Q&A Series: CEO of Ace Beverage Group
In 2017, Kensington Capital Partners added Ace Hill Beer which is now known as Ace Beverage Group, the makers of high-quality, easy-drinking beverages into our portfolio. The company has been experiencing tremendous growth and popularity in the past year. To mark the start of summer, we had the pleasure of chatting with the CEO of Ace Beverage Group, Mike Wagman, to reflect on the company’s most recent activities and learn about how it all started.
Q: For those who are not familiar with the space, can you talk about the origin of Ace Hill and how the company moved from just an idea to a successful beverage business and lifestyle brand today?
A: We launched Ace Hill in Toronto as a premium craft beer brand in 2016. We built a strong following behind the brand through a high-quality, easy-drinking product, strategic partnerships with venues, a differentiated aesthetic and sales hustle.
From there, having developed a great community of customers, we identified and capitalized on two key adjacent and emerging opportunities: first, the ready-to-drink (RTD) beverage alcohol space; and second, the recreational cannabis industry which was being legalized in Canada.
Today, Ace Beverage Group is a rapidly growing, better-for-you beverage alcohol company in Canada. We focus on Generation Z and Millennial consumers and offer a portfolio of leading products in hard seltzer, craft beer, cider and more. Notably, we are a leader in the fast-growing Canadian seltzer market and have the #2 market share position in Ontario through our Cottage Springs brand.
On the cannabis front, we developed a sister cannabis company, Ace Valley, which launched in 2018 and was acquired by Canopy Growth in 2021.
Q: The beverage industry is very competitive, what are some of the growing pains that you have experienced?
A: Lots of growing pains along the way, big and small. Our initial category of focus, craft beer, experienced numerous tailwinds in our first few years of operations, — which forced us to think hard about where we were going to find strategic opportunities for scale and growth. More regularly, all kinds of challenges across our value chain. We found it is particularly hard to be an upstart in the space, trying to scale up and compete against much bigger established players.
Q: How has covid-19 affected your business, if any?
A: The biggest impact has been the shutdown of bars and restaurants, where we have effectively lost the on-premise sales channel since Covid started. However, as our portfolio has become stronger and more RTD-focused and we have experienced significant growth at retail, we have been able to gain exponential overall growth.
The other big area of impact has been with our team generally working from home, which has been unfortunate for a very social company!
Q: The Ace Hill branding is difficult to miss, what was the idea behind it and why do you think the brand gained so much traction?
A: Good branding has been a key success factor for us. Some of it has been instinctual where we are developing branding that really appeals to us and our team personally and some of it has been quite strategic where we work hard to ensure our brand is well-aligned with the values of our customers. Fortunately, those two have come together often and that has given our brands the ability to stand out and be authentic.
The idea behind our initial Ace Hill branding was to capture attention with a very thoughtful, minimalistic design, which stood out in a crowded sea of competitors.
Q: For aspiring entrepreneurs who are looking to start their own business and get it off the ground, what advice would you give?
A: Don’t underestimate the challenge ahead, but at the same time if you’re passionate and crazy enough to embark on the journey, then go for it and don’t look back!
Q: How did you come across Kensington? What role did Kensington play in terms of growth for the company?
A: My co-founder Blake Anderson had known Kirk Hamilton at Kensington through mutual friends. We pitched Kensington to lead our Series A in 2017 and they were very supportive of our vision to scale our brand platform. Kensington has supported us through several financing and M&A transactions and we have had a great experience working with Kirk and Eamonn McConnell on our Board of Directors.
Q: What is the team excited about in the near future?
A: Summer and post-Covid reopening!
We’d like to thank Mike Wagman for his time, and we can’t wait to see what happens next for Ace Beverage Group!