Alternative closures were all the rage in the 1990s and that has been a real challenge for the cork industry, which saw its dominance of the sector diminish considerably thanks to competitive closures such as screwcaps, glass closures, synthetic corks and cork composites. However, that trend seems to be turning around and the cork industry is feeling almost giddy.
No one could be more pleased than Antonio Amorium, President and CEO of Corticeira Amorim. The 43-year-old manager heads his family’s company, which is the world leader in cork production and has been for the past 150 years. The firm has a 70% market share and sales of 450 million euro in 103 countries. Still, they don’t rest on their laurels and Amorim spends five million euro a year on research and development. Alone, the firm accounts for 3% of Portugal’s export sales.
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“We took the competition very seriously and have heavily invested in R&D to find new technologies and new techniques. We have been able to regain our position vis-a-vis plastics because they have revealed themselves to be unreliable. They are fragile, prone to oxidation and hard to pull out of the bottle,” said Antonio Amorim, President and CEO of Corticeira Amorim.
The company saw its 2010 profits, especially in the cork stoppers business unit, rise 13% to 42 million euro in consolidated sales. The cork stoppers accounted for around 30 million euro of that amount. Spain, France and Italy also showed increases of between 10%-23% while new world countries such as Chile, Australia and the US recorded an increase of 13%-20% in cork sales.
“The first signs of the crisis were in 2008-2009, but we took the necessary steps to be in a good position. In fact, we had our best performance in 2010. I am still cautious but with more optimism,” Amorim added.
Annual cork production is 300,000 tons and takes place in the Mediterranean basin. Some 52.5% of the total is grown in Portugal while another 29.5% grows in Spain and 5.5% in Italy. The rest grows in Algeria (5.2%), Morocco (3.7%), Tunisia (2.5%) and France (1.1%).
Italy is the third most important producer of cork in the world. Of the 2.2 million hectares of cork forests, some 225,000 of them are in Italy, 90% of which are in Sardegna and the other 10% in Sicily, Calabria, Lazio, Tuscany and Campagna. This amount equals one and a half million corks. In fact, the wine industry is without a doubt the largest client of the cork industry and uses 70% of Italy’s total cork production.
While some countries have completely adapted to alternative closures such as Austria and Australia, even on premium wines, the more traditional markets such as Italy, France, Portugal and even to some extent, the United States, still feel that for a prestigious bottle of wine, you must have a cork. The other closures are just not considered to be of the same level. Wines that have cork stoppers are also priced higher. In fact, the use of screw caps is declining because the wines are often considered of lower quality.
In addition to the prestigious view of corks over other types of closures, this is not the only reason that cork has come back into fashion. One of the most important reasons is that many people are now looking at the environmental aspects of using cork and the place of cork trees in the world’s ecosystem. Cork is a 100% biodigradeable and recycleable product. It also helps to contain CO2. Every year, cork forests absorb some 10 million tons of CO2. Additionally, cork forests are often home to a wide variety animals.
Amorim is not the only happy member of the cork industry. The Portuguese Cork Association, APCOR, the cork consortium which has been active for more than 55 years, is also pleased that the market has begun to take a second look at cork closures. APCOR represents producers of 80% of the world’s cork industry.
In any event, before a new cork forest is mature, 20-25 years must go by. Cork trees can live to be 150 years old, but they can only be harvested every nine years. As if that weren’t enough to make cork a prestigious item, in order to be a good quality cork, around 27 years must go by since the first two cork harvests, nine years apart aren’t considered up to snuff. The third harvest yields corks that are considered to be of the right quality to be used with any prestigious wine. The cork industry is therefore one that calls for patience, longevity in terms of your outlook and time. No wonder there is so much concentration.