Callaway Going Great Guns With Success of Big Bertha : Sporting Goods: The fast-growing Carlsbad golf club manufacturer is now among the top six in the nation.

Ely Callaway, the 72-year-old founder and chairman of Callaway Golf Co.in Carlsbad, follows a simple rule: Make a product that’s “demonstrably better and pleasingly different.”

Callaway’s golf clubs, including the now-famous Big Bertha driver, are definitely different. Big Bertha’s head is about 25% larger than those of traditional clubs. And, if market acceptance is any standard, the clubs are demonstrably better, having become the single most popular golf club on the market since their introduction 14 months ago.

Callaway Golf, now one of the largest half a dozen golf club manufacturers in the nation, went public late last month in one of the most eagerly awaited initial public stock offerings of the year, selling 2.6 million shares at $20 each. But the shares were in such demand on Feb. 28, the first day of trading, that they opened at $36 each in over-the-counter trading. The stock has since settled down, closing at $29 Monday.

Callaway Golf, which was founded in 1982, sells other clubs, including a line of hickory-shafted irons named after a second cousin of Callaway, golf immortal Bobby Jones. In 1989, the company introduced a set of irons called S2H2 that incorporates elements of the Big Bertha design.

But Big Bertha is the engine driving the company’s phenomenal success of late. The club, which costs up to $260, consists of an oversized stainless steel head that is 25% larger in volume but no heavier than other metal woods. The design, which includes a lightweight graphite shaft made by Aldila of Rancho Bernardo, enables golfers to swing more club head mass at no loss of speed, resulting in longer shots.

Callaway credits the “creative ingenuity” of Richard Helmstetter, who is now president at Callaway Golf, for the creation of the Big Bertha line.

The popularity of the club--President Bush and Vice President Quayle are among its many swingers--pushed Callaway’s sales to $54.7 million in 1991, more than double the company’s $21 million the previous year and more than 10 times the $4.8 million sales in 1988. The company’s success is all the more striking in light of the flatness of sales in the golf equipment industry as a whole over the past two years.

Indeed, Callaway is growing as fast as an Arnold Palmer gallery during one of the star’s fabled charges. The current employee count of 380 is double what it was 13 months ago. Next month, the company will move into a new 135,000-square-foot manufacturing and office plant in the Carlsbad Research Center, doubling plant space it now occupies.

In golf equipment sales, the upstart Callaway now ranks behind only Northwestern, Karsten (maker of Ping clubs), Taylor Made (also based in Carlsbad), Spalding and Wilson, all entrenched sporting goods companies, according to Liz Lippincott, editor at large of Golf Pro Merchandiser, a trade publication that tracks golf industry sales trends.

But the success of the Big Bertha has attracted a host of competitors. All of the major club manufacturers over the past year have introduced large-headed drivers to try to take a piece of Big Bertha’s market, Lippincott said.

The success of Big Bertha has been so overwhelming that Callaway can’t keep up with demand, leaving it more vulnerable to competition, she added.

“When someone comes up with a good product, and it’s hard for retailers to get their hands on it, they are likely to stock the second-best alternative, just to get something in their shops rather than have nothing,” Lippincott said.

For the time being, golf industry observers see good things on Callaway’s horizons. Analysts expect the company’s revenue to reach $73 million this year, and Callaway interprets the success of the stock offering as evidence that the industry believes it can maintain its upward trajectory. The $20 share price is based on a 20-times multiple of the $1-per-share profit that analysts expect the company to earn in 1992.

Mark Sullivan, publisher of Golf Pro Merchandiser of New York, a trade magazine that covers the golf industry, says the Helmstetter-led product development team, the proceeds from the stock offering and the momentum from the Big Bertha sales should combine to make Callaway Golf a formidable industry force in future years.

“The key to it is, they have been able to develop new products. S2H2 irons were innovative, and Big Bertha is the most imitated, most admired new product that’s come along in the golf industry since the Ping Eye 2 iron over a decade ago,” Sullivan said. “Callaway has more money than they ever had before, so they can hire more people, maybe buy a design if they want to.”

“People now know the Callaway brand name, and it has an allure or panache it didn’t have before,” Sullivan said. “People see a Big Bertha club in your bag and it’s like an instant conversation piece. Big Bertha or any Callaway product is a status ‘must-have,’ and golfers are certainly into status.”

The biggest unknown hovering over the company is the future role of Callaway himself. The founder sold nearly 300,000 of his shares in the initial public offering and has made it known he could sell off all of his remaining 11.4% stake, or 850,000 shares, over the coming year. He points out that his employment contract runs through 1993, and that he may limit his involvement with the company afterward.

Callaway is a courtly Georgian who also exhibits the steely-eyed persona of a businessman who, as he says, doesn’t believe in luck as the basis for business success.

Callaway comes from a well-known Georgia family that, in addition to golf star Bobby Jones, includes Howard (Bo) Callaway, a former U.S. congressman and U.S. secretary of the Army who is Ely Callaway’s first cousin. Callaway’s family founded Callaway Mills, a large textile manufacturer in La Grange, Ga., that was acquired by Milliken Textiles in the 1960s.

Ely Callaway spent 27 years in the textile industry, but he spent most of them in top management at Burlington Industries, then the largest textile company in the world. He left in 1973 as president and director of the New York-based company.

Exiting the rough-and-tumble textile industry was hardly a spur-of-the-moment decision for Callaway. In 1969, he had begun planting grapes on a piece of property he owned in Temecula, and he turned in his resignation at Burlington and founded Callaway Vineyard & Winery as soon as the vines were ready to produce market quality grapes.

“I had been in high-pressure jobs since I was 20, and I had always wanted to try farming,” Callaway said. “But I also wanted to merchandise a product with my name on it, and that’s hard for a farmer, because most farm products are commodities. But you can do it with wine, obviously, because you put your label on the bottle.”

Ever the clear-sighted businessman, Callaway selected Temecula not for any great love of Southern California but because the UC Davis wine agronomists with whom he consulted assured him that wine grapes could be grown there.

And Callaway liked the idea of being a pioneer: His was the first successful winery in the southern Riverside County area and has led the way for many other vintners since.

In 1981, when Callaway sold his winery to liquor concern Hiram-Walker for $14 million and a hefty profit, his winery was producing 65,000 cases of wine annually.