Money
The Aussie company taking on the soaring tequila market
The pandemic has seen us all drink a lot more tequila. In fact the market has increased by 30 per cent and is rapidly growing. Now one Aussie company is expanding into Queensland, to take on the soaring tequila market.
In the dry fields of tropical North Queensland, inland from the Whitsundays and the Great Barrier Reef – a massive project is underway to transform Australia’s spirits industry.
Seb Reaburn is the Master Distiller with Top Shelf International.
“The agave a project is one great big experiment right now to the level that no one has grown it in this part of dry tropical Queensland and no one has, other than a few experiments, no one has distilled it,” Seb says.
Established in 2014, Top Shelf International (TSI) is an ASX-listed Australian spirits company with global ambitions. it sees the soaring tequila market as a leap forward.
Their current brands include NED Australian Whisky and Grainshaker Hand Made Australian Vodka.
Proserpine in the heart of North Queensland
The project is happening at Prosepine, near the famous Airlie Beach. Known as a haven for backpackers. For over a century Australians have produced world class wines – but the spirits industry has recently had a massive transformation, mostly thanks to the pandemic.
Drew Fairchild is the Founder and Managing Director of Top Shelf International.
“I think Covid has accelerated a lot of trends at home cocktail culture people preparing to mix things. The younger generation have a global mindset and are wanting to experiment,” Drew says.
That experiment brought them to an abandoned eggplant farm, which will soon be home to a million agave plants as far as the eye can see. They plan to harvest 250,000 plants a year.
“I’ve spent my career in the liquor industry and through there into distilling but there were no plants. Nothing was growing that you could distil so it’s a privilege,” Seb says.
But you can’t actually call it tequila
“A lot of people come to tequila as a challenge shot. They sort of go and have one sort of attitude and culture which is really not what we are trying to do we are trying to make a top shelf.
“If you look at the wine industry, there’s a lot of wine that is a really reasonably priced. And there’s a lot of exceptional Australian wine which is an expression of place,” Seb says.
And that has led to another experiment – what to call this agave spirit. A problem Drew Fairchild is trying to fix.
“The brand strategy has to navigate that. But we think it presents an opportunity to create a category of one,” Drew says.
“When you look at the spirits industry in Australia it’s an $11 billion industry and 60% of that is dark spirit’s scotch and bourbon. So clearly it’s started around whiskey and talking to that market but also a scale.
Vodka is the single largest outside of dark spirits. So again, the opportunity to play in that space within Australian vodka. When we looked at tequila, it was the fastest growing spirit in the world,” Drew says.
The company is working with local tourism authorities in tropical North Queensland to create a great destination for tourists, especially from the southern states.
Top Shelf has plans to build a massive distillery and agave spirits bar on the property too.
Top Shelf International highlights
But in the end, it all comes down to taste.
Drew says it’s not about replicating the taste of Mexican tequila.
“We’re In the process of finalising brand. And Australian agave spirit, in many ways, when you’re talking about introducing brands competing at scale against internationals, which led the way in terms of what does an Australian whiskey taste like? We are not seeking to copy scotch or bourbon.
“We are comfortable in our own skin in terms of defining the taste profile,” Drew says.
So what’s the best mixing drink to go with Agave spirit? Seb has a rather expensive answer.
“Tequila and orange is probably a little retro nowadays. But when someone else is paying, honestly margaritas topped with champagne can’t be beaten. It’s lovely and extravagant and delicious.”
Ahron Young travelled to North Queensland as a guest of Top Shelf International.
Investors are turning to U.S. energy shares in droves, capitalizing on surging oil prices and a resilient economy while seeking protection against looming inflationary pressures.
The S&P 500 energy sector has witnessed a remarkable ascent in 2024, boasting gains of approximately 17%, effectively doubling the broader index’s year-to-date performance.
This surge has intensified in recent weeks, propelling the energy sector to the forefront of the S&P 500’s top-performing sectors.
A significant catalyst driving this rally is the relentless rise in oil prices. U.S. crude has surged by 20% year-to-date, propelled by robust economic indicators in the United States and escalating tensions in the Middle East.
Investors are also turning to energy shares as a hedge against inflation, which has proven more persistent than anticipated, threatening to derail the broader market rally.
Ayako Yoshioka, senior portfolio manager at Wealth Enhancement Group, notes that having exposure to commodities can serve as a hedge against inflationary pressures, prompting many portfolios to overweight energy stocks.
Shell Service Station
Energy companies
This sentiment is underscored by the disciplined capital spending observed among energy companies, particularly oil majors such as Exxon Mobil and Chevron.
Among the standout performers within the energy sector this year are Marathon Petroleum, which has surged by 40%, and Valero Energy, up by an impressive 33%.
As the first-quarter earnings season kicks into high gear, with reports from major companies such as Netflix, Bank of America, and Procter & Gamble, investors will closely scrutinize economic indicators such as monthly U.S. retail sales to gauge consumer behavior amidst lingering inflation concerns.
The rally in energy stocks signals a broadening of the U.S. equities rally beyond growth and technology companies that dominated last year.
However, escalating inflation expectations and concerns about a hawkish Federal Reserve could dampen investors’ appetite for non-commodities-related sectors.
Peter Tuz, president of Chase Investment Counsel Corp., highlights investors’ focus on the robust economy amidst supply bottlenecks in commodities, especially oil.
This sentiment is echoed by strategists at Morgan Stanley and RBC Capital Markets, who maintain bullish calls on energy shares, citing heightened geopolitical risks and strong economic fundamentals.
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