James Kotecki (00:00):
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(00:42):
This is CES Tech Talk. I'm James Kotecki, the world's most powerful tech event. CES 2024 brings the future to Las Vegas, January 9th through 12th. Today, we preview the future of fun on the water. Tomorrow's aquatic adventures will be increasingly autonomous, connected, electric, and shared. At least, that's the vision from boat maker Brunswick. And joining me now to unpack what that vision means for your next vacation and the broader boating world is Brunswick CEO. David Foulkes. David, welcome to the show.
David Foulkes (01:15):
Hello, James. Nice to be here. Thank you.
James Kotecki (01:16):
So I love this concept, this ACES concept, autonomy, connectivity, electrification, and shared access. I assume as a CEO, it makes it easy for you to communicate the vision to your team, but obviously it also makes it really easy to communicate the vision externally.
(01:31):
So I'd love to kind of go through each part of this ACES framework and explain in more detail and understand kind of what these things mean, starting with autonomy. And I saw this article recently about competitive boat docking, which implies that boat docking is a skill that is difficult for many regular people. Is that a part of what the future of boating means is autonomous docking?
David Foulkes (01:55):
I think it's part of it. I think ACES serves very well because it references other verticals as well, particularly automotive. So I think there's an inherent kind of familiarity about the concepts, but the applications in boating are a bit different. I think notably on the autonomy side, as you look at what's happening in passenger vehicles, the kind of movement is really beyond kind of driver augmentation, really removing the driver from the driving experience.
(02:26):
And that is not what we want to do in recreational boating. Operating the boat is part of the experience, part of what people really enjoy. So what we're trying to do is pick those kind of pain points in boating, the most stressful points, the points that might be a deterrent for a new boater, and even generate some stress in the more experienced boater. And one of those is certainly docking. If you're docking a large boat, there's a lot of momentum that can be wind and waves and current. There can be a lot of people watching. So it's-
James Kotecki (03:00):
Yeah.
David Foulkes (03:00):
... it can be an intimidating experience for some people. So we focused our work on autonomy on that docking experience, and we're really... we're using tech that is somewhat familiar from automotive, a lot of stereo cameras around the periphery of the boat to sense the environment and interpret the environment. It is a much less structured environment than you find in automotive. I mean, the parking analogy, I think, is a pretty good one for automotive.
(03:30):
But most parking spots are fairly well delineated. There are white lines either side or there are two cars defining the parking spot. Docks are not quite so well-defined. They can be a lot of different things. They can be a seawall. They can be a purpose-built dock. So we need a lot of AI to interpret what is a dock and what isn't a dock. What is something that you can safely bring the boat up against? So that is some of the differences. A lot of inertia and wind and waves and current and this relatively unstructured environment make the docking experience for an individual.
James Kotecki (04:09):
Right.
David Foulkes (04:10):
It's sometimes a challenge. And then it also challenges the technology as well.
James Kotecki (04:15):
You're referencing it, but another way the analogy kind of breaks down is that when you're in a parking lot, it's not a fluid surface, right. So it there...
David Foulkes (04:23):
Yes.
James Kotecki (04:23):
Without getting too much into the technology, without getting too much into the weeds, but I do want to talk about the technology. Is there different kind of technology that's able to... How are you sensing the movement of the water, and how is that being factored into the AI decision-making in a literally fluid environment that's changing all the time?
David Foulkes (04:43):
Yeah, so you're right. I mean, boats have six degrees of freedom. [inaudible 00:04:47] cars have kind of two-and-a-half degrees of freedom, really. They don't go up and down very much, but boats pitch and roll and heave. So more things to think about. So that's really important when you think about the reference for any sensors. The sensors have to compensate constantly for the fact that the boat is moving, and their frame of reference changes constantly.
(05:11):
So that's an important part of it. It can make the overall experience trickier too. The other thing that water does is it reflects light, and it can appear as though it's an obstacle. So we have to... the AI has to be smart enough to continually monitor the water, understand if there are reflections coming off it and what they are, and also understand that a wave is not necessarily a hard physical obstacle that it needs to avoid. So yeah, a lot of interpretation in there.
James Kotecki (05:49):
And so, what's the best level of technology for this that's available to consumers today? Can I go and buy a boat from Brunswick right now and just press the auto dock button, and it takes care of it?
David Foulkes (06:00):
No. No, you can't. But we've come a long way with easing the docking experience, but not as far as auto docking. So a lot of big boats now are controlled with a joystick, which is a little bit like a gaming joystick.
(06:13):
You can move the boat forwards and backwards and directly sideways and spin it on its axis, and it does that by kind of vectoring the thrust from the multiple engines that are typically present on a modern boat. So we do have quite a lot of controllability. We also have something that we call Skyhook, that's our name for GPS station. Keeping that means that you can press a button, and the boat will stay in position and orientation.
James Kotecki (06:46):
Oh.
David Foulkes (06:46):
Which is an easy thing for a car. But for a boat, when there are wind and waves and current, it's not so easy. So that is a function that's readily available. We do have autopilot, but it is not a... there's no feedback in the autopilot, essentially follows a route, and if there was something in the way, then it would hit it.
James Kotecki (07:09):
Okay.
David Foulkes (07:09):
So you have to constantly be vigilant when you're in autopilot. So those are features that are already available in part of the building blocks for what we're doing right now. But this system that we're currently developing for introduction in 2025 will be the first time when you can literally press a button while you're standing off a dock. It's some distance away, and it will dock itself. The other thing, of course, with a boat is there are things above the water and things below the water.
James Kotecki (07:39):
Mm-hmm.
David Foulkes (07:40):
And that we have to think about typically cameras above the water, although we've tested lidar as well. And then we have to think about sonar beneath the water.
James Kotecki (07:52):
These being different kinds of sensors that send out signals and pinging the object and then bring the signal back to the sensor on the boat. And then that kind of tells you how far away that thing is from the boat.
David Foulkes (08:02):
That's exactly right. So, in the case of sonar, it uses a different frequency in the radiofrequency spectrum because light gets refracted and bent under water. But these different frequency waves give you a reliable feedback on where the object is.
James Kotecki (08:20):
So it sounds like there's really no technical or conceptual blocker to doing this auto dock that we're talking about. It's simply in development, and it's going to be coming out soon. Consumers can expect this relatively soon.
David Foulkes (08:34):
Yeah, they can expect it soon. Just as with what we've experienced really with autonomy in road vehicles, it's really the last 10% of the what are typically called edge cases that really kind of dictate the length of the program and the time to market. In our case, it would be can we interpret all reasonable docks as a legitimate docking site? Where do we make a cutoff and say that certain, for example, water conditions or wave conditions, the system should not be used.
James Kotecki (09:13):
Yeah.
David Foulkes (09:13):
What's the limit of its capability in, say, heavy rain, for example? So I think all of us who have a vehicle, a road vehicle that's got some kind of sensors on it and have ever been in snow, the first message you get is, "Your [inaudible 00:09:30] obscured, so certain functions are not available." Well, those kind of conditions are much more prevalent on the water. There's a lot of spray around that can be rain. So we just need to be careful that we fully define the envelope of how and when the system can be used.
James Kotecki (09:50):
This is so interesting because I think if somebody thought about this for... if someone was hearing about this for the first time, the first 20 seconds of their thought process would be, "Well, we have kind of increasingly autonomous cars. Of course, we'll get autonomous boats."
(10:03):
And you obviously are working towards that, but there are so many differences between cars and boats when you get down into the details that makes it an interesting technical challenge. So appreciate the insight into autonomy there. And we might come back to it as we connect it to these other framework pieces within ACES. The next being connectivity. So are we talking about connectivity between boats on the water, effectively, boats talking to each other?
David Foulkes (10:29):
We could be, but our primary application, we have a number of in-market applications at the moment that do a variety of tasks. But the most comprehensive really allow you to maintain contact with your boat. So that's between the captain or the boat owner and the boat typically as opposed to boat to boat or boat to infrastructure. And the purposes can be very... it can be security, it can be monitoring the boat, you can geo-fence, for example, your boat and make sure that it's secured. You can interact, you can understand what voltage there is available or charge level in the electrical system, what the level is in the gas tank, all of those kind of things. And you can also interact and, for example, switch on features that you would like to be ready when you come to the boat.
(11:23):
But, for example, air conditioning or refrigeration, those kinds of things that take some time before they're fully functional, you might want to interact and initiate them on the boat maybe an hour or so before you get there. So those are some of the primary things that we're doing. There's a lot of kind of educational content, though, that goes along with that. We try and understand what kind of boater you are. We try to offer up things that might help with your boating experience, everything from checklists to kind of how-to content. So boaters are kind of constantly learning, constantly wanting to do different things, constantly wanting to do what they do better. So we try and serve up content as well as kind of functions and features.
James Kotecki (12:11):
And is Brunswick primarily serving consumers? Because obviously you talk about this connectivity of an individual being connected to their boat with, I assume, an app or something like that. And one can imagine something similar for fleet owners, or if I own a fleet of recreational boats that I'm renting out, I want to see what all of their gas levels are, for example.
David Foulkes (12:31):
Yes, we do do that. And we'll get onto this when we talk about the S and ACES, which is shared access. We do operate fleets of boats, and we do supply engines and boats into other people's fleets. And you're exactly right. It is often important for fleet operators to understand engine hours, level in the gas tank, whether there are any error codes, for example, on any of the systems in the boat. So we offer that functionality as well. And it's an important part of the functionality for a fleet operator, certainly.
James Kotecki (13:07):
When you talk about the data that you're collecting from boat users to kind of understand the kind of boater that they are. What are some... Are there any counterintuitive things that someone listening to this conversation might not expect would be kind of behaviors of boaters or things that you can learn about boaters from this data?
David Foulkes (13:26):
Yeah, we interact with boaters always with the aim of giving them a better experience. And I don't know if it's counterintuitive or confirmatory, but I would say that, as I mentioned earlier, boaters never stop learning. We think of boaters kind of graduating through various levels of capability, and that is certainly [inaudible 00:13:50]. But there's never a point when a boater doesn't want to do something better or different from what they've done before.
(13:58):
And what we found is that even the most experienced boater enjoys new technology when they can see value in it. And, of course, we try and make sure that the technology that we provide adds value for the boater. So when we introduced, for example, joystick control of boats, we were aiming to some extent at the more kind of junior, the less experienced boater who might desire that increased level of control. But as it turns out now, if joystick control is available on a boat, it's almost sold on 95% of the boats. So everybody eventually wants that ease and capability.
James Kotecki (14:41):
Yeah. And I suppose the C always has something new to teach us, right? [inaudible 00:14:47]-
David Foulkes (14:41):
It does.
James Kotecki (14:47):
It seems like a-
David Foulkes (14:48):
It is.
James Kotecki (14:48):
... crusty old sea captain saying or something, but it seems true.
David Foulkes (14:52):
No, it is. You're always... There is always a sense, I think, of a bit of adventure when you go out on a boat. Even I do a lot of my boating on the Great Lakes, which doesn't sound maybe as exciting as doing it on the ocean, but in fact the Great Lakes often appear like seas. They have a lot of different weather conditions, prevailing conditions.
(15:16):
There's a lot of traffic around and it's a very unstructured environment. People are operating constantly in a vigilant sense of understanding what other people are doing. They've usually got census on radar. So it is a bit more of an adventure if you like, which is part of the appeal, I think, but certainly means that additional education is constantly helpful.
James Kotecki (15:43):
Mm-hmm. Let's get to the E. Electrification. Increasing autonomy, it is different from cars on the road, obviously, but following some of those trends as we're talking about. Connectivity, again following perhaps or leading or just in the mix with some of those trends. We can manage our cars with an app. We can manage our boats with an app, I suppose. Electrification, should we be thinking about that as also going the same way as land vehicles?
David Foulkes (16:09):
We should be thinking about electrification as kind of part of the portfolio of solutions that we need to create more sustainable boating. I would say we've introduced our first three models in our lineup of electric outboard motors. Outboard engines power more than 90% of all recreational boats. So outboard is the kind of form factor that we've gone after. But they're relatively lower horsepower, so they tend to be applied to smaller boats with less expectation for high performance and less expectation for a very long range. And really that's because boats require a lot more power to push them along than road vehicles do. They don't have brakes to regenerate energy, and they're very weight-sensitive.
(17:05):
So if you think about a boat a little more like an aircraft than a light-duty road vehicle, that's the kind of trade-offs that we're looking at. Or, just like an aircraft, they're very weight-sensitive, so heavy batteries are problematic. They require more power just like an aircraft, and they don't have brakes, or at least not in the air, so a bit like an aircraft. So electrification is slowly coming into boating, mostly in Europe and to some extent driven by regulation. Some lakes in Europe and some waterways in Europe are restricted for internal combustion engines. So that's where we see the largest application. At the moment, boats are interested, generally, in electrification but don't really want to make big trade-offs either in cost or range or performance or anything else.
(18:09):
And at the moment, for larger boats, there is a pretty significant trade-off. That doesn't mean that, over time, some of those barriers will not be overcome, and we're certainly expecting to be on the leading edge of that. But at the moment, we're kind of playing in the area with electrification, where we think we have the best opportunity for customer satisfaction and the best opportunity for success, which at the moment is in smaller vessels. One thing that we are doing, though, is larger vessels obviously have propulsion engines. But they typically have a combustion engine generator on board that powers all of what we call the house system. So that would be air conditioning-
James Kotecki (18:52):
Sure.
David Foulkes (18:53):
... refrigeration, the onboard electronics, infotainment type systems. And we are progressively replacing those onboard combustion engine generators with high capacity lithium-ion battery systems. We have a system that we call Fathom, which is a combination of lithium-ion batteries that we produce in our brand master vault with a power management system that attaches that battery to all of the electrical systems on the boat. A battery gets recharged by a 48-volt alternator on the engine. So that is something that we can do for larger boats where we can't directly replace the propulsion engines.
James Kotecki (19:42):
And when it comes to propulsion, do you look at things... do you imagine things like hybrids where you're using electricity in the harbor maybe to cut down on emissions, and then when you get out on the open water, you give it the gas?
David Foulkes (19:56):
To some extent. I think if you think about... I mean, obviously, if you're looking at COâ‚‚, it's not really a harbor versus it's not in the harbor. COâ‚‚ is a global issue as opposed to a local issue.
(20:13):
If you look at more of the local regulated emissions that really initially kind of came out of carb and then through EPA, like hydrocarbons and nitrous oxides and CO, of course, it's better if you don't generate those in the harbor. But it's... typically there [inaudible 00:20:33] wind and waste and current, so you don't get really high concentrations of some of those other emissions components. So typically, the trade-off with the hybrid really is if you put a battery and electric motor on a boat for use in the harbor, it is weight that you always have to carry.
James Kotecki (21:01):
Ah.
David Foulkes (21:02):
So it makes the boat less efficient when it's out of the harbor. So it depends how you prioritize things. Where if you insist on the boat having zero emissions in the harbor, then you can use a hybrid to achieve that. But you have to recognize that once it's out of the harbor, it's actually going to generate more COâ‚‚ emissions because it's pushing a heavier load because of the weight of the batteries and the weight of the motors. So it's a little bit of a, how do you prioritize some of the attributes?
James Kotecki (21:33):
Yeah, a lot of interesting trade-offs here. And the final piece of the ACES framework is shared access. We just touched on it a bit before, but can you give me some numbers to help us understand the scope of this? So people individually might want to own boats, but then there's hopefully a larger, not hopefully for you, a larger segment of people that don't want to own boats but want to be able to have this experience and rent them in some way or have this kind of shared access. So can you scope this out for us?
David Foulkes (22:00):
Yeah, so we own a boat club called Freedom Boat Club, which is by far the largest boat club in the world. And it operates like any other club really. There's an initiation fee, and then you pay monthly dues, and for that, you get access to a fleet of new boats, kind of one to three years old. You book them on an app. When you arrive at the location, they're ready for you to use, and when you finished, you drop them off. So it's extremely convenient for a lot of people, especially in metropolitan areas.
(22:33):
You don't need to think about service or maintenance or the principal investment or storing them over the winter or any of those things. We do all that for you. There are about 400 Freedom locations worldwide now, all with a fleet of boats. We have the majority in the US, but we have about 15 or 20 locations in Canada, 40 in Europe. We've just opened the first six locations in Sydney, Australia. And if you're a member of Freedom at one location, then you can vote at all the locations. So...
James Kotecki (23:09):
Hence the name, right?
David Foulkes (23:10):
Yes. It is very attractive for those people who, say, for example, you live in New York, but you go on vacation to Florida, or maybe you go on vacation to Spain or whatever it is, wherever it is, pretty much we have a boat club for you. So there's about 400 locations and about 5,000 boats in the Freedom fleet, and we have close to about 100,000 members. Now, if you think of that in terms of scale, there are about 200,000 new boats sold every year.
(23:44):
So that's the kind of scale of new boat purchases in a year. But Freedom has 100,000 members. So Freedom is genuinely a pretty significant scale in the industry, and it's growing extremely quickly. So I think people are very attracted to the convenience of the model, the variety of boats that they have access to, and we're very excited about the growth of that model. It also allows us to do... to experiment, if you like, with introducing some of the other ACES content that we mentioned earlier.
(24:21):
So, for example, we can introduce electric boats into the Freedom fleet where they can be centrally managed so the individuals don't have to worry about batteries or recharging and all those kinds of things that they might have to worry about otherwise. So we see Freedom Boat Club and shared access is a very valid alternative way to participate in boating. We're very excited about it. And also an enabler for some of the other ACES technologies.
James Kotecki (24:49):
Yeah. And as we bring this entire ACES framework together, and we think about a Freedom Boat Club member heading down to the marina in a few year's time as they're continually getting kind of new boats into the mix down there. Do you see, from a design perspective, boats continuing to basically still look like boats as we can imagine them?
(25:09):
Sure, they're more electric and sleeker and shinier, but they basically still look like boats. Could we be expecting, from a consumer perspective, things that look somewhat radically different from what we're used to? How far will this go from an optics perspective?
David Foulkes (25:23):
Yeah, I think it's definitely possible that some of those things will happen. There are some fundamentals. I mean, I think aircraft have evolved a long way, and I used that analogy earlier, but you can still tell a World War II aircraft and a current aircraft share wings and the tail and a fuselage and those kinds of things. But certainly, a lot of the technologies on board have changed very, very substantially on the propulsion side, certainly. To some extent on the hydrodynamics. And once again, there's a bit of a trade-off there.
(26:01):
We recently acquired a company called Flite, which is kind of a foiling, electric foiling surfboard company. So I don't know if you've seen any of these things, but essentially, it looks like a surfboard. There's an electric motor under the water on a mast, and it allows you to kind of float above the water on this electric surfboard. So that foiling technology is interesting to us. I think it's not quite clear what the full extent of the applications could be. It offers efficiency in some applications.
(26:42):
It's not quite as flexible in others, so we could see a little more of foiling technology come in, which would make the boats look somewhat different. I would say, though, if you look at boats, in general, they've evolved quite a lot. One of the things that is interesting about boats is they last a long time. So fiberglass boats, in particular, could easily be around for 30 years. So if you go to a typical marina, you're not necessarily seeing the latest technology. You might be seeing spread of 30 years of technology, but actually the design of boats have evolved quite a lot over that time.
James Kotecki (27:25):
Two more questions before we let you go. The first is I know that Brunswick is prioritizing getting more women involved in boating, so can you give us a sense of why that's important to Brunswick and how that's going so far?
David Foulkes (27:39):
Yeah, broadly, I think diversity is very important to us in all kinds of ways, both internally in the company and externally, in terms of accessing as many people who want to get into the boating lifestyle as possible and making sure that people who might not traditionally have been in the boating lifestyle have an opportunity to participate. What we've seen, particularly with the Freedom model, is about 35% of Freedom members are women, which is significantly more than the number of women who buy a boat. Now, to be honest, boats typically are family assets.
(28:17):
So who actually signs on the dotted line is not necessarily representative of who's participating on the water. But I think, generally, Freedom has given us some really interesting new opportunities to engage with a more diverse audience. That can be gender diversity. It can be racial and ethnic diversity as well. They all tend to be somewhat higher in Freedom. So if we can use these alternative entry points to engage a broader population, a more diverse population, I think that's only good for us and only good for boating and the industry overall.
James Kotecki (28:57):
As we wrap up here, I want to talk about CES 2024. I got a chance to go to the Brunswick booth at CES 2023. I got to stand on the deck of this beautiful boat and feel like I was the king of the world. And now, at 2024 CES, my understanding is that you're going to be doing something about the marina of the future. So we've talked about the future of boating. What does the marina of the future look like, and how will that show up at CES 2024?
David Foulkes (29:22):
Well, yes. So Brunswick is unique in the industry in that we own 18 different boat brands and a variety of marine technology businesses. And so the marina concept really is about showing the diversity of the kind of boats that we make, the technology that we can introduce on those boats, and even the ACES technologies that we described earlier, including electric boats, including some of those eFoils or e-surfboards.
(29:57):
So, really, what we're trying to show is that there are lots of entry points to get into the on-water lifestyle and boating and lots of technology that is very equivalent, and in some cases even more advanced than some of the technologies that you might be familiar with if your main kind of gateway on technology is through automotive or through kind of smart devices. There's some very interesting technology in the marine environment that I think we were anxious to continue to display.
James Kotecki (30:31):
Well, we can't wait to see it. Really appreciate you for being here with us. David Foulkes, the CEO of Brunswick, thanks so much for being on CES Tech Talk.
David Foulkes (30:40):
Thank you so much for having me. I enjoyed it very much.
James Kotecki (30:44):
And that's our show for now, but there's always more tech to talk about. So, if you're joining us on YouTube, be sure to hit that subscribe button and leave a comment. If you're joining us on Spotify or listening on Apple Podcasts, iHeartMedia, wherever you get your podcasts, be sure to hit the follow button, and you can get even more CES and prepare for Vegas at ces.tech. That's C-E-S.T-E-C-H. Our show is produced by Nicole Vidovich and Mason Manuel, recorded by Andrew Lin, and edited by Third Spoon. I'm James Kotecki, talking tech on CES Tech Talk.
