Corticeira Amorim and the sustainability of the cork oak business

How Corticeira Amorim, one of the largest cork oak producers in the world, is fostering innovation to overcome the effects of droughts in its business.

With over 700 thousand hectares of cork oaks, Portugal is the world’s largest producer of cork, producing around 50% of the world’s cork, while 70% of the world’s cork is transformed in the country. Cork is mainly used for cork stoppers, cork coverings and flooring, cork composites, and insulation, and the sector represents Portuguese exports of around €900M every year. Corticeira Amorim, with sales over €600M and listed in the Portuguese stock exchange, is the leading company in this sector, and climate change is having a significant impact in its activities.

Cork oaks are typically grown in rain-fed land. Cork oaks are characterized by having very long production cycles – cork can only be extracted from a tree every nine years (“production cycle”), the quality of the cork is only good enough for “noble” uses such as cork stoppers after its third production cycle, and cork quality is a result of what happens during this whole period.

Climate change, in the form of droughts, is severely impacting both the quantity and quality of the cork produced. In terms of quantity, one of the main impacts of droughts is the reduction on the growth rate of cork on a tree, measured by the reduction of the thickness of cork-rings on the cork bark. A recent study has identified, for example, that the growth reduction was of 28%, 32% and 42% versus previous 4-year averages for 1995, 1999 and 2005, years of severe drought in Portugal. Additionally, droughts make production cycles even longer if they affect trees in the early stages of their lives, and they have also caused an increase in the death rate of cork oaks.

In terms of quality, less water implies a drier and less flexible cork, which deteriorates the quality of the final product. Also, climate change has had an impact in the cork production season, shifting the start of the period during which cork can be extracted from May to June.

Water management is thus particularly important, and producers, including Corticeira Amorim, have been trying to adapt their production cycles to recent rain conditions. Many studies have been developed, enabling Corticeira Amorim to periodically analyze the amount of rain that occurred and that is expected in the rest of the production cycle and adjust the moment at which cork is extracted to ensure quality standards are met and quantity produced is aligned with market demands.

In order to further control the impact of droughts on its production, Corticeira Amorim is currently developing an innovative project in partnership with the University of Évora and smaller cork cproducers in the country. Instead of continuing the rain-fed agriculture style of growing cork oaks, Corticeira Amorim is investing in the plantation of hectares of irrigated cork oaks. Following an intensive agriculture model, trees are being planted in straight lines, accompanied by meters of tubes that ensure continuous drip irrigation.

Each hectare of irrigated cork oaks costs Corticeira Amorim more than twice as much as each hectare of rain-fed production, but Corticeira Amorim expects the results of these investments to be significant. Recent results have shown that this new system enables a more stable quantity and quality of the product, and even shortens the production cycle.

Corticeira Amorim is continuing to perform important research and planning significant investments in order to ensure the sustainability of its business as the effects of droughts become even more significant in Portugal. In the near future, a relevant proportion of cork oaks should be grown under an irrigated model, and thus increasing the capacity to resist to the impact of climate changes. A rapid development of this new methodology is especially relevant in this sector given its long production cycles.

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4 thoughts on “Corticeira Amorim and the sustainability of the cork oak business

  1. This is incredibly interesting. I just wonder what would be the effect on the industry and the Portuguese economy if the industry is slow to adapt and problems arise. I wonder if the wine industry will continue its shift to bottle caps?

  2. Very interesting article letting us discover the industry.
    It certainly makes sense to re-engineer the production through drip irrigation and shift the mix towards a less drought dependent production.
    I wonder though if Corticeira Amorim is not more threaten by:
    – Usage of synthetic cork alternatives for numerous applications: insulation, flooring and obviously wine
    – Potentially in the long run other cork production regions increasing production potentially from climate change benefits

    I guess that the increase in cork prices may have been a driver to accelerate shift away from cork!
    Loving the traditional way to do things, I hope what touches our wine for years stays organic…

  3. While Corticeira Amorim were able to adapt by introducing irrigated cork production, I wonder if there is anything else they could be doing. For example, are they recycling unused cork substrate left over in the manufacturing process? Are there any solutions to shorten the production cycle? Also, as Alex and Artatak allude to above, the impact of climate change on cork production is only compounded by the competitive threat of substitute presentations, like screw caps and plastic closures. Easier to open, superior at preventing oxygen from entering the bottle, zero risk of cork taint. Back in 2010, it was found that up to 10-25% of corks are tainted; see source below. I wonder how Corticeira Amorim has mitigated these threats of quality and competition, let alone the threat of climate change. Thanks for an interesting read, Joana!

    Source: https://www.theguardian.com/environment/2010/aug/22/cork-screw-cap-wine-environment

  4. Given the statistics and current state of research, has Corticeira Amorim started losing market share? What are other cork oak producers doing to combat this change? How are consumers of cork oak reacting to this change? From your post, it seems like drip irrigation is a stop gap solution instead of a long-term, sustainable solution.

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