Carb-free beer, low-cal vodka iced tea, sugar-free white wine spritzers — you know Ace Beverage Group is on the right trajectory with ready-to-drink (RTD) beverages, catering to consumers of today who value health and taste equally. The founder of the company is the entrepreneur Mike Wagman, who knows that for start-ups, value creation is primary. This is reflected in the innovative new product development and testing process implemented by the company. Recently, Ace Beverage Group won the LCBO’s annual award for best new product in the RTD category for their boxed Cottage Springs Vodka Water from April 2021.
What are the main factors of Ace Beverage Group’s success?
First, our mission. We aim to provide consumers with better-for-you and better-tasting alcoholic beverages — products for “The Way We Drink Today,” as we like to say. This gives our company an important north star that guides everything we do.
Second, brand traction. Our leading brand, Cottage Springs, is the number one, premium, better-for-you brand in Canada in the fast-growing ready-to-drink (RTD) category. The brand has broad appeal, resonating across different age groups, geographies, and drinking occasions. It’s an authentic, unassuming, and sometimes humorous brand that has built significant customer loyalty and engagement.
Third, innovation. Cottage Springs is experiencing hockey stick growth, growing broadly and incrementally across four product lines: vodka soda, vodka water, vodka lemonade, and vodka iced tea. We’ve accomplished this through a thoughtful innovation strategy where we’ve successfully launched new product lines, flavours, and formats. Generally, we like to focus on large, high-growth categories where we can leverage our brand strength and deliver the most compelling beverages to consumers, based on nutritional (no/low sugar, carbs, and calories) and taste profile (as good or better than market alternatives).
When you look back, is there anything you wish you had done differently while launching Ace Beverage Group?
One thing I would’ve done differently is invest in a robust people and culture function. We derive so much value and competitive edge from how our teams operate and work together. In order to foster that culture of innovation, impact, and integrity, there’s a lot of work behind the scenes. But the return on that investment is exponential. I give a lot of credit here to our Head of People and Culture, Becca Lo.
How does the company come up with innovative offerings and test those out?
We have a rigorous 74-step innovation process. This has been instrumental to the industry-leading results we’ve seen with our innovations. Key aspects of our process include:
Ideation – We conduct significant market and consumer research to come up with new ideas. In addition, we have unique company-wide events — such as Innovation Day competitions and monthly Innovation Happy Hours — where individuals or teams across the company pitch new concepts. As we’ve really institutionalized our innovation culture, the ideation we get from employees across the company is impressive and deeply informs our innovation pipeline.
Liquid development – We have an in-house innovation lab that develops all our recipes. We tend to go through many dozens of iterations for each new product in order to perfect the taste and drinking experience.
Packaging – Hand-in-hand with liquid development, our in-house marketing team develops branding and packaging for all our new concepts.
Customer discovery – This involves internal and external tastings, as well as extensive consumer surveys. The data that comes from good customer discovery is a powerful way to ensure product–market fit.
Is there a particular approach to marketing and promotional activities that has proven to work for the company?
From a marketing perspective, we’ve had the most success in two areas: initiatives that allow us to interact directly with customers, such as consumer samplings, social media, and brand experiences; and promotional programs at retail that provide brand exposure to consumers close to the point of purchase.
What would your advice be for anyone who wishes to be an entrepreneur?
My main advice to an aspiring entrepreneur would be to get started! In my experience, you need time to learn and go through some likely failure and pivoting. It’s a critical part of the journey to success.
My other piece of advice would be to find a zone where your passion can overlap with a great market opportunity. It’s much easier to build something successful when you’re passionate about it and can get a boost from market tailwinds.
What are the core tenets of good leadership for you?
Establishing a company’s mission is the cornerstone of leadership for an organization. It can evolve over time (and likely should), but everyone needs to be chasing that exciting north star for the company to execute and win.
I’m also a firm believer in a culture of empowerment. Our organization is relatively flat, highly collaborative, and generally trusting of people. When you have amazing people and put good systems in place to allow for their creativity and hustle, great things can happen.
Arslan Ahmed | Staff Writer
