Sustainability and Future of Cork

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Pacific Life Inurance compompany, Omaha, Nebrka, and in New York, Pacific Life and Annuity Phoenix, Arizona If you travel through southern Portugal's dry, hilly Alalantaso region between the months of May and August You might hear this sound moment that sound, it's exactly the same sounds the Romans heard two thousand years ago Carlos D Jazus. He's the director of communications at Amarim Cork. The world's largest cork producer And the sound he's talking about is an axe hitting a cork tree during the cork harvest Delicate job The harvester has to cut into the tree just enough to access the layer beneath the bark That layer, the cork itself is then stripped away becomes orange and there's this really sweet honeysuckle kind of smell around and there's a thump and the birds are sing. I can tell you it's truly magical Amaram's cork gets turned into a variety of products shoes, flooring, insulation, But about one third of it is carved into little cylinders that get stuffed into the necks of wine bottles And every year, we sell about six billion of these corirks around the world. Th those six billion corirks translate into more than eight hundred million dollars in annual revenue These days in the wine business is no longer the only game in town Back in the nineties, ork would have ninety sixcent, ninety seven percent market share. And we all know that your propensity to listen when you have ninety sixcent or ninety seven percent market share, that propensity does not go up On the contrary. so we paid a price for that For the Free e Eonomics Radio Netork, this is the economics of everyday things. I'm Zachary Crackett. Today Wine corse. has been harvested in the Western Mediterranean region for thousands of years Early civilizations used it to make sandals and fishing gear, or to close jugs and barrels It wasn't until the seventeenth century that Cork found what some might consider its true calling in Northeastern France It is when a little known wine region called Champagne Back in the sixteen hundreds, it had a problem to solve. They had a good wine, but very quickly the whole thing went south if you didn't package it well And that's when that incredible connection between wine, glass, and corore comes together Legend has it that the first person who had the idea to close a champagne bottle with a piece of cork was a monk with a familiar name Dom Parinon. While champagne and other regions of France became famous for their wines, the story of cork itself is distinctly Portuguese Well as a Portuguese, Qirk is part of identity It is the only thing where effectively and objectively Portugal is a world leader. Portugal produces half of the world's corp But that didn't happen by accident Portugal's climate is very hospitable to cork oak trees. It's sunny, humid, and not particularly rainy But there's another reason the Portuguese have remained the world's biggest cork producers. The protection of the cork forest in Portugal dates back to the twelve hundred We have over one third of the cork forest in existence in the world The Ck oak tree is a species called quirccus suber. They can live for centuries, and each one can produce a hundred pounds of cork every time it's harvested Qork oaks are also beautiful to look at, with wide trunks that turn orange after the harvest and dark green leaves Why isn't every country planting forests of corork as suber to get into the cork market It turns out, cork production has a natural barrier to entry It's a slow growing You cannot touch a corcoke until about twenty five years have gone by. So that's more or less when you do the first harvest. The first harvest does not yield quality cork. And by law, you cannot go back to that tree until at least minimum Nine years have gone by Second harvest, still not good enough to make natural cork stoppers that are the big generator of value for both the forest and the industry On the third harvest So off the bat, you're going to have forty three years of growth and care before that tree matures People are planting core cokes, but You have to have a certain vision and a certain way of looking at sustainability in the long term that it's not really on the radar of a lot of people After it's been stripped from the mature trees, the cork gets hauled away to massive outdoor storage units, where it seasons and stabilizes for six to nine months. Then it's boiled, which sanitizes it and also makes it more pliable Afterwards, humans and machines assess millions of planks of cork to decide how each one will be used And that decision is going to determine if that piece of cork is going to end up in a bottle of wine Only thirty percent of these millions and millions of planks of cork is good enough Once its caliber is determined, the cork is cut into strips and punched with a machine to extract the cylindrical stoppers. Following yet another round of quality control Amaram ships its corks out to more than twenty thousand wineries around the world They rely on Amarim's corks to keep their wine safely inside the bottle and to improve its taste over time One single cork stopper Int it, about eight hundred million cells each one of them carries a little bit gas very similar to the air that we breathe, which of course has oxygen. and that is going to shape the evolution of that wine, just as it shapes any other chemical reaction. And winemakers around the world know that The choice of closure is the ultimate wine making decision Wine drinkers care about that decision too. A twenty nineteen study from the Journal of Wine Economics found that US consumers will pay an average of eight percent more for a bottle of wine that has a court closure rather than a screw cap hasas its challenges It can actually ruin a bottle of wine. And it's expensive Natural cort closures can cost up to two dollars each compared to screw caps, which cost around twenty five cents Today, cork stoppers are found in just seventy percent of wine bottles A drop of more than twenty five percentage points from thirty years ago And that's a shrinking share of a shrinking market. Because wine production and consumption are on the decline How does the world's largest cork producer cope? That's coming up Looking for the ultimate World Cup watchatch party in New York? Head to Queen's Group Stage HQ at the USTA Billy Jean King National Tennis Center. 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Additional taxes fees and restrictions apply, see Mint Mobile for details go is a significant industry expports of cork and cork products exceeded one point two billion dollars in twenty twenty two And most of that revenue comes from wine corks Amaram Malone sells around half of all wine stoppers produced all over the world When something goes wrong Take notice What was threatening The industry is somethingomething called two hundred forty six trichloreesole This actually had an impact in people's lives in jobs, in companies, in businesses Tryichloralanosol or TCA. is the culprit behind what's commonly known as cork taint It's a component that is mainly a byproduct of environmental contamination ennvironmental pollution and that generates enough flavor or an off smell in cork that can ruin a bottle of wine And for a long, long time, we didn't really understand what it was production methods in Portugal in the eighties and nineties may have compromised quality and seemed to have led to an increase in cork taint According to Wine Enhusiasts Magazine, by the two thousands, as many as nine point five percent of wine bottles were contaminated with TCA Rates of cork taint hover around three percent As the problem persisted, winemakers turned to other kinds of closures, like plastic, synthetic cork, and screw caps Buyers didn't mind those alternatives And the cork industry saw cork taint as an existential threat since we got our proverbal kick in the bag from the plastics and then the screw caps The research and development start producing really, really interesting results In twenty sixteen, Amaram unveiled a sophisticated chemical analysis system called NDTch It uses a process called gas chromatography to identify trace amounts of TCA in every wine cork they produce So we have that system to a cuto point of zero point five of a nanogram It's something like finding one drop of water hundred Olympic size swimming pools D is ice says NndyTech has effectively solved Amaram's corkaint problem But he knows that with nature, perfection is often elillusive This is the moment where the scientists will tap on my shoulder and say, rememember, there's no such thing as zero in science. It's easy to fall into the temptation of promising perfection in this world We have a really good risk management policy and that's what we have been doing But for a lot of wine drinkers, the damage was done Screw caps in particular, have gained in popularity since two thousand especially for wines meant to be drunk soon after they're purchased In the US, around thirty percent of bottles use screw caps In other parts of the world, it's a lot higher New Zealand would use about ninety five percent of metal closures Australia would be about seventy fivecent, seventy eight percent But you know what? Until the pandemic the fastest growing market for cork anywhere in the world. was actually Australia If Australians don't mind drinking wine from screw capped bottles Why did they suddenly start buying more corirks? It turns out that Chinese drinkers demand wines with cork stoppers China became the leading export destination for Australian wine. And if you want to sell a bottle of wine in China It's very clear what you need to do There's another glaring difference between cork stoppers and other types While screw caps and less popular alternative closures like plastic and glass can be recycled None of these alternative materials enjoy the same kind of afterlife as core There's a handful of organizations that collect cork for recycling And Amaram also runs cork recycling programs around the world In twenty twenty three, it collected nine hundred and fifteen tons of corp. and turned it into all sorts of products And in its second or third life, Cork still retains some value value of one ton of recycled cork can be as much as twelve hundred to thir thousandteen hundred dollars a ton. Now this is a lot more than equivalent amount of plastic or other recycled materials that we recycle on a daily basis A recycled wine cork can't be turned into another wine cork Mostly for hygiene reasons Instead, it becomes flooring, construction materials, home furnishings, Inulation on rocket boosters And of course, The brand Birkenstock is famous for its use of cork soles The ZZeus wouldn't tell us whether Amaram provides the cork for any specific brand