Honma Golf: Where To In 2022?

“The only constant in life is change”  Greek philosopher Heraclitus

“Time may change me but I can’t trace time”  British rocker Bowie

Honma Golf has had one constant in North America: Change.

For the past three years, it seems Honma has turned to face the strange and put itself through enough ch-ch-changes in strategy and corporate leadership to make both Bowie and Heraclitus proud.

Since 2018, Honma Golf leadership has morphed more times than a Power Ranger—from “strategic advisor” Mark King to former TaylorMade executive John Kawaja and then former Titleist executive Chris McGinley. This past summer, Honma named former Bridgestone Golf executive Janeann Lanning as its new North American chief.

The Honma Golf go-to-market strategy has been a constant of change as well. It has evolved from an all-out assault on retail to a more boutique, mobile-fitting van approach. Under Lanning’s leadership, it appears more changes are in the works.

Honma Golf: Strange Fascination

Honma is a family name. The Honma brothers—Yukihiro and Hiro—first opened their Tsuruni Golf Center in Yokohama in 1959. It was part driving range, part club repair center, and it was the Honma brothers’ firm belief that making a golf club is an art form. By 1963, the brothers introduced their first Honma-branded club. In 1973, Honma introduced its first graphite-shafted wood and, later in the decade, added Honma-branded apparel.

In the ’80s, Honma set up shop in Sakata on Japan’s west coast about 300 miles north of Tokyo and it quickly became the city’s largest employer. A historical tidbit: Lee Trevino used Honma persimmon woods to win his last major, the 1984 PGA.

Like most of Japan’s golf industry, Honma thrived during the ’80s and the first part of the ’90s. That’s when Japan’s economy turned south. Honma limped along but, by 2005, it was forced to file for bankruptcy protection. In 2010, a white knight, a Chinese group called Marlion Holdings, bought Honma and started the company on the road to recovery.

As with most companies, the pandemic hit Honma right in the top line last year. Its fiscal year ends March 31 and, while fiscal year 2020/2021 ended with top-line sales down, the company did manage to turn a $16-million profit on nearly $204 million in sales, a welcome turnaround from the previous year’s $6-million loss.

Honma Golf and North America: Ch-Ch-Changes

Since 2015, Honma North America has gone in more directions than Rand McNally.

“It’s a fair description,” says Honma North American Sales Director Ryan Sawyer. “I’ve been here 2  1/2 years and we’ve definitely taken a few different paths. We’re trying to find ways to be creative and find ways for the brand to be successful.”

Go back in our archives and you’ll find story after story on Japanese brands trying to “figure out North America.” For Honma, figuring out North America has been like a game of Chutes and Ladders. Mark King joined the team in 2018 as a strategic advisor, reporting directly to Honma Chairman Liu Jianguo. Less than a year later, King inexplicably became Taco Bell’s CEO.

Next man up was Kawaja and things certainly seemed to be moving in the right direction. Honma signed Justin Rose to a big sponsorship deal, opened a new headquarters in Carlsbad and established a U.S.-based design team to create products specifically for North America. Honma also established a nationwide fleet of mobile fitting vans designed to bring the entire product line directly to you, the golfer, to experience and buy.

It was all systems go for Honma. Until it wasn’t.

The Rose deal went south in just over a year. Then the pandemic hit. Kawaja left, as did his successor McGinley, and the U.S.-based design team was disbanded.

“The U.S. team has shrunk a little bit,” says Sawyer. “We’ve moved some things back to Asia. They’ve helped us forecast better so we know what products are selling here so we can move forward and be a good and profitable company.”

So, once again, there’s a new direction for Honma. And that direction appears to be Beres-heavy.

Beres Takes Center Stage

“Beres is more than half our business in North America,” says Sawyer. “We kind of own the market at certain price points and it’s where we’ve decided to put a lot of our energy for time being.”

Beres is all about lightweight luxury designed for low to medium swing speed players with very deep pockets. Pricing for a Beres driver can range from a low end of $850 for a 2-Star driver all the way up to $4,500 for a 5-Star driver.

“PXG or XXIO might not be for everybody, based on price point,” says Sawyer. “But Beres really isn’t for everybody. If you’re a high swing speed player or a single-digit handicap, it shouldn’t offend you that we make a $70,000 set of golf clubs because those golf clubs aren’t designed for you anyways.”

Who is Beres for? If you drive a Maserati, Aston Martin or Lamborghini, swing your driver no more than 90 mph and really dig gold, Beres is for you.

“I can see how it would offend people because of the price,” says Sawyer, “but at the end of the day, it’s not for everybody. And that’s just fine.”

Beres does come at different price points depending on the level of 24-carat gold and super high-tech shaft materials you’re willing to pony up for. The 2-Star is ironically considered “entry-level” by Beres (it did finish third in this year’s Most Wanted Super Game Improvement Iron testing), and the line goes up to 3-, 4- and 5-Star levels.

“The 2-Star might be compared to an A-Class Mercedes,” says Sawyer. “We have comps to C-Class and E-Class and the 5-Star Beres is like the Mercedes Maybach edition.”

A bagful of Beres 2-Star comes in at just over $6,000 while the 5-Star, as mentioned, can run as high as $70,000.

Wait, What?

Yeah, $70,000 for a set of golf clubs. Clearly, at that price, it isn’t just about golf.

And if you’re ready to scream something along the lines of Who the hell is going to pay $70,000 for a set of golf clubs?, don’t bother. There is, dear reader, a market. Not a big one, mind you. But then again, it doesn’t have to be.

“We could sell 20 sets a year of the 5-Star grade and do pretty well,” says Sawyer. “But for how big the country is, that’s 20 people who want to play our product.”

Given the size of North America, it’s easy to imagine Honma doubling or tripling that number.

And why pursue it? A little math might be helpful. Twenty 5-Star sets at $70,000 a pop is $1.4 million in sales while 60 sets if $4.2 million. Any guesses on how many T//World GS or TR20 irons Honma would have to sell to make the same margins? The answer: A lot more than they have been.

Want more math? Although Honma’s more mainstream wedges, irons and drivers have all rated very highly in MyGolfSpy Most Wanted testing, the company still finds itself in challenger brand limbo.

“If you look at any major OEM, they have anywhere from 38 to 65 sales reps on the road,” says Sawyer. “We have 10. We can’t touch as many customers. And, frankly, a lot of retailers don’t want to take on a new brand if they haven’t heard about it or haven’t read about it because not everyone is online researching product.”

Honma’s most recent annual report for the fiscal year that ended last March shows North American sales at $8.2 million with pre-COVID sales the previous year of just over $11 million. North American sales account for just four percent of Honma’s total revenue.

Honma’s Fitting Vans

One of Honma’s more innovative initiatives was its nationwide fleet of mobile fitting vans. In the months before COVID, Honma was on its way to rolling out as many as 14 of these fully equipped fitting centers on wheels. The plan was to bring the fitting to you.

“Like everybody else, we had to adjust during COVID,” says Sawyer. “We had to work more closely with off-course retailers, strategic accounts and brand-agnostic fitters.”

Honma’s vans are manned by what Sawyer calls the “New Age sales rep”: One part master fitter and one part salesperson.

“We have a guy in New York/New Jersey who just kills it,” he says. “If you think about a map, everywhere where there’s a coast we do really well. It’s the middle part of the country that never really took off.”

Honma has eight fitting vans and two trailers on the road. Additionally, Honma’s annual report indicates the company will support a more direct-to-consumer model. The report also indicates Honma products are present in 83 retail locations in North America.

A Rose is a Rose

One cannot discuss Honma without bringing up L’affaire Rose. Honma signed Rose to a big sponsorship deal with Rose having significant input in product design. He then went out and won his second start with Honma in the bag. A year later, it all fell apart.

“It definitely got us some negative press,” says Sawyer. “But I don’t think it hurt us as far as where we were headed in that segment versus where we are now. We’re selling about the same amount of irons now as we were before. So it really didn’t affect us too much.”

And while many golfers insist they’re not influenced by who uses what equipment on Tour, just as many consider Tour usage as validation of a product’s performance. Without a Tour presence, Honma has to validate the old-fashioned way: one golfer at a time.

“Everybody that tries our product agrees it’s a great product,” says Sawyer. “If you’re a golfer, there’s no way you could hit it and not agree it’s a great product. It’s just a matter of how well we can tell that story when everybody makes a great product”

And therein lies the conundrum that is challenger brand limbo. The Big Five dominate the market, leaving precious little shelf space and bandwidth for anything else, regardless of how good it is.

“We’re a product company, not a marketing company,” says Sawyer. “I wish we had the marketing budget of the other guys but that’s not the reality. But our product? It’s always going to be good. It always has been.”

The China Connection

Honma’s tradition is Japanese but its ownership is Chinese. While plenty of Honma product is handcrafted in Japan, the company’s heads are made in China. All of the beforehand designing is done in Sakata as is the grinding, finishing touches and, for Beres, gold plating. Honma’s high-quality Vizard shafts as well as the even higher-end Beres shafts are hand-rolled in Sakata.

Some think the fact Honma’s forgings are not done in Japan somehow delegitimizes Honma’s Japanese heritage. In reality, it’s just the way business is in 2021. And it’s fundamentally no different than a club being designed in Carlsbad and made in China.

“Production is in China. The guys who design our product and get it ready to go are in Japan,” says Sawyer. “I imagine a lot of people do it the same way but Japanese companies tend to be viewed a little differently.”

Honma Golf: Where To in ’22?

“It’s been a tough 16 months and we’re not out of the woods yet,” admits Sawyer. “We still have work to do to get our product in golfers’ hands. We have a team out there doing that every single day and we’ll be out there today, tomorrow and the next day.”

If you talk with anyone from any of the challenger brands, it’s a common sentiment. The ever-evolving strategy and leadership tango notwithstanding, Honma, as the song says, is quite aware of what they’re going through.

“Regardless of who’s managing the company and regardless of strategy, the product doesn’t change,” says Sawyer. “Honma is a product company and our craftsmen are going to continue to make an incredible product, regardless of who’s managing the Honma U.S. business.”

The Big Five marketing machines rule the golf world. That’s a given. And it presents a two-fold challenge for brands such as Honma, Srixon, Wilson Staff and the direct-to-consumer companies. First is getting golfers to try their stuff. Second, it’s getting golfers to trust what they’re experiencing. Golfers might get better launch monitor numbers with a smaller brand but the Big Five still represent the safe choice.

“If golfers are interested in trying product that has stood the test of time, there’s no harm nor foul in giving it a shot,” says Sawyer. “The reality is Honma is a big brand, just not in North America. For us, success is someone simply telling a friend about our product, hitting the product and liking the product.

“Golfers know. You just grab a club and you just know.”