After living through its own corporate version of a Mexican telenovela, which almost led to literally selling the farm but instead ended with a $30 million capital raise and corporate restructure after the founder-CEO departed, the ASX-listed company behind NED Australian Whisky is finally launching its agave spirit Act of Treason.
Melbourne-based Top Shelf International (ASX: TSI) first announced the Act of Treason brand in September 2022 at a time when shares were trading at around $1.30 each. Today they are worth just 24c, and the company has pumped millions into a vision to establish the largest spirit-producing agave estate outside Mexico.
Agaves are used to make Mexico's signature spirits tequila and mezcal, but similar spirits made outside the country cannot be given these names due to rules around appellation of origin.
The new product is the brainchild of Top Shelf's co-founder and former CEO Drew Fairchild, who spearheaded a plantation of what is now more than 600,000 agave plants between Airlie Beach and Bowen in Queensland's Whitsundays region - an area that sits around 20 degrees from the equator similarly to Mexico's leading agave-growing state Jalisco.
In the last financial year the group recorded net cash outflows of $7 million on its agave business, and $4 million in the year before that.
Upon the release of Top Shelf's FY24 first-quarter results in October, which included a 26 per cent lift in revenue to $32 million and a less pronounced EBITDA loss of $3.1 million, the company expected a market launch for Act of Treason in early December following a 'capital intensive' build phase for the project.
A few days later at the annual general meeting (AGM), chairman Julian Davidson described the launch as imminent, and also hailed Fairchild's efforts.
"TSI would not exist if not for Drew’s vision and ambition to create a modern Australian spirits company," Davidson said.
"Drew co-founded TSI in 2014 and led the company through a period of significant change and growth, including the construction of its distillery and production facility, establishment of an Australian agave spirit farm, listing the company on the ASX, navigating the challenges of the global pandemic, and most importantly, the creation, launch and growth of the first two brands in our Australian premium spirits portfolio."
The launch may have come a month late, but Top Shelf's Agave tequilana plants and distillery have now produced the group's inaugural First Harvest Blanco of the Act of Treason Australian Agave Spirit.
"Act of Treason symbolises the pioneering spirit of a project that will create a new region of agave spirit. The dry tropics of north Queensland are the ideal place for that to occur," says Top Shelf International CEO Trent Fraser, who joined the group in 2021 specifically to lead the Australian agave project and international expansion.
Fraser, originally from South Australia and starting out his career with Penfolds and Treasury Wine Estates (ASX: TWE), in 2008 moved to New York where he held executive roles at Moët Hennessy Louis Vuitton (LVMH) as vice president of Dom Perignon, and president and CEO of Volcan de mi Tierra tequila.
Having built Volcan from the ground up over a six-year period, guiding the strategy, branding, route-to-market and overall sales and marketing initiatives, it was a bold move to return to Australia to work on such an ambitious project as what would become Act of Treason.
In April last year Fraser then became CEO, with the outgoing leader Fairchild emphasising he had always known there would come a time when new leadership would be required to take Top Shelf to its next phase.
"I am more passionate and confident now about the opportunity as I was in 2014 when we sat around a table at the Emerald Hotel in South Melbourne and decided to embark on this challenge to create accessible premium spirit brands that all Australian can enjoy," the co-founder said at the time.
"As I said when Trent first joined TSI, we could not have found a more well-credentialled, internationally-recognised Australian in the spirits world to help the company realise its ambition to become Australia’s first globally relevant multi-branded spirits company."
Today, Fraser says Act of Treason has joined the new global era of agave.
"We’re approaching this as an opportunity to create something new and expand the horizons of a category that has been geographically limited for centuries. In many ways it’s no different to the evolution wine underwent three decades ago," he says.
"Like many others producers, we feel there is an opportunity for agave to be shared with the world and for others to put their distinctive imprint on a category that continues to surge in popularity in Australia and overseas."
The company emphasises that investment has been made in craftmanship and not in creating a celebrity-driven, mass-produced brand that is more obsessed with itself than the quality of spirit it represents.
Top Shelf claims the practices at the farm are industry-leading and producing plant growth and sugar levels ahead of schedule, while the distillery has been designed and built solely to create the best expression of Australian agave spirit possible.
The Eden Lassie spirit farm and distillery is powered by renewable energy as a true farm-to-bottle operation with plants grown, cooked, distilled and bottled from 100 per cent Agave tequilana. Biodiesel is one element of the company's sustainability commitment that also includes carbon sequestration, cover cropping, sediment run off prevention, water management and ag-tech.
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