Team spirit: the Australian agave farm aiming to quench a global thirst for tequila

The plants may look like pineapples but these fields in north Queensland are growing piña of another kind – Agave tequilana.

Outside Bowen in the Whitsunday region, Australia’s first commercial-sized agave farm has just broken ground for the construction of its own distillery and bottling plant.

The owner of the 380-hectare Eden Lassie, Top Shelf International, is an Australian spirits company keen to leverage the country’s growing interest in premium tequila, a market that’s outperforming other alcoholic drinks categories as we swap shots for sips, espresso martinis for margaritas.

According to Jeremy Blackmore, the co-owner of Sydney micro-bar Cantina OK! – one of only two Australian bars to appear on the World’s 50 Best Bars list in 2022 and recipient of Australian Bartender Magazine’s best tequila bar award this year – the culture of the “tequila slammer” is fast disappearing.

“We sell a lot of margaritas, including spiced margaritas,” he says, “and, as people are becoming educated about tequila and more interested in agave spirits, we’re selling more of it straight up, designed for sipping.”

A bottle of premium tequila can cost anywhere from a hundred to thousands of dollars.

Distilled from fermented juice from the heart – or piña – of the agave plant, agave spirits include mezcal as well as the lesser-known raicilla and bacanora, but according to ISWR, a company that analyses alcohol trends worldwide, it is tequila that is driving the premium agave spirits boom, with a market increase of 16% between the first half of 2022 and the same period in 2021.

Australia is now the third-largest market for tequila outside North and Latin America.

Related: It’s about savouring, not shots: the Mexican guide to drinking tequila

In Bowen, TSI now has 500,000 blue agave plants on its farm but plans to double that by 2024.

Agave are generally harvested at between five and eight years, with the piña cooked to caramelise the sugars before their juice is fermented and double-distilled – usually in a combination of stainless steel and copper pot stills. The spirit is then rested in tanks before either bottling or further maturation in oak.

As “tequila”, like “champagne”, is a protected denomination, if it’s made anywhere outside the state of Jalisco in Mexico it must be classified as “agave spirit”.

According to the Australian beverage wholesaler Kaddy, which supplies venues and retailers, agave spirit sales are now on par with gin. “The agave segment on Kaddy has experienced tremendous growth, with sales increasing 400% over the last 12 months,” says a Kaddy co-founder, Rich Coombs.

Eden Lassie is the largest single-estate agave farm outside Mexico and with plans for a distillery and bottling plant – to be powered by renewable energy – TSI says it will be one of the biggest farm-to-bottle producers in the world.

The company’s brands includes NED Australian Whisky and Grainshaker Australian Vodka. The drink bottled at Bowen, “Act of Treason”, will be its first agave spirit.

“In the US tequila revenue was $10.7bn in 2021 and has risen to $13.3bn in 2022 so the opportunity is immense,” says TSI’s chief executive, Drew Fairchild. “The Australian spirits industry is on the cusp of a boom similar to the one enjoyed by the wine industry in the 1980s. We see trends towards premiumisation and also less is more.

“We think with greater health consciousness prevalent among younger consumers, agave in particular is well placed to take advantage of this trend. They understand the connection between the drink and the plant. This has been a key factor in the growth of tequila in the US.”

It’s a propitious time to be entering the market, with what IWSR has flagged as an “unprecedented” demand for tequila leading to agave shortages and higher production costs in Mexico.

TSI’s distiller, Sebastian Reaburn, says that far from resenting the competition, the Mexicans have been supportive.

“A lot of the people within the industry in Mexico look at what we are doing as like what happened to champagne through the 1970s when Australia started to manufacture sparkling wine,” he says. “It was good for champagne.”

Related: Tequila time: why Mexico’s signature spirit is having a moment

Only about 8% of spirits sold in Australia are made here, compared with beer at 80% and wine at 75%, according to TSI, but demand for premium, high-quality Australian spirits is forecast to increase over the next five years.

Coombs is witnessing the interest. “We’re seeing firsthand the growth in local Australian spirits and their impact on market shares of multinational brands, particularly at the more premium end of the market,” he says.

“We expect agave spirits will follow a similar path, particularly with the strong levels of innovation we see in local distilling, leveraging world-class techniques matched with local ingredients.”

TSI’s agave is on track to be harvested in July, with Act of Treason slated to hit the market in September or October. The first release will be a couple of thousand cases, which TSI says will increase over time to more than 100,000. In addition to the domestic market, TSI also plans to export to the US.

And, while the agave spirit may be made according to Mexican tradition, it will, Reaburn says, be uniquely Queensland in its expression of terroir.