The downturn in the golf industry hasn't slowed down a business with a keen interest in the sport's success.
Company. Wesco Turf Industry. Golf course maintenance, lawn care Key. Company quickly adapts to market shifts.
An attractive lawn requires attention and maintenance. You can't expect it to grow unless you feed it, water it and take care of it properly.
Sarasota-based Wesco Turf helps its customers do just that.
And it applies the same kinds of principles to growing its business. That includes paying attention to its staff, keeping customer relationships healthy and changing courses when needed to cultivate success.
Proof of that philosophy comes from the firm's recent and ongoing success in an industry many believe is dead: golf courses. Wesco Turf has about a 65-70% market share for both commercial turf equipment and irrigation systems on golf courses in its territories, which includes most of central and west Florida. It also has contracts with professional sports organizations, theme parks such as Walt Disney World and colleges and universities.
“We've had a pretty good year so far,” says Billy Gamble IV, Wesco Turf's president and son of the company's founder. “Our sales growth has been in the double digits this year, and we're planning to have another good year next year.”
Gamble declines to provide specific revenue figures. He adds that going big on golf isn't the first time the company has shifted directions.
The company was founded in 1987 when Gamble's father, Bill Gamble III, bought a distribution business called Wesco Zaun from the Toro Co. Its territory covered a big swath of Florida, extending from Lakeland to Marco Island.
In 1998, Gamble and his brother John purchased another Toro distributorship with locations in Lake Mary and Jacksonville, which extended the company's reach to Sea Island, Ga., and west to Tallahassee. For 10 years, the two businesses were connected but operated separately.
The companies were consolidated in 2008 to create the current iteration of Wesco Turf. The company primarily sells and distributes Toro lawn-care and irrigation products, but it also offers Club Car utility carts, irrigation pump stations from Flowtronex, Bernhard grinders and Salsco rollers.
In the company's early days, average homeowners bought mowers and other lawn equipment either at Sears or directly from a dealer. But the advent of stores such as Home Depot and Lowe's changed that, and the trend cut into Wesco's consumer market share. “The dealer business was upended gradually and effectively had to reinvent itself,” says Gamble.
That made golf a good fit for the company. At first, in the 1990s and early 2000s, that was a good market. And even with the recent struggles in golf, Gamble remains steadfast.
Of course, the data coming from the golf sector belie that confidence.
The number of golfers in the U.S., for one, has fallen from 30 million in 2005 to 25.3 million in 2012, according to the National Golf Foundation. The NGF reports that rounds played have dropped as well, from 518 million rounds in 2000 to 465 million in 2013. There were just 14 golf course openings in the U.S. in 2013, compared with 157 golf course closures that same year. And a 2013 report from the National Association of Home Builders found that 66% of homebuyers actively do not want a home in a golf course community.
But Florida still leads the country in number of golf facilities, with 1,048 located within the state, according to 2014 NGF figures. And things may not be as bleak as they seem.
“There's been a media pile on suggesting that the golf industry is in big trouble,” says Michael Kahn, owner of St. Petersburg-based Golfmak, a consulting company that works with golf courses nationwide on refinancing, restructuring and course management issues. “The golf industry is far healthier than people give it credit for. It's gone through a correction and is coming out of that correction.”
Even so, new courses won't spring up the way they used to any time soon. So customer retention has even greater importance for Wesco Turf.
“It's the whole ballgame,” says Gamble. “The thing that's unique about being in the golf-maintenance business is that unlike most industries, there is a very finite number of customers. Everybody knows where they are, and there aren't more. If you lose one you can't go down the street and get another one.”
Offering top-notch service is one way the company keeps customers coming back. “Their service is better than anybody else in the area,” says Sean O'Brien, director of grounds for the Ritz-Carlton Golf Club in Lakewood Ranch, which has worked with Wesco Turf since the club opened in 2006. “They're more consistent, more reliable, and make us feel like we are a priority all the time.”
Kahn says golf courses have felt a lot more pressure to maintain their grounds over the years. That's partially courtesy of all those high-def images of beautiful courses like Augusta National Golf Club people have gotten used to seeing on TV. “It's pushing the costs of maintaining a golf course up and up and up,” he says.
How much? In 1994, says Kahn, an 18-hole golf course in Florida could be maintained for about $500,000 a year. That number is now at least $750,000.
Golf Course Industry magazine's 2014 State of the Industry report found equipment purchasing and replacement has been a top budgetary priority for U.S. golf courses in recent years, and 56% of the survey's respondents say equipment purchases were a primary focus of capital spending. That's good news for Wesco Turf, which tends to see customers buy or lease new high-use equipment like fairway, rough, and greens mowers every three to four years.
Also working in Wesco's favor is many golf courses built 20 to 30 years ago are ready for an update. “There's a lot of renovating work going on in golf around the country,” says Kahn.
“A lot of courses are redoing their irrigation systems, which have about a 20-year life span. There are probably 500 courses in the U.S. right now that need a complete redo of their irrigation systems, which is between a $1 million and $2 million capital expense.”
Building a reputation
Toro's main competitors in golf equipment are John Deere and Jacobsen. While both are tough competitors (“I sleep with one eye open most nights,” Gamble says), the golf realm is just one sector of the others' models, while it's more of a specialty for Toro.
“It's kind of the heartbeat of the Toro Co.,” says Gamble. “Our products have higher residual values on the pre-owned market, and I think they're more in demand.”
That demand is seen in the various awards Wesco Turf has won over the years. In 2015 it received the Toro Distributor of Excellence Award for the United States. The award is based on outstanding achievements in performance, financial health and customer care and customer satisfaction. It also won Toro's Residential Landscape Contractor Partners in Excellence Award for the second time.
Wesco Turf has about 130 employees, who have an average tenure of about 10 years. Wesco managers, says Gamble, are always on the lookout for good hires and try to have a pool of potential employees at the ready whenever there's an opening. Current staff are a good resource.
“Your best referrals are almost always from your own people,” says Gamble. “When they have to put their reputation on the line by introducing someone into the company, they've got some skin in the game.”
Wesco has also invested heavily in the service realm, both in working with customers and the equipment they purchase or lease. “I think a lot of our growth will be on the service side of our business,” says Gamble. “We have really good parts and service, and customers know that they can count on us to get things the next day, particularly parts. We try to make it as painless as possible to deal with us.”