Today we're talking the three biggest boat shows on the planet for innovation and boating: CES Las Vegas, which is actually an innovation show, Dusseldorf, and the Miami International Boat Show, and what they mean for the future of our industry and everything in between. Welcome back to Yachting Unplugged, the show where we cut through all the fluff and talk just boats, business, and what's actually happening out there on the water. My name is Kim, and I'm known as the boat boss and managing partner of FB Marine Group. And today I'm joined by Dave Foulkes, who's the chairman and CEO of Brunswick, which is the powerhouse behind some of the biggest brands in the marine industry. Propulsion, electronics, boats, you name it, they do it. Dave, thanks for being on Yachting Unplugged.
It's a great pleasure, Kim. As always, great to see you.
Good to see you, too. So, the agenda is basically we're going to talk about CES, go out to Dusseldorf, and then really get into Miami and see what to expect at the Miami show. So Dave, let's talk about CES. It's known as the tech Super Bowl. It's Brunswick's way of showing up in a space that they're normally not there. Our industry never goes to that show, but it's a global stage for innovation. So let's take us back as to why. What made you say let's go? And you were the first ones in our industry, I believe, that did that. And what has it done for your company?
Yeah, we were the first and still are really the only recreational marine company that exhibits at CES. This is our sixth year, just two weeks ago in January. Sixth time. I actually used to go there before when I was the chief technology officer before I was the CEO. And I would just go there with a videographer and take movies of all of the new tech and then bring it back and share it inside the company. But then we decided when I became CEO, we decided we should go there. And it was interesting, you know, I would go there and see, yes, it's consumer electronics, you know, it used to be about consumer electronics, laptops and smart devices, phones and stuff, but over time it evolved to be anything with embedded software or control. So it's cars and planes and agricultural equipment. So it was like, why wouldn't we be there? We have the same technology, even better technology in a lot of cases. Our electronics, our propulsion, our sensors like radar and sonar, they're all equivalent or even sometimes in advance of those other verticals like automotive and aviation. So it just seemed like we should be there. And so we've been there for six years and it's an incredible show. It's the only show where we exhibit as Brunswick. In every other show we go to, you know, it's our go-to-market brands, Mercury Marine or Sea Ray or Boston Whaler. But there we go as Brunswick to show the scale and power of our technology and integration, our portfolio of businesses, and we get incredible exposure. You get a certain amount of exposure at a boat show, you get 100 times that at CES. I think this year we got 3.6 billion impressions. So it's a crazy number, crazy exposure. You meet suppliers and partners who might want to work for you. So yeah, it's a great show for us. We have the whole team there. I can't remember how many people we have, but probably 50 or so people there. So it's a great way to just get together at the beginning of the year with a lot of excitement. And you know, that excitement then it kind of builds at the show and then carries, flows into the boat shows and other things. And of course, we have 15,000 employees. So it's only a small fraction of the employee base that can actually be there in person, but every day we send back videos and highlights, you know, so hopefully everybody feels like they kind of attend it virtually. So it's a really energizing event to kick off the new year.
One thing that you and I and we've heard many times from you and the team is that your ACES strategy, and now I truly believe that it's complete. You can truly say that you rolled out the whole initiative. Can you just give us a brief like what it is for those that don't know? I think most of us know, and then how did you finally get to that point where you completed the initiative?
Yes. So ACES stands for autonomous, connected, electrified, and shared. And if you think about those four themes, they present and so many are very topical at the moment in on-road vehicles with robo taxis and everything's connected now. You don't buy anything that doesn't have a companion app. It could be virtually anything. Electrification is really interesting. We launched five electric boats. Electrification works in some parts of marine but not broadly in marine, but it's still an important consideration. We also have developed onboard systems that replace generators, for example, with electrical power management. So it has its place in marine but it's not the same as on-road. And then shared, the S in ACES for us is Freedom Boat Club, which has been enormously successful for us, 140 locations around the world. We just opened one in Tasmania and one in... it's crazy. So ACES, you know, ironically the last part of that we commercialized was the autonomous part. And at CES we showed our ADAS autonomous boating system which we launched at IBEX. So yeah, that was really the last part of that that's been commercialized. We already have connectivity solutions, electric product in the marketplace, obviously the S for shared access, Freedom Boat Club is very well established and the biggest boat club in the world. We just needed the A, funny to put out the A as DEF, which is pretty funny.
We did. Yes. I didn't even think about that. Yeah, that's very funny. I wish I could have used that. But yeah, it was just nice because we started that journey, you know, when I became CEO six years ago. Six, seven. Yes, my eighth year I think of CEO, 2019, we kind of kicked off that strategy. And at the time it was a strategy and some plans, but in our period it's become a set of commercialized solutions and I think they're differentiated solutions as well.
So what, so when you're there, what does the world think when they see, they walk in and you see these little technologies or you know, you have these exhibits but nothing to the magnitude of what you have. What are people saying when they walk up and see you?
It's well, there's a bit of shock and awe about seeing a huge boat in a show like that. So we take advantage of that. You know, there's the tech part of CES but there is a show part of CES, you know, it's a show and people go there to see the technology, they also go there for the experience as well. And you will see a lot of road vehicles, you'll certainly see even agricultural equipment, John Deere for example exhibits at CES. But when you come around the corner and maybe boats are not part of your everyday life and suddenly there's these two or three beautiful boats sitting there. I don't know anything in the world probably that people would rather have their photo taken with than a beautiful boat. So we take advantage of that. We bring these beautiful boats front and center. They have these very beautifully designed wraps around them that makes them pop even more. And I think people kind of come into the booth or the exhibit just because they're attracted by wanting to have a photo taken with these boats and then they get, you know, we lure them into the technology.
Exactly. Which is kind of a fun way to do it.
Well, hopefully we'll be able to convert some of those people into future boaters. That's for sure. Well, what was the one thing that you can say that you saw there that said that might work in our industry? Is there one technology that stood out maybe that...
There's always a theme, you know, every show that I've been to. There was kind of electrification and drones and all kinds of stuff over time, but clearly this was the year of artificial intelligence. There were a lot of AI agents, which I think we're all getting very familiar with. That's the kind of task-specific versions of AI that help you do various things. And then there was what's becoming more known as physical AI, which is AI embodied in some kind of robot. That could be a robot that does a specific job or it could be more like a humanoid general-purpose robot. And there were a few of those there and they're getting more and more convincing. They move much more like a human now. Some of them are quite friendly looking, some of them are a bit intimidating. But yeah, I mean, when we think about Auto Captain, you know, like our system, it's very much embedded in the structure of the boat, cameras in the hardtop and those kind of things. You could imagine the future a humanoid-ish captain actually doing that role. But certainly there were a lot of AI agents in there to help you do things better or more intuitively. And we showed some concepts for that, but there were some that were really well-developed that just make complex tasks much more easy to perform. And I think we all know that boats can be complex to operate. And when you get your boat, you get a satchel full of manuals for all of the subsystems on the boats and probably not everybody reads every word of those manuals. So if you have an AI agent that's able to respond to prompts or even proactive or advise you of certain things, I think that is going to be extremely helpful on boats in the near future.
So AI agents seem to be the underlying theme, but what was the one gadget you wanted to take home?
You know, some of these kind of robots are kind of... honestly though, Kim, I'm a bit of a car guy. So, and what they always do at these shows is they kind of seduce you with something glamorous and then you go see it and it's like, hey, there's some tech behind it. But there are a lot of Ferraris and Lamborghinis around that I would have easily taken home.
Well, it's a great show. I hope we see more marine-related companies at CES. I hope to go next year. I was planning on going this year but it just didn't work out. So, I'm really excited to see what next year holds for you guys because every year seems to be bigger and better for you.
I love it. It does. All right, moving across the pond. We're going to talk about Dusseldorf. And that was a Dusseldorf International Boat Show in Germany was one that you and I both spoke about. You were there. It is a huge crowd, a massive epic venue of I think 16 locations if I'm not mistaken. You said something that really stuck with me when we spoke while you were there and you said the feel is very different. What does that feel like for those of us that, you know, what does Dusseldorf do differently that the US shows do not?
Well, I think what's really interesting is it's the biggest show in the world but it's indoors and it's in the middle of winter in Germany. And that is not a combination you would intuitively think of. How do you create this amazing experience in the middle of winter in Germany inside when boating and marine is really about being outside and usually in beautiful weather. But they do a wonderful job of showing the full scope of the marine ecosystem. And they do it, they have a 100-foot hall there, big boats from Princess and companies like that, some of the big European builders that they float down the Rhine on barges. The Rhine passes right next to the convention center and then they have a crane that just pulls them over in the convention center. So you see these beautiful huge yachts out of the water and yachts are like icebergs. You see them, they look big but when you see them out of the water they look three times the size. So there's huge impressive scale of everything but then they bring a lot of water inside. They have people doing, they have these huge pools where they're inside some of the halls where there are people having e-foil races or sailing races or even remote-controlled sailboat races. So it's a very dynamic atmosphere. So they try to bring these disciplines inside marine to life and attract people in addition to just showing things. There's just a lot of activity and a lot of interaction which they do extremely well. But then just a lot of boat brands with a lot of innovation and creativity in the boats. I think boats in obviously northern Europe, Scandinavia and boats in the Med are quite different, but they both have different styles and you can see these different styles taking off in the US as well, particularly the adventure expedition classes of boats. They just do a really good job of showing the full breadth of the industry and you see kids in there, you see older people. Some are interested in the boats, some are interested in the surfboards. It's just a cool atmosphere, big culture.
It sounds like an amazing show. I heard a lot of good things that came out of it. But you said that you spoke on a panel. What were some of the opportunities, but also what were some of the challenges that you were hearing from everybody at Dusseldorf?
We were talking about how can industry and government collaborate to improve access to boating and boating affordability and generally promote the industry. And if you think about the EU has 27 countries in it. Of course they are unified in some respects but they still have 27 different sets of regulations and legislation and even beneath that on a local level often there are different regulations affecting boating and even different priorities and perspectives. So we were talking about how could we work better together and how could European authorities better support the industry. It's a really important, if you think about recreational boating, the US is the biggest market. It's about 70% of our revenues. Next big is Europe. It's about 15% of our revenues. We don't have a big market like, unlike automotive for example which has got big markets like China and India. There's no recreational boating. So markets like Europe are super important and we need to make sure we work together to maintain access to water, to keep boating affordable. Well, I think there is clearly a change in perspective in the EU at the moment. They realize they've made the regulatory environment very complex for businesses and are trying to do something to unify regulations and take some of the complexity out of it.
