Fernando H. Green Blog: Callaway Enters Premium Market with Epic Irons

"Groundbreaking Innovation without Boundaries"

I’m having a bit of a Yoga Berra moment today. It’s Déjà vu all over again.

The CEO of a golf equipment company challenges his head of R&D to find a way to build the kind of iron that’s never been built before. Create a dream iron of sorts; no limits on time, materials or cost.

USGA shackles aside, performance with absolutely no restrictions.

Sound familiar?

Nope, I’m not talking about PXG – although there’s an argument to be made that we’re seeing yet another example of The PXG Effect. Parallels with the PXG story and last season’s release of the Titleist C16 are undeniable.

This time around the CEO is Callaway’s Chip Brewer, the R&D guy is Alan Hocknell, Callaway’s SVP of R&D, and “Alan’s iron,” as it came to be known during development, is Callaway’s new Epic Pro.

Prices start at $250 per iron, leaving little doubt that Callaway intends on entering, and if all goes well, impacting in the growing performance at a price segment of the golf equipment market. PXG may be chipping away at the mainstream, but that market's biggest player is ready to chip back.

Epic Technology…in an Iron

While the cost will certainly raise eyebrows – let’s be real, $250 per is a big ask for a mainstream brand – Callaway thinks it has something special on its hands, and that’s not the only thing the Epic iron has in common with its namesake driver.

Like Callaway’s best-selling Epic Driver, the Epic (and Epic Pro) iron features Exo Cage construction with stiffening pieces that directly connect the topline and sole. Callaway isn’t calling it Jailbreak technology in iron, but there are similarities. As it does in the driver, the connection stiffens the body to create energy lensing which allows the face to flex more and directs more energy back into the ball. The result is higher ball speeds.

Other elements of the design borrow from the current Steelhead irons (and previous Callaway models). Epic’s weight-saving hollow hosel body is attached to an improved 360 Face Cup, which helps retain ball speed on off-center hits. Worth noting, this is the first time Callaway has used its Face Cup technology in a pro series iron.

The updated design allows for a face that’s less than 1mm thick at its thinnest point, and consistently at 1mm for a significant portion of the lower part of the face, creating greater flexibility on off-center strikes. According to Callaway tolerances for thickness across the face are an impressive 1/1000 of an inch.

MIM?

Epic deviates from previous designs with the introduction of Metal-Injection Molding. The process involves baking a mixture of tungsten and steel powder at 2500° Fahrenheit for 51 hours, to create precisely weighted and positioned internal plugs that aren’t entirely dissimilar from the weights used in Titleist’s JP Wedges). The weights are then used internally as part of the Epic iron’s improved Internal Standing Wave design.

Roughly 30% of the head weight in the Epic 3-8 irons comes from the MIM’d Tungsten. The ratio of tungsten to steel, as well as the size, shape, and precise placement weight varies from iron to iron, depending on the loft. As you would expect, weight is pushed low in the long irons to promote higher trajectory, and a bit higher in the short irons to promote more control in the short irons.

Rest assured, this isn’t a lifestyle play. It’s not bedazzled version of the same ol’ same ol’ designed to entice a fool to part with his money. “These are absolutely NOT niche products,” says Harry Arnett, Callaway’s SVP of Marketing and Brand Management. “These are the highest performance products we know how to make.”

And making this product is intensive. Each piece of the Epic iron is precisely milled. In total, there are over 200 individual processes, including approximately 1800 steps and 280 quality control checkpoints. Each part is touched by more than 100 operators and technicians during the manufacturing process.

Pros Before…

One of the more interesting parts of the Epic Iron story is that, unlike most designs where a standard model is downsized to create a pro version, the Epic began started with a pro model, and that made meeting the performance goals a bit more challenging, and the results more rewarding.

This has been a fabulous experience to design exactly the iron that I would want and have it be an iron that really is bristling with firsts in terms of technologies we’ve been able to bring to product form for the first time. – Alan Hocknell

Taking all that nebulous stuff about uncharted design and creating the perfect iron off the table for a moment, the quantifiable performance goal for the Epic iron was to create a pro/player’s iron that would meet or exceed the performance of Callaway’s Apex iron - the standard model.

That’s not an easy task, but Callaway claims Epic Pro exceeds Apex standard’s ball speed by .5 MPH. It’s not a massive number, but it’s important to remain cognizant of the fact that we’re comparing a player’s iron to game-improvement iron, though it’s worth noting, the lofts are equivalent.

When the standard Epic iron model is compared to standard Apex model, Callaway says Epic is about a half a club longer.

As you might expect, some of that additional distance is attributable to stronger lofts. Other design differences are also what you’d expect. The standard Epic iron has a thicker topline, a wider sole, more offset, and a larger face.

Beyond that, Callaway isn’t overselling the differences. It’s a choice between an iron that’s compact and workable (Epic Pro) and one that’s larger, more forgiving, and a little longer (Epic standard).

Available off the Rack, but Designed for Fitting

Another interesting aspect of the Callaway Epic Iron release is that, unlike Titleist’s C16, there won’t be any forced scarcity, and unlike PXG (and the C16), Epic irons won’t be exclusive to premium fitting locations.

Callaway isn’t altering its distribution model in the least for Epic irons. While big box buyers may elect not to put Epic in all their stores, Callaway Epic irons should be available most anywhere Callaway clubs are sold. In that respect, we’re still talking about a mainstream off-the-rack offering.

Given the price point, however, it’s reasonable to assume (or at least hope) that the majority of Epic irons sets will be sold through Callaway’s fitting partners. I mean, seriously, who spends 2k on irons without getting fitted?

So, to better accommodate what should reasonably be a more fitting-centric sales model, Callaway is taking an approach that it previously reserved for the tour.

In addition to what I suppose we’d call standard weight heads, Callaway Epic irons will also be available in +5 and -5 gram versions. The idea is to allow custom fitters more flexibility to accommodate a wider variety of shafts, grips, and target swing weights without having to resort to tip weights, tungsten powder, or less elegant solutions like lead tape.

Between the tighter tolerances and flexible head weight options, I’d wager enough to buy a set of Epic irons that Epic will quickly become a darling among club fitters - especially if it lives up to its billing and holds its own against other premium priced performance-driven offerings.

Where Epic Fits

I’ve been wrong before, but I’d be shocked, absolutely, positively shocked, if Epic becomes anything close to Callaway’s best-seller, Apex remains immensely popular (and half the price), and Steelhead is currently the best-selling iron model on the market. At last check, Callaway has a 27% share of the iron market (#1 in the category), so it’s not like it’s desperate for sales.

Described by Alan Hocknell as Concept Car-type technology, Epic gives Callaway a premium flagship offering, the kind of club that says look what’s possible when the handcuffs come off. With that comes added cost.

That level of innovation, that level of technology, the level of performance is worthy of that higher price. - Alan Hocknell

The RBZ Trap?

From nearly any perspective – price, technology, market success, the Epic line represents the pinnacle of modern Callaway technology, and that’s enough to make me wonder if Callaway could be approaching its RBZ moment.

Where does it go from here?

On the positive side, it hasn’t over-saturated the market, it’s not relying on deep discounts to move its products, and it’s not showing any signs of running out of ideas. Callaway has nearly all the momentum in the golf equipment industry, but we can’t forget that others who have had best-selling products, massive market share, and all the momentum have been tripped up by a deceptively difficult question.

What’s next?

For what it’s worth, Harry Arnett likes his team’s product and innovation road map, and I suspect Callaway is going to take a conservative approach to managing the Epic franchise. I’d bet on 18-24 month product cycles, no discounting along the way, and a fresh round of excitement when the time is right to refresh the line.

But like I said, I’ve been wrong before.