Ace Beverage Group quenches thirst for fresh approach to innovation

How the beverage company is nailing product ideation and corporate team-building all at once.

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By Will Novosedlik

Is it high time to get innovative with, well, innovation?

As with most forces trending in business and culture, the arc of influence can be transitory, and the current challenge with innovation is to execute.

The sad truth is that most companies, especially large ones, fail at innovation. Simply put, corporate culture isn’t built to disrupt, and while the operational efficiency it creates can be admirable, growth and competitive advantage typically don’t experience the same success.

So what do they do? They either hire a third party – usually a management consulting firm or an agency – to do it for them, or they create an in-house innovation team to work away until they have something they can pitch to executives. But both approaches lack ownership, and when innovation comes knocking, the silos harden, often leaving great ideas to end up in the shredder.

However, beverage company Ace Beverage Group is attempting to change this approach in a substantial way.

Ace Beverage Group has a “culture of innovation,” says co-founder Cam McDonald, and this week, it held (another) one-day product idea brainstorming session where everyone in the company was invited to be on one of seven cross-functional teams, each challenged to come up with the next great innovation in alcoholic beverages.

The key words here are “everyone” and “cross-functional.”

McDonald explains, “At Ace Beverage Group, we do have a director of innovation, but we encourage ideation from everybody. And we’ve got several different mechanisms that bring that out. Our innovation day is the equivalent of a hackathon. You’ve got six hours to come up with an idea and present it to judges. The idea has to have a liquid, a brand, and a business case. It’s an incredible day because it’s all about collaboration across different departments.”

Aside from being an ideation session, it’s also an effective team building exercise. It reinforces that innovation can come from anybody within the organization. And because it’s always a team effort, by the time the innovation hits the market, everyone from sales to marketing to finance to production is totally, enthusiastically behind it.

Once a month, Ace Beverage Group also has an “innovation happy hour,” where two people on the team pitch an idea. If it gets positive feedback, they’ll start making the liquid right away to begin getting broader feedback. The idea for Cottage Springs Hard Tea originated in an innovation happy hour.

“It was suggested by a team member that hard tea is a fast-growing category, but the current offerings are full of sugar,” says McDonald. “If we could make a liquid that tasted great, but had the nutritional promise of being just a hundred calories and one gram of sugar, this could be a winning idea. It’s been the most successful innovation in our company’s history.”

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Validation is a big part of the process. For that, Ace Beverage Group has looked to some of Silicon Valley innovator Steve Blank’s ideas.

Blank believes that start-ups generally obsess over product development but forget about customer development. So no matter how great your idea is, until you find a customer with a need that your idea uniquely fulfills and is able to scale, the idea will fail. Product/market fit only comes after successive rounds of iteration and validation with customers. It’s a risk-averse approach for preventing your idea from being one of the nine in 10 that never take off.

Using this method has earned Ace Beverage Group kudos from the marketplace, resulting in leading products like its Cottage Springs Hard Tea. Cottage Springs is currently poised to displace long-time RTD leader White Claw as the number one seller in Ontario. Ace Beverage Group products have been named by LCBO as the top three new innovations launched this year.

To promote their products, Ace Beverage Group uses a combination of sampling, paid digital, OOH, sponsorships and influencer marketing. For OOH, the brand typically spends $200,000, covering northern Ontario, London, Kingston and Hamilton, versus spending solely in Toronto.

The company recently delivered 37,000 samples before the May 24 weekend, with dedicated street sampling teams covering Ontario. This summer will see a $500,000 spend on Facebook, Instagram, YouTube, Amazon, Twitch, Pinterest and Reddit. The brand will also sponsor Golf Canada’s RBC Open and Tennis Canada’s August tournament.