TM buys Nassau

[MattF]

https://golf.com/gear/golf-balls/taylormade-golf-ball-nassau-acquire-korea/

I wonder how that's going to affect the DTC's that Nassau makes balls for. I know Snells are made in Korea but not sure if it's Nassau that makes them.

[tony@CIC]

2 hours ago, MattF said:

https://golf.com/gear/golf-balls/taylormade-golf-ball-nassau-acquire-korea/

I wonder how that's going to affect the DTC's that Nassau makes balls for. I know Snells are made in Korea but not sure if it's Nassau that makes them.

First thing that came to mind when I read that this morning. Is this a way to squeeze the DTC's out? It's been a tough year for Snell, although the "Blacks' five pack is back. Hopefully this isn't a trend by the big boys. 

[03trdblack]

I'd be willing to bet that Snell is going to have to take his business elsewhere.  Hope it doesn't affect their quality.

[MaxEntropy]

2 hours ago, MattF said:

https://golf.com/gear/golf-balls/taylormade-golf-ball-nassau-acquire-korea/

I wonder how that's going to affect the DTC's that Nassau makes balls for. I know Snells are made in Korea but not sure if it's Nassau that makes them.

In Tony's article, he mentions that Snells are made there and it remains to be seen if there will be any effect on supply.

[MGoBlue100]

17 minutes ago, tony@CIC said:

First thing that came to mind when I read that this morning. Is this a way to squeeze the DTC's out? It's been a tough year for Snell, although the "Blacks' five pack is back. Hopefully this isn't a trend by the big boys. 

Two thoughts:  1) You ensure that your company has capacity to do whatever you'd like to do at Nassau while 2) basically "shutting out" ALL of your competitors, DTC or OEM from using this facility.  Another entity will pop up, the market is too big.  Question is how long and with what type of quality?

[ajdegeno]

The specifications are Snell's and other DTC ball companies.  They can find a manufacturer in Korea to compete with Nassau.  It will take a few weeks of trial runs but once they hit the specs all will be fine.  I worked with several manufacturers in Korea and if your specifications were detailed enough and the process was capable of being duplicated, it can and will be done. 

Nassau did make a lot of different balls in the past including one of the early Kirkland balls and some of the Nike balls.  When Nike got out of the business Nassau sold the capacity to Kirkland (costco).  But people like Titleist, Maxfli, TaylorMade and others needed a place to make their off brand golf balls and Korea was the place.  I am also sure that companies like Snell and other DTC knew about this possibility for a while and have been searching for capacity.  It may take a while but there may be a ton of golf balls on the water and on the ships that are waiting in California to unload. 

[ChuckZ]

17 hours ago, ajdegeno said:

The specifications are Snell's and other DTC ball companies.  They can find a manufacturer in Korea to compete with Nassau.  It will take a few weeks of trial runs but once they hit the specs all will be fine.  I worked with several manufacturers in Korea and if your specifications were detailed enough and the process was capable of being duplicated, it can and will be done. 

Nassau did make a lot of different balls in the past including one of the early Kirkland balls and some of the Nike balls.  When Nike got out of the business Nassau sold the capacity to Kirkland (costco).  But people like Titleist, Maxfli, TaylorMade and others needed a place to make their off brand golf balls and Korea was the place.  I am also sure that companies like Snell and other DTC knew about this possibility for a while and have been searching for capacity.  It may take a while but there may be a ton of golf balls on the water and on the ships that are waiting in California to unload. 

Thought that Titleist had three plants in the US and one in Thailand where their balls were manufactured.   What off brand balls are you referring to?  This is a good business decision for TM.  The TP is a good ball.    

[cnosil]

30 minutes ago, ChuckZ said:

Thought that Titleist had three plants in the US and one in Thailand where their balls were manufactured.   What off brand balls are you referring to?  This is a good business decision for TM.  The TP is a good ball.    

I am guessing but it could be the balls that fall under Acushnet like Pinnacle or their DTC brand Union Green.  

[RickyBobby_PR]

TaylorMade owns Foremost iirc. They make balls for other companies there. I don’t see anything changing with Snell or other DTCs that use Nassau. TM will be beneficiary of getting paid to make other people’s golf balls

[storm319]

On 11/3/2021 at 6:28 PM, ajdegeno said:

The specifications are Snell's and other DTC ball companies.  They can find a manufacturer in Korea to compete with Nassau.  It will take a few weeks of trial runs but once they hit the specs all will be fine.  I worked with several manufacturers in Korea and if your specifications were detailed enough and the process was capable of being duplicated, it can and will be done. 

Nassau did make a lot of different balls in the past including one of the early Kirkland balls and some of the Nike balls.  When Nike got out of the business Nassau sold the capacity to Kirkland (costco).  But people like Titleist, Maxfli, TaylorMade and others needed a place to make their off brand golf balls and Korea was the place.  I am also sure that companies like Snell and other DTC knew about this possibility for a while and have been searching for capacity.  It may take a while but there may be a ton of golf balls on the water and on the ships that are waiting in California to unload. 

Much of this is incorrect.

First, all ball brands under Acushnet are produced in a factory that they fully own, they do not outsource any ball production (plants 3 & 4 for multilayer cast thermoset urethane models, plant 2 for injection molded cover models, plant C for custom stamping). 

Next, Nassau did not produce balls for Nike as they specialize in cast thermoset urethane covers (process established in partnership with Taylormade in the mid-2000’s), Nike’s urethane models were all injection molded TPU produced by Bridgestone from 2000-2010 then at the SM Parker factory in China (formerly Fantom) starting with the 20xi line I believe. Nassau’s largest customer in the past couple of decades has far and away been Taylormade. 

Also, switching to a different factory is not an easy task nor is it without implications. The biggest challenge is going to be with the cover production method. I am only aware of 5 facilities in the world that currently have thermoset casting capabilities in any real capacity and those are all now fully or partially owned by Acushnet and Taylormade. Dimple patterns are also generally limited to what the factory already has unless the customer wants to pay for new tooling (which short of the big ones like Callaway, Taylormade, or previously Nike doesn’t really happen). Remember the Snell MTB Red? That was Dean’s attempt at offering a new option at a time that Nassau did not have capacity so he went to another factory (Fantom/SM Parker) which resulted in a ball with a TPU cover and Nike’s 336 dimple pattern which. The ball was universally panned and lasted less than a year because it was nothing like Dean’s prior work. Core and mantle production methods are more generic across the industry which makes factory migration easier, but I would imagine it is a bit more involved than a few weeks of back and forth.

[storm319]

5 hours ago, RickyBobby_PR said:

TaylorMade owns Foremost iirc. They make balls for other companies there. I don’t see anything changing with Snell or other DTCs that use Nassau. TM will be beneficiary of getting paid to make other people’s golf balls

Some outlets have referred to the 2019 Foremost situation as an outright acquisition while others have referred to it as a joint venture which implies that Taylormade does not fully own it. Either way they now have full or majority control over the two biggest/best white label ball factories in the world. At a minimum they should be able to curb future IP infringement and have the potential to squeeze out or limit new entrants into the DTC market if they wish. I’m actually surprised that Acushnet didn’t do this years ago. 

[Quigleyd]

On 11/3/2021 at 7:30 AM, tony@CIC said:

First thing that came to mind when I read that this morning. Is this a way to squeeze the DTC's out? It's been a tough year for Snell, although the "Blacks' five pack is back. Hopefully this isn't a trend by the big boys. 

Does this squeeze them out? Or does this just mean that TM is getting a piece of every Snell ball now? Essentially increasing revenue and market share without even selling more TM balls at retail? 

[MattF]

Got this update email from Dean Snell last night. I bolded the important part.

 

Quote

Year-End Update...

First off, Merry Christmas and Happy New Year. I hope everyone is able to stay healthy through the holiday season.  This year has been a challenge in so many ways, and Covid has once again made the holidays a challenge for many.   

Let me start by saying THANK YOU for all your patience, support, emails, texts and hanging in there with us during the year.   As you know, Covid hit the supply chain in golf balls very hard.  Material supply, labor shortages, and shipping issues all have contributed to delays in manufacturing, allocated supply, and big increases in costs.  In 2021, we were forced to put some products on allocation to 2 dozen max order, and had to pause our best selling 5 dozen value packs.    We were fortunate to receive some inventory late in the year and turn the value packs back on for most products.  In summary, this was a tough year and I am sure many of you have similar stories in your own experiences but we want to keep our heads up, move forward, and do the best we can.

Next year we will continue to have challenges in supply.  The biggest issue out there is the short supply of materials to make the golf balls.   Several manufacturers use the same materials, so with the shortages from the suppliers, everyone is in a similar situation.  As you can expect, we are not the top dogs in the game (not yet anyway, haha), so we are not at the top of the list with allocated supply. However, we will continue to monitor the situation and do the best we can going into the new year.

I have continued to work on the development of new products, and even though the prototyping has been very slow, we are making good progress.   We will begin the new year with the same MTB lineup we have today. I do not want to launch any new products until the supply chain issues have been fixed and we can supply to everyone without allocation.  I will keep you all updated on the progress in Q1 next year.

Last but not least, we have had several emails and phone calls asking if we will still be in business with the recent news of TaylorMade purchasing the factory we use to make the MTB lineup. YES!  We will continue with the same materials, processes, and quality control in place.

Thank you again for your continued support and patience in 2021. Our team wishes everyone a happy and healthy New Year! Thank you for playing Snell Golf.