In a significant development for Aussie branded spirits company Top Shelf (ASX: TSI), Coles Liquor Group (CLG) has confirmed nationwide ranging for Top Shelf’s NED Australian Whisky and Grainshaker Australian Vodka.
Commencing in July 2023, three NED products, including the 1-litre, 200mL, and the new super premium Green Sash Reserve Australian Whisky 700mL, will be available across CLG banners, namely Liquorland, First Choice Liquor Market, and Vintage Cellars. Additionally, two new flavoured variants of Grainshaker Vodka will be stocked in First Choice Liquor Market stores starting in August. This successful outcome stems from CLG’s annual supplier review and builds upon the fruitful 12-month collaboration between Top Shelf International (TSI) and the major retailer.
Top Shelf CEO, Trent Fraser, said, “Confirmation of this expanded ranging is another important building block in the strategic growth of the TSI spirits portfolio and forms part of the premiumisation strategy for both brands. It’s also affirmation of the performance of NED and Grainshaker in their first year across an expanded retail market and the strength of the relationship we have developed with the CLG team during this time.”
Fraser assumed the role of CEO in April 2023, succeeding Drew Fairchild, who recently resigned. Fairchild was not the only one to step down from his position, as Non-Executive Director Michael East also tendered his resignation.
Top Shelf International, a Melbourne-based distiller and marketer of premium Australian spirits, boasts distinctive brands such as NED Australian Whisky and Grainshaker Hand Made Australian Vodka. The company is currently embarking on the creation of Australia’s first agave spirit range, leveraging its magnificent Agave farm in the Whitsundays region of Queensland.
However, Top Shelf has faced some financial challenges in recent quarters. Between Q2 FY23 and Q3 FY23, the Company experienced a decline in revenue from $9 million to $6.4 million. Furthermore, over the past nine months, it incurred an EBITDA loss of $16.6 million. As of March 31, 2023, the Company had available funding of $22.3 million, comprising $12.3 million in cash reserves and an untapped balance of $10 million from its debt facility. During the same period, the company’s $45 million debt facility was drawn to $35 million.
To address these financial challenges, Top Shelf has implemented cost-saving measures. Notably, the Company has realised labour savings of $2 million by reassigning or reprioritising existing roles across all business functions. Additionally, non-labour expenditure savings of $5 million have been achieved through rightsized investment spend, business activity changes, supplier tender processes, and the elimination of discretionary expenses.
The expansion of Top Shelf’s product range with three additional facings on shelves not only supports the NED 700ml glass SKU but also forms part of an 18-month strategy to enhance and elevate the TSI portfolio. This development represents a threefold increase in the NED glass SKU range within CLG.
Coles Liquor Business Category Manager Spirits and RTD, Sophie Went, commented, “We’re excited to provide our customers with more choice when it comes to locally sourced drinks and we look forward to building on the momentum of these fantastic new Australian spirit brands. Both have proven themselves to be driving incremental sales in their respective categories.”
On May 26, the Company requested a voluntary suspension from the ASX, building on its prior request on May 24, 2023 pending an announcement to be released regarding a capital raising.
Alinda is a Business Reporter for The Sentiment
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