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LISBON (Reuters) - A decade ago, shares in the world's largest cork producer, Corticeira Amorim, didn't look like a great bet.
Its biggest customer, the wine industry, was flirting with cheaper products that threatened cork's dominance: screw tops and plastic stoppers. Many premium wine-makers had spurned cork, blaming it for occasionally tainting wines with a mouldy taste.
That was then. The cork industry has since staged a comeback: Lisbon-listed Amorim's share price has soared almost six-fold and cork exports from Portugal, the world's dominant producer, have just regained their peaks of 15 years ago.
"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.
Sales of plastic stoppers shaped like a cork and aluminium screw caps, made by firms such as Australia's Amcor, surged to account for almost half of the U.S. market, the world's largest consumer of wine, in 2009, according to the U.S.-based Cork Quality Council.
Screw tops took over the Australian market, and are now used to seal most bottles produced in South Africa and Chile too.
However, cork has rallied, partly by investing in research to eliminate cork taint - a dank, mouldy smell sometimes caused by microscopic fungi found in cork-tree bark - and persuading some wine-makers to ditch aluminium and plastic.
Cork has raised its U.S. market share to around 60 percent, and its share of the global market, which Amorim estimates is worth about $1.3 billion a year, stands closer to 70 percent.
But the battle for market share has only just begun.
China is emerging as a huge new market as its middle class of more than 100 million people develops a taste for wine. Cork and its rivals are engaged in a battle for the hearts and minds of China's wine lovers - and for now cork seems to be winning.
"It is a tradition. It represents prestige," said Matthew Gong, Shanghai-based spokesman for major Chinese wine importer ASC Fine Wines.
However, he added, Chinese consumers would become less sensitive to the question of cork or screw cap as the market grew, especially younger people drinking cheaper wines.
"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."
Cork exports to China jumped 22 percent in 2016, according to cork makers' association APCOR. As the biggest buyer of Australian wines, China also has the potential power to influence how producers seal their bottles in that predominantly screw-top market.
Amcor did not respond to a Reuters request for comment. However, The Winemakers' Federation of Australia denied cork makers were making inroads. "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.
He said about 90 percent of bottles produced in Australia are sealed via screw top.
In the war with screw tops and plastic, Amorim has recruited robots, lasers and a battery of chromatographic analysis machines which can detect the almost invisible signature of taint - the chemical compound TCA - in a few parts per trillion, or equivalent to one drop in enough water to fill 20 Olympic swimming pools.
Bark is carefully stripped from cork oak trees in Portugal's central-south Alentejo region. Then at Amorim factories near the northern city of Porto, equipment processes it into slabs that are steam-treated, cut into smaller pieces and fed by robotic arms into machines that punch out stoppers. These are sorted and polished using lasers.
The finest-quality stoppers are still punched by hand before passing through the humming rows of chromatographic analysers.
Amorim's NDTech process is among the technologies that sprang from more than 700 million euros ($766 million) invested by the Portuguese industry in new equipment and research, and other companies hope to catch up soon.
The industry has also launched cheaper TCA-free stoppers made from shredded cork for lower-end wine makers. They are made by Amorim and others such as French-Portuguese Lafitte Group.
The R&D drive was a response to the industry's cork taint crisis, which peaked in the early 2000s when even European makers of premium wines began joining the switch to screw caps.
In 2005, Laroche Wines, owned by AdVini, sealed all of its Chablis, including high-end Grands crus, with screw caps. But 10 years later, the French winery, which has annual sales of 25 million euros, has switched back. It uses cork for all its Grand cru, Premier cru and most selection wines. At the end of last year, it started sealing its top wines with NDTech.
"After the big cork pollution crisis, the cork industry was on the defensive. The incredible work they did changed things... The cork quality increased drastically in the last 10 years," said Gregory Viennois, technical director at Laroche. Joao Rui Ferreira, head of APCOR and CEO of cork stoppers maker WFScork, said cork was not aiming to return to its total domination of the late 20th century, when it held 95 percent of the global market. Instead, it was focusing on premium wines in what is now a much larger overall market.
"The trends are very clear. Wine consumption in the world is moving from volume to value...," Ferreira said.
Influential wine critics are still not convinced. For them, taint remains a serious problem for cork.
APCOR estimates that up to 1.2 percent of wine bottles are still ruined by TCA, but some producers and critics cite anecdotal evidence that the actual proportion is much higher.
Lisa Perotti-Brown, a reviewer for the Robert Parker Wine Advocate website, wrote in April that during a recent tasting of more than 900 wines from California's Sonoma County she had to discard up to 8 percent of the samples because they were corked. She warned that even at levels below the detection threshold hawked by Amorim, TCA can still damage the wine, muting or otherwise dulling the aromas and flavours.
($1 = 0.9141 euros)
Additional reporting by Adam Jourdan in SHANGHAI and Benjamin Weir in SYDNEY; Editing by Mark Bendeich and David Stamp