Top Shelf International has registered the trademark Ozcala as it prepares to release the first large-scale Australian tequila brand.

The company has planted 120,000 agave plants on a 400ha former sugar cane property just outside Airlie Beach in north Queensland, with plans to have one million in the ground over the next four years.

The region has growing conditions similar to those in the home of tequila, Mexico. It is the same distance away from the equator and the same elevation from the sea.

“We want to seed the agave category in Australia,” founder Drew Fairchild told The Australian. “We will sell some of our volume from the plants to more boutique distillers to create an industry here.’’

Top Shelf has spent the last four years building a huge distillery in the Melbourne suburb of Campbellfield. The distillery features a full automated spirit wash and beer brewhouse, Australia’s largest pot stills, and canning, bottling and kegging facilities to produce more than 70 million cans and 40 million bottles a year.

The maker of the Ned RTD range already distils and sells whisky and vodka under the NED and Grainshaker brands.

Grainshaker began production in October with three expressions – Corn Vodka, Wheat Vodka, and Rye Vodka – at its state of the art production facility.

“Whisky is our core, gin and vodka is our high growth and agave is our X factor,” Top Shelf Chairman Adem Karafili said.

Australian tequila boom during COVID-19

Tequila sales have been soaring during the pandemic. Jose Cuervo reported that its global sales were up 62% in the third quarter, to 2.3million cases.

Agave-based spirits increased by 11.4% in volume globally between 2016 and 2018, according to IWSR Drinks Market Analysis. In terms of value, agave-based spirits have increased 25.1% globally.

Proximo MD Mike Keyes, who distributes the brand in the US, said: “I think that consumers have really gotten behind two things. One is, they’ve gotten behind Margaritas. And with the on-premise closed predominantly, they have the ability to easily make those cocktails in a convenient way at home.

“The second thing I would say is that tequila has gotten a reputation as a healthy alcohol choice and a crafted alcohol choice. And it’s really — people are looking at tequila much the way they looked at high-end whiskey years ago.”

Australian tequila sales are growing too. Sales are up 21% for Campari Australia in 2020, driven by continued strength in Wild Turkey RTDs, Wild Turkey bourbon, American Honey, Campari, Cinzano Vermouth, The GlenGrant and Espolòn tequila.

“Agave has typically been a Mexican drink with its heritage there,” Karafili told The Australian earlier this year. “But now tequila is becoming its own sophisticated category. Previously the economics didn’t stack up. It has become a bit fashionable.”

Top Shelf heads to the ASX

Top Shelf will be listed on the Australian Securities Exchange in December, which will see it raise $30million in new capital and give it a market capitalisation of up to $100m.

It will use the proceeds of the IPO to put more whisky on oak b and accelerate its marketing strategy. The company’s revenue is forecast to more than double in 2021 from $7.6million to $20million.

“Vodka is the largest single spirit in the Australian market. It is a $2billion market in the bottled and ready-to-drink sector. But whisky will still be the core. By June 30 next year we will have over $100million in wholesale sales revenue on oak.”