospace.
How did Carlsbad become the hub for all of this? A Sports Illustrated/Golf.com piece in February, titled “Golf’s Ultimate Playground,” delved into those origins, relying heavily on an interview with TaylorMade CEO Mark King.
King challenged the local legend that the industry’s establishment in Carlsbad is tied to golf’s common interests with the military in terms of technology and manufacturing (club casting, in particular) needs as equipment transitioned into its current metal-based technology boom away from wooden clubs.
Instead, King said Callaway coming to Carlsbad in 1985 and TaylorMade in 1982, both destined to change golf forever with the first metal woods and drivers, was more happenstance than plan.
“It’s all folklore,” King told SI. “The whole thing was coincidental. After he sold the vineyard, Ely Callaway bought into a little company in Carlsbad that made hickory-shafted golf clubs.
“Gary Adams founded TaylorMade in Chicago but his West Coast (partner) lived in Carlsbad … so the company moved out here, too. It was all a big accident,” King concludes, noting Cobra golf was established in Carlsbad around the same time.
Ely Callaway got into golf when he used the profits from his winery to buy Hickory Sticks, USA, a golf company in Temecula, in 1982. He moved it to Cathedral City, but the lack of a robust labor pool caused him to move the company Carlsbad, where a golf labor pool existed at TaylorMade and Cobra.
Some of those workers became the original Callaway Carlsbad crew, thus beginning the now common experience of people being recruited from one company to another.
While some of the origins of the golf industry in Carlsbad may be in doubt, the impact is not.
The companies not only changed how clubs are made, but how they’re sold and marketed. Austie Rollinson, who joined Callaway as a club designer in 1991, recalls how clubs were largely only sold at golf courses when he started and how Mr. Callaway was the among the first to transition the business into the retail big-box model we see today.
Rollinson arrived as the industry was transitioning from more mom-and-pop into the manufacturing and marketing machine we see today. Rollinson says the companies maintain a friendly competitive balance, but it’s nothing like the stories he’s heard of the camaraderie of the 80s.
“If Callaway was making clubs that day and was out of Dynamic Gold golf shafts, they’d just call Cobra,” Rollinson says. “I couldn’t see that happening now. It was a much more friendly industry back then, but there wasn’t as much at stake and it was as competitive as it is now, either.”
Palomar Airport Road, a major thoroughfare in Carlsbad that leads to all three company’s offices, was a dirt road when Rollinson arrived. It’s now a major six-lane highway.
Jose Miraflor, Director of Product Marketing at Cobra Puma, recalls the dirt-road days as well.
“Now people pass me doing 70 on that thing!” he recalls with a laugh, knowing it’s possibly one of his competitors, whom he sees frequently.
“When you go out to a lunch meeting, if you’re talking products or design, you have to look over your shoulder to see else is (in the restaurant). We’re a big industry in a small community, and you never lose sight of that.”
Strangely, the one answer you don’t hear as to why Carlsbad became the center of the golf equipment universe is the one that seems most obvious – the weather.
Miraflor says that’s the reason he can’t imagine the equipment companies being anywhere else.
“We’re identifying products right now for 2016. To be that far ahead, you need to be hitting prototypes in Jan./Feb., and really the only place to do that is California,” he says.
But access to that perpetual sunshine doesn’t come cheap.
“It’s expensive,” Miraflor says, referring to taxes, real estate, etc. “The operational cost is high, but the advantages, including the weather, can’t be beat.”
If you’re looking for the future of golf, look no further than TaylorMade’s posh fitting center and driving range, The Kingdom.
Situated across the street from the company’s headquarters, it’s where many of its contracted players come to practice, be fitted and hone their games in a high-tech environment.
Like golf courses, The Kingdom has a graduated set of tee boxes. During a visit there last fall, players from three pro tours were hitting, but none from what would be the tips.
I asked Frank Firman, a Category Manager at TaylorMade, where the company’s big hitters, such as Dustin Johnson, hit from when they come to practice.
“We have to ask Dustin to stand over there (pointing to the back right of the box) and hit it over there (pointing to the remote left side of the range),” Firman says. “Otherwise, if he loses it right, it’s look out College Boulevard.”
Translation: While testing clubs, Dustin Johnson is making TaylorMade’s spacious driving range seem obsolete.
More than high-profile faces for the company, its product and its brands, players have a major impact on product testing and development. The rationale largely is that if the product works for the pros, the product – or a version of – will work for every level of player below.
On my visit to Callaway, Rollinson noted how some clubs the pros use, such as the famed Phrankenwood 3-wood Mickelson once carried, don’t ever become retail products, but the technology advance gives birth to the next generation of retail clubs, such as the X Hot 3 Deep.
Rollinson also mentioned how a custom shaft bend requested by a tour player in the last year gave birth to a new Odyssey putter design.
Rollinson says attention to detail is more acute than ever amongst companies looking to make millions off of what can be fractional advantages in innovation. And the scrutiny of the public, between round-the-clock coverage on The Golf Channel and Internet pundits, has never been higher.
“Our products are watched more closely than ever,” he says.
Tens of millions of dollars annually are put into R & D to keep pace with product launch cycle that is no longer seasonal and, as TaylorMade showed last year, can produce two new drivers in the same calendar year.
But Cobra’s Philion says that competitive pressure has more advantages than drawbacks.
“It puts a lot of pressure on R & D to bring something new and better to the market place,” he says. “But it’s exciting for because we can launch more products and enhance our brand experience for the consumer.
“We like that cadence. It allows us to on bringing innovation to the market place every day instead of just pumping out units.”
But the companies do watch other closely and do exhaustive studies of competing technologies to separate the scientific truth from the marketing hype.
And then there’s brand differentiation, which right now at Cobra is summed up in the succinct motto, “Enjoy Golf,” emphasizing the many pleasures of the game aside from just what’s on the scorecard.
Knowing the competition intimately allows for greater ability to separate, Philion says.
“It gives us a chance to differentiate ourselves,” he says. “We like to zig when others zag.”
Philion launched the Puma golf brand and then oversaw its merger with Cobra in 2009. The company started with 28 employees and now has 150 in Carlsbad and 350 worldwide.
In 1998, TaylorMade was purchased by Adidas and has 1,800 employees worldwide, 800 in Carlsbad.
Callaway has gone through some down-sizing and leadership turmoil in recent years, but after hiring CEO Chip Brewer is back on the uptick.
While the balance of power right now is squarely with TaylorMade, things like Mickelson’s victory at the British can be a game-changer, Rollinson says.
Mickelson’s victory wasn’t just a major for him, it was a major for Callaway, too.
“It’s very satisfying when the fruits of your labor pay off like that and you know you got one of the best players in the world to perform at his very best at a crucial moment. It makes you proud,” Rollinson says.
“It’s bolsters you, and it’s great motivation when you get back to work on Monday.”