La. bat makers join for low-vibration aluminum bat
When inventor Joel Albin of Livingston launched a line of aluminum bats, he quickly stumbled over a seeming paradox: other bat makers wanted to buy his company, Albin Athletics, but retail chains didn’t know about the firm or want its bats.The owners of Marucci Bat Co. in Baton Rouge, known nationally for its wood bats, were also fielding offers for their company. Eventually, Jack Marucci, Kurt Ainsworth and Joe Lawrence, the owners of Marucci Bat, and Albin formed a joint venture, Marucci/Albin, to make aluminum bats under the Marucci label.Albin said he’s not sure who approached whom."They started saying this would be a good deal, and I started saying this would be a good deal. Some way or another it just came together," Albin said.Jean McGuire, a professor in LSU’s Rucks Department of Management, said the two companies obviously hope there will be synergies between Marucci’s brand name and marketing skills and Albin Athletics’ metal bat-making know-how.Albin Athletics gets access to brand recognition, marketing, a sales force and perhaps more money for research, McGuire said.Marucci Bat Co. gains access to a new product line and new technologies without the expense of having to develop that expertise on its own. For example, Albin Athletics has patented a device that eliminates much of the bat’s vibration.Marucci also gains access to a much larger and more profitable market.The U.S. wholesale market for baseball and softball bats was $252 million in 2008, said Mike May, a spokesman for the Sporting Goods Manufacturers Association. Wood bats made up around 5 percent of the total.Last year, founder Jack Marucci told USA Today that the company planned to make 15,000 bats. The company, he said, would have to sell souvenir bats and generate online sales to make a profit; this despite a client list of around 150 minor and major league players, including Albert Pujols and Manny Ramirez, two of baseball’s most feared hitters.Lawrence said the company expects to sell 20,000 wooden bats this year, one-third more than in 2008, and possibly as many as 25,000.Ainsworth said around 40 percent of Marucci’s sales are to professional players. Those bats are less profitable because the company is very picky about those bats and spends more time producing them, he added.The rest are sold online or through high-end, boutique sporting goods stores in the Northeast, where some adult leagues require wood bats, he said.While the company has avoided selling its wooden bats through large, chain retailers no Louisiana stores carry the bats that will change with the aluminum bats, Ainsworth said."We’re negotiating with all of the major retailers," Ainsworth said.Last year, Albin Athletics sold around 1,000 aluminum bats, Albin said. The company had some early successes.The South Lake Charles Little League team that nearly made it to the Little League World Series title game used Albin bats, and Albin is the official bat of the Louisiana Baseball Coaches Association.But Albin expects sales under the Marucci label to rapidly accelerate, to anywhere from 5,000 to 20,000 bats in the partnership’s first year."Whether we allow it to grow that fast, I don’t know," Albin said.The Connecticut factory that makes Albin’s bats is capable of producing as many as 100,000 bats in a year, but the partners want to take a methodical approach, making sure quality control remains high as production grows, he said."Probably the second year, we’re going to really cock it back and get production ramped up," Albin said.The production numbers and goals will depend on a number of things, he said, including maintaining quality control, the cost of aluminum and the economy.Right now, it looks like everything is down but baseball, Albin said. He has spoken to some companies that are selling record numbers of baseballs."One thing for sure, baseball continues on. They may not buy a new 4-wheeler or join a new hunting club, but they’re surely going to let their kid play baseball," Albin said.Albin said the partners have not decided on how they will finance the production expansion when it comes. A number of potential investors have approached the new partnership, and the partners have also discussed their options with a few banks, he said. Financing is not a problem, but the company wants to emphasize quality control first and foremost.Once the demand for the bats has been created, production will follow, he said.Under the joint venture, Albin will oversee research and development. Ainsworth, Lawrence and Jim Clarke, who is Albin Athletics former sales manager, will head the joint venture’s sales team.The partnership’s first product will be an aluminum bat called the "Cat 5." A Category 5 hurricane is the most powerful storm on the hurricane scale, with winds of more than 155 miles per hour. The joint venture members say they hope and expect to become major players in the aluminum bat industry.Still McGuire, the LSU professor, said there are lots of potential pitfalls facing the new partners. "It’s always tempting to claim there will be synergies, but synergies are a very illusive concept and are sometimes very difficult to actually attain," she said.The two firms’ cultures might clash, McGuire said. The Marucci company might not have the skills to sell aluminum bats.Saviour Nwachakwu (pronounced Nah watch choo koo), a professor in the department of marketing and management in Southern University’s college of business, said there are other possible disadvantages.By going into a joint venture, Albin Athletics is giving up the chance to develop its own brand name over the long term, said Nwachakwu. Meanwhile, Marucci Bat Co. gives up the opportunity to establish a sector the firm might have dominated if it had started its own aluminum bat business.Ainsworth said in a press release that the partners quickly realized the earnings potential for a joint venture were much greater than if both companies continued on their current and separate paths.