In this podcast news bulletin on Drinks Adventures.
- ASX-listed Top Shelf bullish on Australian Agave spirits
- Mighty Craft invests heavily in whisky; and
- James Squire puts a new spin on zero alcohol beer.
This article is a podcast transcript. Listening provides the best experience! Click here to open the episode in your podcast player or press play in the media player below.
Top Shelf International updates ASX on Australian Agave Project
JAMES ATKINSON: ASX-listed spirits company Top Shelf International has delivered on the revenue and earnings forecasts tabled in its December 2020 Initial Public Offering.
Top Shelf – the company behind NED Whisky, Grainshaker Vodka and the Australian Agave Project in Queensland – reported a loss of $6.1 million and revenue of $20 million for the financial year ended June 30.
According to chief executive Drew Fairchild, Top Shelf is clearly Australia’s largest and fastest growing Australian spirits company, and its only multi-branded spirits company.
DREW FAIRCHILD: We are the fastest growing whisky. We’re the fastest growing Australian vodka. At the half we had $270 million in net sales value in hand of our inventory. We are the largest in terms of whisky and the largest in terms of vodka distillation capacity and, of course the only and largest agave player, one that is globally relevant with the production capacity to put us into the top 25 in the world.
JAMES ATKINSON: By April 2021, Top Shelf had planted 216,000 agaves at its farm in The Whitsundays and Fairchild said the company it is on track to begin production of agave spirit in the second half of the 2023 calendar year.
The company recently announced the agave project will be headed up by Trent Fraser, formerly of Moët Hennessy Louis Vuitton, who in four years built Volcan tequila to be among the top five super premium tequila brands in the world.
Addressing the results presentation, Fraser said the Australian Agave project is an immense opportunity for Top Shelf.
TRENT FRASER: The strongest endorsement I can give you is in fact, actually in my own actions. I wouldn’t uproot my personal and professional life if I didn’t think this opportunity would work. I had a pretty good job and life in New York. But this new frontier of an Australian agave with the TSI, it’s just far too powerful and promising. I’d absolutely kick myself and regret not getting on a plane to come home.
JAMES ATKINSON: Originally from Adelaide, Fraser spent a number of years at Penfolds Wines prior to heading up the Dom Perignon Champagne brand for LVMH in the US between 2008 and 2015.
TRENT FRASER: After doubling that business, I was asked to go and build a tequila brand with a very wealthy Mexican family in 2015. So it’s pretty fair to say I’ve been here before and I have done it. It took us a couple of years to get up and running. In 2017 we launched, won a bunch of awards both for liquid and design. Met sales targets, most importantly, and I’m very proud just to leave a great brand legacy behind.
JAMES ATKINSON: Fraser believes there is significant export potential for Australian agave spirits in North America, where tequila and mezcal are currently “on fire”.
TRENT FRASER: We look at it like a truly regional Australian expressive and terroir driven liquid, which will play into the cues of the category but equally offer a unique and differentiating appeal. We always make the reference internally a lot to wine. It took a little bit of time for people to understand that great wine can be made outside of France and we all know that it can, and I think very quickly people are going to realise the same thing about agave.
Hopefully you’re a little bit aware of the agronomy team’s unbelievable work. It’s unparalleled in terms of its science and its approach and its nurturing. It will definitely provide us with a much brighter, richer and advanced liquid to work with. I could go on for hours about this, but I’ll try to sort of wrap it up a little bit. Just in summary, humbly, I not only think this will work, but I think we’ll compete with the very best of them on the global stage.
Mighty Craft updates ASX on Australian whisky operations
JAMES ATKINSON: Also on the ASX, craft beverage accelerator Mighty Craft has reported a $9.8 million loss on the back of $29.3 million revenue.
Chief executive Mark Haysman said highlights included the successful launch of the Seven Season Spirits range, which you should be familiar with from our interview with founder Daniel Motlop on the Drinks Adventures podcast earlier this year.
Mark HAYSMAN: We officially launched that in March/April. So our indigenous-backed business with Daniel Motlop and his family owning a stake in that has hit the ground running and looks like it’s going to be a great brand for us going forward. Kangaroo Island Distillery as well, so we’re upgrading that. We’re probably nearly 70% through that upgrade and we’re about to relaunch the Kangaroo Island Spirits brand in October this year. On the back of the new still going in on Kangaroo Island, where we’ll have a dedicated whisky still of some size, we’ll be launching the Kangaroo Island whisky expression in the new year. But prior to that we’ll be launching Hidden Lake, which is our ultra premium luxury brand out of Tasmania.
JAMES ATKINSON: Haysman said Mighty Craft is now one of Australia’s largest independent craft spirits producers following the acquisition of Adelaide Hills Group – including distiller 78 Degrees – announced in June.
Mighty Craft’s current whisky inventory is valued at $20 million, Haysman said, and it will soon have a portfolio of whiskies spread across different price points.
Mark HAYSMAN: So there will be 78 Degrees in the Australian whisky category there, that sits at sort of $85 to $95. It’s going to go head-to-head with entry level sort of premium whisky, so that should get a very strong footprint in the market. And then, obviously it has its more premium expression in the native grain weeping grass, which sits at $400 to $450 a bottle. Then you overlay Kangaroo Island Spirits that, sort of that $120 to $150 range as well. And then as we come through up into Hidden Lake, that’s going to be certainly more high end, limited availability of stock. It’s going to be probably more in the order of $150 to $250 range, and then upwards of $300 even up to $400 in terms of the expressions there given the quality of the actual product and how that’s aged and matured.
James Squire Zero enters non-alcoholic craft beer segment
JAMES ATKINSON: Lion-owned craft beer brand James Squire has entered the alcohol-free segment with James Squire Zero.
There’s no base beer style declared on the label of the beer, but Lion Chief Brewer Idris Jama says the intention was to make a full-flavoured premium lager, just with zero alcohol content.
Most James Squire beers start out being brewed on a smaller at the Malt Shovel Brewery in Camperdown, but this one was created at the Tooheys Brewery in Lidcombe, where Lion has recently invested $6 million on a de-alcoholising plant.
IDRIS JAMA: It is a change from how we normally do things that’s really because of the plant and equipment you need to get down to 0.0% ABV in alcohol concentration. 0.5% ABV beers can be brewed at places like Malt Shovel Brewery without having special plant and equipment, just by controlling fermentation and the like. But we bought a special dealcoholising plant from Germany to enable us to remove alcohol from a beer once we once we’ve brewed one.
We’ve only got one of them because they’re pretty expensive. So we put it out at [the Tooheys Brewery in] Lidcombe, I think it was last November got it installed, and then we’ve been working on it since to get it up and running this year. The key thing is, with this method, it’s been around for a little bit longer. There are newer methods available to do the same thing, remove alcohol from a brewed beer. This method is a thermal distillation approach.
JAMES ATKINSON: I noticed looking at the ingredients it contains hop extract and malt extract. Maybe you could just tell us a bit more about how the beer was made?
IDRIS JAMA: What we do is you make a lager, you take the ethanol out of the lager using an evaporator. But then we add some hop essences back into the beer to ensure that we can deliver the balanced flavour that we’re looking for. Because using the evaporator, you can lose some of the hop notes, so we want to make sure we put those hop notes back in there and the malt extract, which is completely natural and made from malt, we use that as well to make sure we balance the body that we want in the beer as well.
JAMES ATKINSON: Was there much of a conversation around, ‘this beer, it needs to be zero. It can’t be 0.5%’. Because I think this beer probably is quite unique among most of the ‘non-alcoholic’ beers that are in the craft segment at least, in that a lot of them are 0.5% or possibly a bit higher, 0.9%. Was it Lion’s belief that it had to be absolutely nothing, zero.
IDRIS JAMA: I just think they’re just different parts of that segment. Some consumers are after a 0.0, and that can open up to different consumers as well who are looking to completely avoid any alcohol and some consumers are happy with 0.5. And you know, I think you need to offer something for both types of consumer. So really, that’s what it was about.
I think the benefit of using this sort of technology versus making a sort of normal 0.5 is it is overall a better tasting beer because you’ve made a full-strength beer, you’ve made a normal beer and then you’ve taken the alcohol out, as opposed to not making a beer with a normal alcohol content to start with, which does give you a different flavour, balance and characteristics.
JAMES ATKINSON: That’s all for today. See you again next Tuesday for another full-length episode.