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The Cork Industry Is Coming for Your Bottle of Whisky

The Cork Industry Is Coming for Your Bottle of Whisky

Portugal’s Corticeira Amorim SA, the world’s biggest producer of cork products, is looking to grow beyond the wine market and boost sales of its stoppers for spirits, as whiskey, gin and cognac drinkers increasingly opt for closures that are different from mainstream caps.

The spirits market is “the area where we are growing the most this year,” Chief Executive Officer Antonio Amorim said in an interview in the northern Portuguese town of Mozelos, where his great grandfather founded the company in 1870.

Amorim already makes T-shaped capsulated cork stoppers for premium cognac, gin, vodka, tequila and even craft beer bottles. Amorim cork is also used to make the stopper for the 100,000-pound ($132,000) Dalmore Trinitas 64 -- one of the most expensive whiskeys in the world.

The Cork Industry Is Coming for Your Bottle of Whisky

The strategy is now to expand Amorim’s share in this segment as consumers seek out products with a more upmarket look and feel, with cork also seen as a more sustainable, eco-friendly material.

While cork stoppers are used in more than two-thirds of the 20 billion bottles of wine produced every year, they’re only used in about one billion of the 40 billion bottles of spirits sold globally, Amorim said. Corticeira Amorim sells about 350 million cork stoppers to the spirits market compared with 5.5 billion stoppers for the wine sector.

The Cork Industry Is Coming for Your Bottle of Whisky

“The spirits market is a lot bigger than wine because we are talking about all types of spirits,” said Amorim, 53.

Spirits Acquisitions

Corticeira Amorim is open to acquisitions if it can find the right companies to help fuel its growth in the spirits segment, the CEO said. The company earlier this year bought out the remaining 30% stake in Sweden’s Elfverson & Co AB that it didn’t already own. Elfverson makes what are known as bar-top closures, a cork attached to a piece of fine wood or plastic that’s used to seal a spirits bottle.

“We have a lot of new projects,” Amorim said. “We believe a lot in the growth of cork and wood for premium spirits because these segments are growing the most.”

The CEO expects 2020 revenue to fall 6% compared with last year, to about 735 million euros, driven by falling sales of wine and champagne in restaurants, hotels and other outside-the-home venues due to virus restrictions. Cork stoppers account for about 70% of the company’s annual sales.

For 2021, Corticeira Amorim expects sales to rise 6% to 7% to around 780 million euros on the back of rising demand for wines and spirits that use cork over alternatives such as plastic stoppers, Amorim said. If conditions improve, the company may resume extraordinary dividends next year after canceling this year’s payment due to the pandemic, he said.

There could also be added growth from other products ranging from flooring solutions for children’s playgrounds and nursing homes, to cork materials used in cars, high-speed trains and even space shuttles, Amorim said.

“When it comes to new uses for cork, the limit is our imagination,” Amorim said.

©2020 Bloomberg L.P.