INTERVIEW WITH CORTICEIRA AMORIM CHAIRMAN ANTONIO AMORIM  

As he launched a new cycle of innovation within the world's leading cork supplier, the chairman of Corticeira Amorim, Antonio Amorim, was upbeat about the future for Amorim and for cork.

In this interview for Bark to Bottle, Mr Amorim spoke about the challenges ahead and his vision for the company in the next three to five years.

He identified three main challenges: maintaining the momentum of innovation and performance improvement within the company, encouraging modernisation and consolidation within the cork industry and proving to the world that cork is the best closure for every wine segment.

Maintaining the momentum of innovation and performance improvement

"Five years ago we took the initiative to be proactive in the fight against TCA. We set a number of priorities to improve sensory performance, which we have pursued relentlessly since then,” said Mr Amorim.

"First and most importantly, we adopted a new attitude to problem-solving and people now recognise the importance and value of research and development.

"Second, we took control of the entire value chain from bark to bottle, getting rid of many of the middlemen along the way. That move meant we could control cork quality right through purchasing, production and distribution and so minimise the risk of cork-related problems for our customers.

"Third, we introduced new technologies to improve existing processes. I'm talking now about the CONVEX system for boiling the raw material and INOS II for cleaning cork discs and our Twin Top ® corks.

"Fourth, we set up a new R&D team, headed by Dr Miguel Cabral, which has led us to think differently about technical issues and paved the way for breakthrough developments such as the ROSA TCA-extraction process.

"Finally, we established quality control laboratories that use sophisticated analytical techniques to ensure that we can reliably control all of our production processes and deliver the sensory performance winemakers seek. We continue to improve our quality control resources and, for example, now have six GC-MS machines operating 24 hours a day, seven days a week.

"We have achieved very good results so far and there has been an enormous improvement in cork quality over the past five years.

"But the worst thing we could do now is to relax and think that because we have solved the problem of TCA we have done enough. We see this as the departure point for the next cycle of performance improvements, not as an arrival point.

"In our plan for the next three years, we will be doing more of the same but in a better way.

"We'll be further tightening process controls so the product is absolutely sound from a sensory point of view. And we will be extending our reach to work more closely with distributors and retailers, because increasingly they prescribe the choice of closure.

"We'll go on investing in new plant and equipment — such as our recent purchase of the Equipar technical cork facility — and in research and product development.

"Our research focus is already moving onto other areas of technical performance such as the sealing ability of cork compared with other closures, especially synthetics, and what role, if any, the cork closure plays in wine development. We have joint studies under way with the universities of Porto and Bordeaux and I think people will be surprised by the results when they are published.

"We are also developing new cork closures to meet market needs. We do not believe that a single closure can cover every single wine segment. And I disagree with those who say that cork will only be used on the very top wines. We want to produce cork products for every single wine segment — natural corks, Twin Top ® corks for premium wines and Neutrocork ® for the popular premium segment.

"The wine industry now is very competitive. Producers are offering different brands for different market segments and choosing different closures for each segment , as a means of preserving value. We're anticipating and responding to that need and taking a more proactive approach to marketing."

Encouraging modernisation and consolidation of the cork industry

Mr Amorim said that the modern technical demands of the wine industry had led to changes in the structure of the cork industry and he suggested there were more changes to come.

"For years there was a very long supply chain with too many players involved along the way — the cork grower, middleman, cork buyer, small manufacturers, exporters, distributors. That's finished," he said.

"A reliable supplier must control the whole production process, from bark to bottle. They must buy raw materials directly and deliver finished product to the winery. This has raised the stakes for cork suppliers. Many small companies lack the critical mass to respond to the wine industry's needs for high performance and quality assurance. Those who can't perform technically will fall out of the industry.

"At present there are over 500 players in the cork industry, of which around 50 are exporters.

"In future, there will be fewer companies and they will be better companies if they choose to control the whole supply chain, because that's the only way they can control quality and guarantee their product will meet the necessary standards."

Proving cork is the best closure

In terms of challenges, Mr Amorim said that one of the biggest facing the company was proving that cork is a better wine closure than the alternatives.

"We have already proved that cork is better than synthetics and attitudes to these closures are clearly changing as problems become more apparent," he said.

"No opinion-leader is defending synthetics any more. They have a cheap image and people are really questioning their use.

"We also have to show that cork is better than screw-caps. Research is showing that screw-caps are not the ideal closure. For example, the Australian Wine Research Institute trials have shown persistent reductive characters in wines sealed under screw-cap and there is more and more anecdotal evidence of winemakers and wine drinkers experiencing some problems.

"The role of oxygen and the contribution of the closure to wine development is a very big issue and I think it is an area where no other closure can compare with cork. The scientific research to be published later this year will confirm that.

"There is also the risk of destroying the value of brands and the image of wine by rushing to a single closure — for example all synthetics or all screw-caps. Obviously winemakers will make their own choices, but the last thing I believe the wine industry wants is for wine to become a commodity. Value comes from differentiation, and if wine becomes a commodity, that value and the recognition of that value by the consumer is going to be lost.

"At the end of the day, let consumers choose. Don't dictate that they have to drink wine only with a screw-cap or a cork or with plastic. Give them the option."

Embracing the future with confidence

Mr Amorim concluded the interview by reaffirming his confidence in the long-term future for Amorim and for cork.

"At the moment people are seeing screw-caps as trendy and fashionable, but this wave of enthusiasm will wear out. When that happens, cork must be better than ever and ready to take back that market," he said.

"I continue to believe that cork has all the attributes to win this battle overall — especially if we maintain the enthusiasm and determination of the past five years.

"Already there are signs of a change of attitude in the market and our own sales continue to grow very strongly. Amorim has achieved double-digit growth in each of the last eight years in both New World and Old World markets, despite flattening wine production worldwide, and we expect this growth to continue.

"We have a very strong team of people who understand the needs of today's wine industry and who have skills and experience in businesses where technical performance is paramount. I'm talking, for example, about people with experience in the wine industry, food and beverage, food packaging, and even the automotive industry.

"Most importantly, we are more committed than ever to providing better products and better service. I have no doubt that if we maintain our current strategy we will emerge not just as the company selling the most, but as the company providing the most reliable closure for every single wine segment."

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