The defining moment of my recent visit to Portugal to assess the status of the cork industry was a graph depicting the total closures market for the last 10 years. Cork remains the market leader by far and furthermore it has been regaining market share since 2010 after being in decline from 2004 to 2009. Whereas the switch from “old” to “new” technology when it comes to sectors such as photography and music has been emphatic, it would appear that cork is going to be around a while longer.
Antonio Amorim, president and CEO of Amorim, the world’s largest cork company explains how the market breaks down: there are 28 billion litres of wine produced annually, half of which is not relevant as it doesn’t end up in a bottle. Of the approximately 18 billion bottles of wine produced annually, 12 billion end up under cork, four billion under screw cap and two billion under plastic.
A major problem for the cork industry is that it is hugely fragmented. There are currently 267 members of the Portuguese Cork Association and not all are “equally committed” to quality control to quote Carlos de Jesus, Amorim’s director of marketing and communication.
Amorim sold 4 billion corks in 2013, equivalent to a 32% market share and it is estimated that the nine next biggest producers would have a further 30% market share, which means a myriad of smaller producers fighting over the remaining 40% or so of the market. In this regard, it is curious to me that winemakers feel that they must use multiple cork suppliers in order to “spread their risk” when they could being dealing with the market leader who is ready and willing to be held to account.
How to get the “cowboys” out of the industry remains a perennial headache for Amorim – a code of good practice that producers are supposed to abide by is not as tight as it would like while the Portuguese government is keen to check its power lest it further dominate the market.
According to Joaquim Sá, managing director of Amorim Cork SA, cork has a total market share of 40% and screwcap 60% locally but this changes for reds retailing for over R60 a bottle – 60% bottled under cork. “No single closure works for every wine on the market,” says Sá.
As for the incidence of TCA, Amorim reckon they’ve got this down to approximately 1%. “We can’t deliver perfection but we can put solid risk management policies in place – just like any other industry,” says De Jesus. Amorim spends €6 million a year on R&D relative to €324 million in revenue from wine stoppers and the next innovation in the pipeline are Individual Detection Machines using state-of-the-art gas chromatography technology – 10 million corks each tested as 100% TCA free by March 2015, these destined for the very top end of the market.
When it is suggested that based on experience in the field, the incidence of TCA remains at around 5%, then the stock response from Amorim is to blame other sources, whether these be tainted barrels or even municipal water. Is Amorim being disingenuous here? I think it has to be acknowledged that at least some wines sent back in a competition environment have faults which are not cork related but the result of sloppy winemaking, cork nevertheless ending up the convenient scapegoat.
In terms of making sense of the closure debate, there also a significant political element which tends to get overlooked – it is often argued that Australia and New Zealand’s eagerness to adopt screwcap is proof of how progressive their respective wine industries are but bear in mind Australia is the world’s sixth biggest aluminium producer – it would be naïve to think that the mining companies involved aren’t lobbying the wine industries of the region to choose screwcap over cork, just as Amorim aren’t wining and dining SA wine journalists in Portugal out of the goodness of their hearts.
If you believe in capitalism, then a gain in market share ultimately comes down to the fact that there’s a lot going for cork. Perhaps the most fascinating part of the visit was time with Miguel Cabral, Amorim’s research and development who makes the case that cork is not simply a benign closure (when TCA free) but actually has a positive impact on how wine develops. He quotes research that wine under natural cork develops most favourably relative to screwcap, conglomerate cork and plastic. Of particular interest, it seems that 1) natural cork releases oxygen into the wine from its own cells rather than from outside and 2) wines under screwcap can show increasing levels of reduction post-bottling.
What Cabral now hopes to demonstrate is that cork releases phenolic compounds into wine which have a beneficial effect on the ultimate drinking experience. If he can produce compelling evidence in this regard, then cork might have a meaningful competitive advantage over other closures.
Ultimately, there is no simple answer as to what wine closure should prevail. In pure performance terms, TCA remains cork’s fundamental drawback but we shouldn’t gloss over the problems of reduction associated with screwcap. Then there are social and environmental issues to do with cork farming which might not be of direct concern to the wine enthusiast at the moment of consumption but are hardly irrelevant – I, for one, would prefer not to see two million hectares of cork forest done away with in favour of more aluminium mines.
The debate will no doubt continue because it’s something wine geeks like to get worked up about but really isn’t it time we moved on? The failure rate is way down and while you could argue that it will only be acceptable when it is nil as is the case with brake pads and parachutes, the truth is that unlike brake pads and parachutes, no lives are at stake. Instead, we once again bombard the consumer with scientific jargon and then are disappointed when they stick to beer.