Shares in Corticeira Amorim, the world’s largest cork producer, didn’t look like a great bet even a decade ago.
Screw tops and plastic stoppers were the cheaper products that were being flirted with by its biggest customer, the wine industry, which threatened cork’s dominance. Blaming it for occasionally tainting wines with a moldy taste, many premium wine-makers had spurned cork.
But the present scenario has changes as the cork industry has since staged a comeback. Cork exports from Portugal, the world’s dominant producer, have just regained their peaks of 15 years ago and Lisbon-listed Amorim’s share price has soared almost six-fold.
“When you go back 12, 15 years, the forecast for cork was anything but optimistic. Where we are today is a completely different territory from what most people thought possible then,” said Carlos de Jesus, Amorim marketing director.
According to the U.S.-based Cork Quality Council, surging to account for almost half of the U.S. market, the world’s largest consumer of wine, in 2009 was the sales of plastic stoppers shaped like a cork and aluminum screw caps, made by firms such as Australia’s Amcor.
Screw tops are now used to seal most bottles produced in South Africa and Chile too and it had earlier taken over the Australian market.
Partly by persuading some wine-makers to ditch aluminum and plastic and partly by investing in research to eliminate cork taint – a dank, moldy smell sometimes caused by microscopic fungi found in cork-tree bark, cork has rallied.
Cork’s share of the global market, which Amorim estimates is worth about $1.3 billion a year, stands closer to 70 percent and it has raised its U.S. market share to around 60 percent.
But the battle for market share has only just begun.
As its middle class of more than 100 million people develops a taste for wine, China is emerging as a huge new market. And for now cork seems to be winning the battle with its rivals engaged in in wining the hearts and minds of China’s wine lovers.
“It is a tradition. It represents prestige,” said Matthew Gong, Shanghai-based spokesman for major Chinese wine importer ASC Fine Wines.
However, as the market grew, especially younger people drinking cheaper wines, Chinese consumers would become less sensitive to the question of cork or screw cap, he added.
“More and more consumers don’t mind as much whether the closure is a cork or a screw cap,” he said. “But for top wines, clearly cork is preferred.”
According to cork makers’ association APCOR, cork exports to China jumped 22 percent in 2016. Potential power to influence how producers seal their bottles in that predominantly screw-top market, also exists with China as it is the biggest buyer of Australian wines.
The assumption that cork makers were making inroads was denied by the Winemakers’ Federation of Australia. “It’s definitely not a move in Australia or New Zealand. We are still very much screwcap for its convenience,” said Chief Executive Tony Battaglene.
Screw top is used to seal about 90 percent of bottles produced in Australia, he said.
A battery of chromatographic analysis machines which can detect the almost invisible signature of taint, robots, and lasers have bene bought by Amorim in the war with screw tops and plastic.
(Adapted from Reuters)