Australia Takes on Mexico’s Tipple (Just Don’t Call It Tequila)
Top Shelf hopes to create drinks with a uniquely Australian flavor, influenced by the characteristics of the country’s soil. Drinkers can expect notes of honey, lime peel and cut grass, the company says.
China is another potential market down the track. Australia became the top wine exporter to the world’s second-largest economy in 2019, selling A$1.2 billion of product there that year. Prohibitive tariffs effectively shut down the trade last November.
The wine industry “turned the domestic market to an international export market,” Fairchild says. “There’s no reason why we can’t do the same.”
He says Top Shelf is starting to field inquiries about its whiskeys from Chinese distributors who are seeking out new products now that wine is off the table.
“We’re lucky that we’ve got scale,” he said, “to start to be able to tap into that market. It’ll be interesting to see how it unfolds.”
While Australia does have other agave plantations in Queensland and Western Australia, Top Shelf’s farm is by far the biggest, and its focus on producing spirits rather than biofuel is unusual.
But while Australian agave is a rarity, novelty value may not be enough to win over U.S. drinkers, the biggest consumers of tequila. With the micro-distiller market fairly saturated — Kendall Jenner launched her own tequila in February and even George Clooney owned a brand — taking market share from the giants like Bacardi Ltd.’s Patron and Diageo Plc’s Don Julio will be a challenge.
Aged Then Filtered, a New Kind of Tequila Is Going for Premium
Mexican tequila will be hard to displace in consumers’ eyes, according to Alex Gilmour, manager of world-ranking tequila bar Cantina OK! in Sydney, who regularly visits the country to buy spirits from local producers.
“I think it’ll be hard” to compete, he said. “These producers have been doing it in their method for generations.”
Still, the agave boom isn’t showing any signs of slowing just yet. That’s especially true at the higher end of the market, according to researcher IWSR. Agave spirit sales are set to grow 4.2% annually in the five years through 2024 across 19 key markets, with premium sales expected to rise 8.8%, hitting nearly $9 billion in value.
Potential in the Asia Pacific region looks promising too, with annual growth across China, India, Japan, Thailand and Australia collectively projected at 8%. Hong Kong’s Coa — anointed Asia’s best bar on Thursday — features a 41-page menu of agave drinks.
