His Business Depends on Golfers’ Errors
International Golf Inc. profits from others’ mistakes.
Slices, hooks, duffs or sinkers--whatever golfers call their misdirected shots--the sound of balls plopping into water hazards is sweet music to the world’s largest distributor of used golf balls.
Riding the game’s recent surge in popularity, divers for International Golf this year expect to retrieve 10 million golf balls for redistribution everywhere from Japan to Scotland, where golf was invented 800 years ago.
There are five times more balls rolling into the plant than were processed in 1985, and more than all gathered by the firm’s few competitors, said Jerry Gunderson, International Golf’s president.
He said the company is straining the capacity of its plant and directors are considering selling shares to help pay for expansion.
A Duffer’s Motivation
“Think about it: Every golfer loses balls, and they could have a piece of a company that makes money getting them out,” Gunderson said. “They’d say, ‘Well, I lost $100 in balls, but maybe I’ll get some of it back.’ ”
Gunderson said his first job as a boy was combing water traps in nearby Lake Worth. He was paid 8 cents for each ball he retrieved. He later spent $1,500 of college tuition money from his father on scuba gear and spent weekends gathering balls in Jacksonville, Atlanta or St. Petersburg.
After college, Gunderson returned to his father’s furniture business, but in the ‘60s and ‘70s he started several golf-related enterprises. Each time business foundered, he turned to ball-collecting to bail himself out.
A major break came last year when Merimac Investment Inc., a Fort Worth, Texas-based venture capital firm, started to bankroll the company and brought in management consultants. International Golf pays more than $500,000 a year for the rights to collect balls at about 600 U.S. courses.
Break-Even Point
Gunderson said the firm has grown into a multimillion-dollar operation, and it takes about 3.5 million balls to break even for a year.
The backbone of the company is its 45 divers, who earn between $500 and $1,000 a week plunging into the debris-clogged water traps. Broken glass and rubbish are just some of the hazards they face. At least two divers have been bitten by alligators.
“There is no glamour to this job,” said diver Theron McBride, whose swim fin was once pulled off by an alligator. “There is zero visibility and I’ve run into everything down there: rakes, dump trucks, golf carts and shopping carts. It’s kind of like catching bubbles in the dark.”
On a good day, a diver can pull up 600 balls for shipment to the plant.
Gunderson’s modest office is decorated with a few golf posters and a mounted sailfish he caught as a teen-ager. The armrests on his swivel chair are torn. The view is of a barb wire-fenced courtyard in which 1.5 million balls are bagged and waiting to go through the assembly line.
The balls are washed and immersed in chemicals to remove algae and barnacles. Next, they are inspected for quality and imperfections. (Cuts are surprisingly few on the impact-resistant jackets that cover most balls.)
Sold at Half Price
The least damaged balls are packaged and sold for about half the price of new ones. Those of lesser quality are repainted and sent to driving ranges. Those with cuts are sent to luxury cruise ships to be blasted into the sea from deckside driving ranges.
“I’m having a wonderful time,” said Gunderson. “We were all working so hard we never looked up to see how things were going. Then one day I looked at them loading pallets to be shipped to Europe--France, England, Sweden and Spain--and I thought, ‘I used to pick up balls with my toes!’ It’s pretty amazing.”
Gunderson said his company is a relatively minor player in the $462 million-a-year golf ball market, but while the others concentrate on the greens, International scours the ponds.
“We’re not one-to-one competitors with the big guys yet,” Gunderson said, “but at least we’re one of their little headaches.”
