27 Nov De-coding the Cork Code
The authoritative publication Drinks and Destinations recently published this authoritative interview with Carlos de Jesus, head of Marketing and Communications at Corticeira Amorim. Written by Rojita Tiwara, there are some profound insights.
The closure industry has gone through and is still going through many evolutions at the moment. What are the latest natural cork trends that you are seeing worldwide?
We are witnessing two very strong trends worldwide. First is premiumisation that is happening across the board in wine & spirits industry. As packaging is an integral part of the process, cork closures industry is seeing a boost too. Second is sustainability.
A premium proposition also has to have a sustainable proposition. Luxury and premium category is becoming more and more intertwined with sustainability. It is a positive conversion of two trends where cork on its own has strong credentials associated with premium products. And when you bring the two together it becomes a strong and beautiful proposition for the world of wine.
When you talk about sustainability does that also include Cork re-harvesting or recycling?
In the US and some other wine markets, cork recycling has become a regular practice. But it is upcycling, which is more effective. That’s what we at Amorim focus on. We use the discarded/used corks to create other utility commodities and that’s how we are trying to increase the usability in other forms.
The popular belief is that only premium quality wines need cork closures. Any comment?
No. That is far from being proven or prove-able. I think if the natural cork has been proven as the best closure for a premium wine why will it not be good enough for your regular value-for-money wine? I find it bizarre that we are in the year 2017 and still debating on this subject.
Cork works as the appropriate closure not just because it is premium but also because it balances the oxygen ingress, which helps in the development of wine in the bottle. A good quality wine needs to have a cork closure. It is a fact. A very interesting piece of research information came out of the Oxford University recently. It’s an experiment designed by Prof. Charles Spence, an experimental psychologist at the University. His research established that consumers having the chance of comparing the opening and the drinking of wines sealed with a cork and the ones sealed with screw caps on an average rated the cork-sealed wines as having 15% better quality and 20% more appropriate for a celebration and 16% inciting of a celebratory mood.
This is a piece of information that every winery must take into account. This report matches very well with the worldwide data, which confirms cork’s overwhelming preference over other closures across markets.
For example, in China over 90% of the wine consumers believe that natural cork is beneficial for wine quality. In US where 72% of the top 100 premium brands are sealed with natural cork US consumers are willing to pay a premium of $3.87 more for a bottle sealed in cork. Even the ‘Top 100 Wines of The World’ list published by The Wine Spectator has 89% wines, which are sealed with a cork.
What is your comment on a market like Australia where some of the premium wines are sealed in screw caps?
I would like to refer to what people in Australia themselves are saying, people like Peter Gago, Chief Winemaker of Penfolds refuses to put anything else other than cork as a closure in their top range wines. There are many such examples in Australia. It doesn’t matter what we say but it is the truth that cork is making a tremendous comeback in Australia. We have seen double-digit growth in our sales there. Australia is an export-driven market. After a few bad years, Australia is now trying to regain its export markets. China has become the largest export market for the Australian wines and this is a radical shift from the UK being the largest export market a few years ago. So the world has changed and so has the debate of closures.
It’s growing but we also want to see the production and consumption of wine and spirits in India growing faster. We all have a responsibility in making sure that those developments happen sooner rather than later. India will always be a very specific market. Countries like US or China or other export-driven markets develop a lot quicker and lot faster but I see no insurmountable reason why this cannot be possible in the vast majority of India if not the entire country. We would like to partner with the local Indian producers whenever possible so that the development gets faster.
What is the percentage of Amorim’s investment in the R & D segment?
As Amorim is a knowledge-based firm our pure R & D investment is about 7.5 million euros per year. But besides that, we also need to take into account capital expenditures that go in improving, training and catering to a lot of other layers in the production process of natural cork stoppers. Cork production requires sophisticated quality control and the process is very scientific and technical.
Do cork closures on spirit bottles have any significant impact or contribution to the quality of the liquid inside the bottle?
Cork closures on spirits bottles are perfect to protect the liquid in the bottle. The fundamental difference is that when a spirit goes into a bottle that liquid is at its peak and it is as good as it is going to be. Wine, on the other hand, is just starting to evolve in the bottle. Issues like oxygen ingress or phenolic transplant that are very important when you are interacting with a very intricate chemical reaction process called wine, the complexity of that interaction when it comes to spirit isn’t that deep. What is even more important in case of spirits than in case of wine is the ability to deliver the right looks and premium aspect and packaging for the liquid. Which is one of the most important requirements when you are selling a spirit. Cork brings that ability for a bottle of very expensive spirit to look the part. There nothing that can or in fact nothing does replace cork for spirits.
What are the global issues that the cork industry is facing currently?
We know that “we can never rest on our laurels”. Past performances don’t guarantee the future success. So, we know that we will never go back to the good old days of having a market share of 95-96% in the cork industry. Those days are gone. And it is a positive thing. It is much better to have 70% share of a market that is much bigger than having 95% of a smaller market. The main challenge is that we have to recuperate about 1.8 billion bottles that are still in plastic stoppers. Secondly, TCA proof NDTech by Amorim is the break through technology. But we are not yet at zero defect proof but even though we know that there’s no such thing as zero defect, we have to keep trying for perfection.Our volume growth shouldn’t diminish the value proposition that cork enjoys. If you look at the figures released by the Cork Quality Council every year, it shows that the amount of TCA problems in corks has recorded an enormous decline.
Our volume growth shouldn’t diminish the value proposition that cork enjoys. If you look at the figures released by the Cork Quality Council every year, it shows that the amount of TCA problems in corks has recorded an enormous decline.
How is the health of a cork forest relevant to the quality of cork production?
It is very important. And, chlorine related environmental pollution is a problem for not just for humans but also for the cork forests. And, TCA is not exclusive to only cork, it can be found in coffee, in beer, in fruit, tap water so it is an omnipresent compound. When you look at the cork forest, you look at it from different points of view. One of the points of view is from the analysis of a critical path for the formation of TCA. And a lot of TCA can certainly be formed in the forest. But it can also be formed during the production process of the stoppers or during the handling of the bottles in the plant. So part of the practice is to visit every step in this process to identify the cause of the problem and handle them appropriately. Amorim as a company is not owners of the cork forests. We get our supply of raw material needs from 1000 cork producers. What we can do is to tell them to maintain better quality and follow healthy maintenance of the cork forest and the raw materials.
But unfortunately, not many cork manufacturers talk about this aspect of the cork production.
In Portugal, where the cork oak occupies 23% of the national forest area, important initiatives in reforestation have been developed at a rate of ten thousand hectares per year, or an annual growth of around 4%.
Can climate change affect the cork manufactures?
Climate change is getting more and more difficult to ignore. Anyone working with the land will tell you that change is on its way. We have seen those changes in the cork forests. But remember that the Cork trees have been around for an estimated 65 million years and that’s a long time. They have seen a lot including the appearance of the Sahara desert. So if there’s a species that can adapt to any change it’s the cork forest. But they also have weak spots and certainly, the changing patterns would be something we will be keeping an eye on. But on the other hand, this is the tree that gives a lot without asking for much. And I believe that threat not necessarily it has to come from one side. When you look at from the other side of the business, if 70% of our value business is the closures business, if the impact of climate change is imminent for our clients such as wineries, then that would be something we need to watch out for.
Fortunately, we know that each cork stopper retains up to 112 grams of CO2 so cork can be a passive ally of the wineries in reducing their carbon footprint.