By Octavio Jacobo^*

Golf's Hispanic Boom - Are you ready?

Back in my hometown of Guadalajara, Mexico; a regular Latino, football (soccer) fan and player, I grew up some blocks away from the Guadalajara Country Club, -“El Country” as locally referred to- where former number one world female pro-golf player, local idol (certainly mine) and National personality, Lorena Ochoa, grew up playing the sport (it now, with much pride to the local community, is the location where the LPGA plays the Lorena Ochoa Invitational).

Like most locals and Latin-Americans across to the continent, I grew up oblivious to the game of golf. I related to golf no more than for the fact that "El Country" was a well-known, beautiful, enclosed park-like property bordering my neighborhood where some unknown well-to-do, and well-to-do want-to-be people practiced the strange and non-consequential sport of golf.

Sometimes, hidden in the back pages of the local news papers, I found notes referring to the results of local golf tournaments. The closest I was to personally knowing anyone that played golf was hearing that a kid in school was a very good player. On an occasion I had a chance to hit some balls at the “range” of the Chulavista Country Club, located on the shores of the Chapala Lake; a range that I believe was no longer than 100 yards on a 9-holes course. Hitting that little ball was a lot harder than I ever guessed!

Playing a digital golf game that came on my early Windows PC; I learned that the game used clubs where the distance of the shot inversely related to the number on the club, with the goal being to hit the ball several times until getting it into a tiny hole. At that time, with little exposure to golf, I would say I was just golf-curious.

The real-estate development firm I worked for owned a beautiful suburb in the outskirts of the city with one of the oldest golf courses, renamed Las Cañadas. In those days Donald Trump played a round at our course with our CEO. We never heard anything again about this potential business partner. Maybe it was because our CEO got fired by Mr. Trump – before it became fashionable. I don't know if our CEO was a good player, but I knew he traveled several times a year to a place in California named La Jolla.

Shortly after that fated round, the CEO announced that the management staff would now be required to take golf lessons (seeing as our main developments were built around golf courses). My boss had the opportunity first. When the time came for me, as Junior Manager, the business, followed the national economy and imploded. Needless to say, I never got to take those lessons. To my knowledge, my former boss never really learned to play either.

So years later, a late-thirties Latino immigrant, with my U.S. MBA and an ascending career, as part of my functions as Business Development Manager of the US Emerging Hispanic Market for the largest Home Improvement company, I realized that not playing golf in the country and in the business was a “handicap” to my effectiveness to build opportunities.

So I bought some in-expensive clubs and took golf lessons at the local adult community school. And then it happened - the golf-bug bit me, it bit me bad. Now, an avid weekend golf player, or as my kids call me: “golf obsessed”, the rest is history.

In addition to the business use I have made of golf, the game has allowed me to meet a lot of very interesting people. Most of my closer friends, which I have met at the course, are part of my regular golf group. For natural affinity reasons, my group is composed of immigrant and native U.S. Hispanics, most of us who have taken up golf relatively recently.

Are you ever going to seize the growing opportunities of the Demographic Revolution and economical progress of Hispanics?

As someone whose livelihood is in the business of golf, you may wonder how this history relates to you. I mean, other than my golf buddies and I buy your equipment, use your apparel, watch your TV programs, follow your tours, read your magazines, play your courses, so on and so forth.

Or maybe, as a strategic, forward looking business professional, a light-bulb has gone on in your head and you are thinking that there maybe a significant number of people in this country with similar histories to mine, who are currently on the sidelines of golf, representing an untapped market segment with viable potential to be developed and to make business with. Hey, this may even be an opportunity to turn around the current negative tendencies of the national golf business.

Is there such market? What is its real potential? Where is it located? Is it worth any effort?

If so, how can your company reach out to them and position your products and services in such a way as to beat your competitors at it? If you do not have this expertise, there are a number of field-experts, associations, universities, agencies, etc. that are specialist in the topic. Feel free to reach out to me. A lot sooner than later, you should hire or develop this expertise internally.

In Callaway Magazine Spring 2009’s issue, the interview with George Fellows, Callaway Golf CEO, made several comments that resonated within the framework of my perspectives on the Hispanic market and possible future business opportunities: “…some of the issues that are stunting the growth of the game (of Golf) and adversely impacting the whole industry. Golf is going through, at best, a static phase – participation is down, rounds played are down, TV viewing figures are down and there are fewer people coming into the game.” (Wright, 2009)

As everyone in this business is well aware, since this article, the situation for the US golf industry has not improved; if anything, the severe economical downturn has worsened it. In the last decade golf has suffered a clear stagnation due to the economic conditions in addition to population trends and the dynamics of the industry and the sport. The NGF's annual golf participation study revealed that in 2008 the number fell 3% from 29.5 million, in 2007 to 28.6 million in 2008 . Numbers of golfers and rounds played was stable though slightly down in 2009 versus the previous year. Equipment sales slid further in 2009, units are off 21% and dollars are off 27%. Ball shipments were off 25% in units and 17% in dollars over the past three years.

While this worrisome situation is going on, the golf industry keeps trying to find ways to revert the ongoing shrinkage and stagnation, the country is simultaneously going through what Jorge Ramos, co-anchor of the nightly Spanish newscast Noticiero Univision, referred to as “a Demographic Revolution … and it’s already having enormous impact economically”

Facts of the U.S. Hispanic Demographic Revolution: 1. 50.5 million Hispanics in the country

2. 43% population increase in 10 years (00-10)

3. One of every six people in the United States is Hispanic.

4. Of the total Hispanic population, 17.2 million are younger than 18.

5. One in four children in the country is Hispanic. 92% of those children are U.S. citizens.

6. Hispanics accounted for more than half the growth in this nation over the last decade.

7. The Hispanic Purchasing Power was put at $1 trillion in 2010 and estimated by HispanTelligence , the research arm of Hispanic Business Magazine, to be $1.3 trillion by 2015.

Most likely, these facts about the US Hispanic population from the 2010 census are already old news for many; after all, the Golf industry has been looking at this phenomenon and opportunity for years. Unfortunately, it is yet to layout and implement a sensible strategy to tackle the opportunity.

This is a reality that is hard to turn your back on. It is quite obvious to me that any US based business looking for growth opportunities, regardless the product or industry, should be actively focused on understanding and tapping into the US Hispanic market. Investing resources with both short and long term vision to build the capabilities to comprehend, connect with, access and establish themselves in the ever-so-important Latino segment.

The Hispanic population is redefining the General Consumer Market (GCM). Hispanics are no longer just a key marketing consideration in the traditional Latino markets, making it be impossible to target the GCM without accounting for the fastest growing minority group. By not targeting Hispanics, businesses are not targeting the GCM. Hispanic marketing cannot be an incremental effort, but a part of the core marketing strategy.

Surely, I am neither an unparalleled visionary nor am I someone who got hit hard in the head by and errant golf ball. I certainly posess the professional and academic expertise in U.S. Hispanic Market and Business Development. I am an active observant of the golf business and also an avid player and not an isolated first-hand case-study of the opportunity to turn Hispanics into avid golf players and consumers.

Gustavo Razzetti, chief strategy and engagement officer at Grupo Gallegos said "If you want to grow your brand, [Hispanics are] the market that is growing." Juan Solana, chief economist for Hispanic Business Magazine, sees in the increased Hispanic population “the potential for a future of economic growth and financial stability in the United States.” “Substantial potential growth lies in consumer markets due to the demographic and professional progress of Hispanics,” Mr. Solana said. “Opportunities arise from seizing these emerging domestic markets, but threats come from ignoring them and allowing competitors to gain a stronghold in this segment of increasingly affluent consumers.”

For many players in the retail, food, insurance, automobile, consumer goods and other industries, I would be preaching to the choir. It only takes examining the investments they have made, the expertise and capabilities in Hispanic Marketing they have developed, together with the size and track of business growth they have in this market segment; while there is still much more to be done. Meanwhile, reviewing what the golf industry is doing, or better said, is not doing, I wonder, "What are you fellows waiting for?"

Surprisingly, it is not that this is news to anyone. Most all the people in the industry I have talked to are aware of the various degrees of the “U.S. Hispanic Demographic Revolution”; however, I have not yet heard of any golf-related company’s Hispanic Marketing Strategy or Department. If it exists, it is a very well kept secret, even for your Hispanic clientele.

What I have heard is a number of excuses - pardon my reasoning - to continue ignoring the 800 pound gorilla in the room: • We do not need to advertise in Spanish, Latino players can speak English; and if they don’t - they should, this is America, English is the language of the country. [In a later article I could elaborate on the use of English and Spanish to reach out and connect with the various sub-segments of the diverse Hispanic Market]

• Latinos are not interested in golf. Golf is played by educated, high-income segments of the population, and Hispanics have little representation in these areas.

• The very small segment of High-income Hispanics has a significantly lower percentage of golf participation than other segments of population.

I can only wonder, who has made the investment and taken the time to support the conclusions that justify ignoring the fastest growing segment of the U.S. population and the minority who is gaining economical ground faster than anyone? This Revolutionary Demographic change is here to stay.

And while the golf industry continues talking and talking … and talking … about finding the formulas to turn around the shrinking customer base, if those many naysayers have actually done their homework to intelligently backup these conclusions, then, what are you going to do about it?

If the number of U.S. golfers continues to decline while the Hispanic population continues to grow; and if this Hispanic population does not really represent a serious opportunity to attract and develop new golf players, then I suggest you evolve to survive. The golf industry might better start seriously thinking to transform itself into soccer. Those closing golf courses can accommodate a number of soccer fields. Sport retailers can expand their underperforming golf departments into soccer. Maybe we will soon see the first Foot Joy soccer shoe. I am being sarcastic here; or am I?

As with all previous immigration waves and demographic transformations, emerging populations in the United States aspire to become more American. These emerging populations adapt to the local culture while creating cultural transformations through the core values and traits they bring with them. Hispanics are no different. It is true that Hispanics have proven to be less likely to give up their language, customs and pastimes; and yet, these Hispanics are as willing to take and adapt the local culture and customs as anyone before.

You may wonder, are there really opportunities in the Hispanic segment?

You should ask yourself:

- Is not golf one key trait to American culture and the American way? Is it true that golf is one of the key tools for U.S. style business?

- Is not golf a naturally social activity? Are not Hispanic cultures naturally social and relationship oriented?

- Do not Hispanics surpass the percentage of participation in golf of African-Americas in the $75-99k and Asians on the $100-149k brackets, and on the higher end of $150k+ Hispanic participation surpasses all minorities and even the white population?

- Are there not proven facts that the most active golfer starts the game early in their lives and that one of every four U.S. youngsters is of Hispanic descent or origin?

- Is not the U.S. one of the countries in the world where golf is the most affordable and accessible? Certainly, it is a lot more so than in any Latin-American country. I am sure you will not find a minimal fraction of the existing public golf courses in the U.S. through all the Latin-American countries. This significant impediment, and thus part of the reasons for low Hispanic participation in golf is pretty much eliminated in the U.S.

- Did not golf participation in the U.S. grow the fastest and to its largest size when golf got to the masses, to the middle-class?

Several years ago I estimated that opportunities in the Hispanic market were three-fold:

• Maintaining the current market penetration in parallel to the growth trends of the Hispanic population, there is a 25% to 34% growth potential.

• Increasing the market penetration into the Hispanic population.

• Achieving higher per golfer spending in relation to the growing Hispanic buying power.

Using Joe Louis Barrow Jr., Senior Vice President, World Golf Foundation’s estimate of $872/year spending (Barrow Jr.) and the Hispanic population growth forecasts, I estimate that in the 10 year period from 2010-2020 the Hispanic golf market will naturally grow to 300,000 players over the age of 18 and in $262 Million dollars in spending. A comprehensive Golf Hispanic market development program that achieves a growth of just one percentage point of participation in the Hispanic population in the 2010-2020 time-span would result in additional 600,000 golfers and an additional half billion dollars in golf related expenditures.

Quoting Juan Solana, from Hispanic Business Magazine, “Substantial potential growth lies in consumer markets due to the demographic and professional progress of Hispanics,” “Opportunities arise from seizing these emerging domestic markets, but threats come from ignoring them and allowing competitors to gain a stronghold in this segment of increasingly affluent consumers.”

The question is, do you keep thinking and talking about seizing the opportunities of this emerging Hispanic market, or do you stop the lip-service and start taking committed, active actions and investments to move the golf industry in a collective long term effort to jump in the U.S. Hispanic Demographic Revolution to significantly increase the participation of Hispanics in golf.

What are you waiting for? Start the critical task of developing and implementing a Hispanic Marketing and Business Development strategy in your own company. If you keep ignoring it, your competitors will move ahead of you and gain a stronghold. Can you afford it?

http://youtu.be/pQnhuj11zgI http://youtu.be/M_hO0NxUZSo http://youtu.be/5tNlcAZCNhI

_________

Wright, N. (2009, Spring 0). A Man with a Mission. Callaway Magazine (19), pp. 27-30. (National Golf Fundation, 2009) (National Golf Fundation, 2011) (National Golf Foundation, 2003) National Golf Foundation. (2003). Minority Golf Participation in the U.S. - Specifically for the 2003 Golf 20/20 Conference. National Golf Foundation.

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Credits

Originally posted by OctavioJacobo on 13 Jun 2011.
All contributors: OctavioJacobo,

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