The Perfect Storm for Cork Arrives

Posted by Tom Wark on Apr 15, 2005

Imagine planting a crop and knowing it will be 40 years before you can harvest its bounty. You’d have to put it in the ground while attending pre-school in order to see a return during your most productive years. It’s just this situation that has led the Portuguese to become fond of the saying, “Plant cork if you love your grandchildren.”

Talk about patience. It does take a cork tree in Portugal about 40 years before it is ready to offer its bark for use. This is pretty precarious stuff. Imagine if a natural disaster comes along and wipes out 10 years of future productivity. What does the cork farmer tell his kids? “Sorry, there’s going to be a decade or so in there where you’ll just have to become a plumber or cable installer.”

For reasons of weather, as well as a general lack of patience among most of the world’s people, cork is grown in very few places. Portugal happens to be the worlds largest cork producer. Eighty-two percent of the world’s cork trees grow in Portugal. Half the world’s supply comes from this ancient country that sits on the tip of Europe, both culturally and physically. The economy of Portugal benefits from $1 Billion of cork exports per year.

Unfortunately for Portugal, there could be brewing a “Perfect Storm” of destruction heading the cork industry’s way.

Currently, Portugal is in one the worst drought’s it has suffered in 300 years. Read this:
3-0-0  y-e-a-r-s. Look at this before and after picture:

Farmers are appealing to the EU for help and subsidizing. Crops are less than half their normal size in places. Reservoirs are at 32% of normal. $1.3 to $2 Billion in crop revenues have disappeared. Prices of fruits and vegetables have skyrocketed. The hydraulic energy industry is in shambles. Oil prices have risen to account for higher use to produce energy in making up for the loss of hydraulics. And, there’s no let up in sight.

Cork forests are being humbled by the dry weather. Already fires have ravaged cork forests and the fire season has not yet begun.
Add to this the international movement toward using synthetic closures. From synthetic corks to screw caps to boxes, the number of alternatives to cork has never been greater. And the rate at which wineries are switching to alternatives makes it seem like there is an international conspiracy to screw Portugal and it’s economy.

Every week it seems you read about another winery switching over to screwcaps. Some are low budget wines. Others switching are true super premium wines costing over $20 a bottle. Then you have countries like New Zealand that makes it a point of pride to use screwcaps. And why wouldn’t’t you.

There is no good technical reason to not use screwcaps. The only real reason to stay with cork is to assuage the tender egos of the customer. And we are working at a pretty quick clip to help the customer over that little deficit of understanding too. To this point, Portugal has lost about 8% of its market share to alternative closures. It’s going to keep growing too.

So while you have the world of wine happily moving away from Portugal’s vital national interest, you have Mother Nature moving in over Portugal like a Berserker with a toothache. Now here is the ugly part. As Portugal continues to lose market share either ether via crop damage or technological development, you get a fairly logical result: Fewer Portuguese want to farm cork forests, further limiting the future viability of one of the country’s most important economic sectors.

My advice is start collecting corks. Twenty years from now they will be a rare commodity. Sure, some wineries will still use them. But how many? I can imagine being in my final years in the wine PR business and writing a background sheet on a Napa Valley Cabernet. Shooting for an image that pushes tradition, I’ll describe this wine thusly, “…and this luscious Napa Cabernet is closed with authentic 2 inch Portuguese cork, because we spare no expense to bring you an authentic wine."