Global closures market

Published by Sally on August 15, 2017

A version of the article was first published in the February 2016 issue of Drinks Business.

Keeping tabs on trends in the global closures market is tricky business. The OIV estimated global production in 2015 at 275 mhl. That’s more than 36 billion bottle-equivalents, but that top line number includes all formats – bag-in-box, tetrapak, pouches etc.

Just a short twenty years ago, cork had an effective monopoly on the bottled wine market. With TCA at probably its highest level in mid 1990s, that decade saw a spate of synthetics manufacturers start in the market. Many of these have also exited the market, leaving Nomacorc a ‘virtual’ monopoly in the synthetics segment. Stelvin –the original proprietary brand of wine screwcaps – had entered the wine market as early as the 1970s, but acceptance was at that time hard to come by.

A happenstance of factors at the turn of the millennium provided seminal moments that launched screwcaps into the mainstream. Long skirts made screwcaps aesthetically pleasing and distanced the concept from that short-skirted bottom end of the market. In Australia, a band of Clare Valley riesling producers opted to use screwcaps in 2000. In New Zealand the screwcap initiative launched in 2001 and saw that country quickly rise to a near-90% adoption of screwcaps across the board. In the UK, major supermarkets, led by Tesco, ‘encouraged’ producers to use screwcaps. Diam also launched in the early 2000s, after the first lab-scale supercritical carbon dioxide trials had taken place in 1998.

All of which means the last fifteen years have resulted in a breakup of the cork monopoly. Industry estimates vary, but the approximate proportions show a half-decent correlation.

Company estimates of global closures market, breakdown by segment

Global market (billion units) Cork (%) Screwcap (%) Synthetic (%)
Nomacorc 1999 14.1 95 3 2
Amcor (Stelvin) 2004 18.8
Nomacorc 2014 17.3 54 29 16 (of which 13% Nomacorc)
Guala 2015 26 63 25 12
Amorim 2015 17.5 68 23 9
Diam 2015 18 60 24 16
Amcor (Stelvin) 2015 23.5
Broad brush best fit? 20 60 25 15

Sources: company data; pers comms

Estimates by the two leading screwcap manufacturers notably exceed those of the other closure manufacturers. Guala Closures’ marketing director Anne Seznec estimates the market at “26 billion bottles, or around 30 billion including bag-in-box and tetra.” In terms of share, though, they’re similar: As a member of the European Aluminium Foil Association (EAFA), which represents 70% of screwcap manufacturers, Seznec has strong confidence in the screwcap estimate.

The manufacturer of Stelvin was quick to realise the opportunity in Australia and NZ in 2000 and 2001. Guala swiftly followed this up, launching their first wine-screwcap in 2003, consolidating their position as a leading global wine-screwcap manufacturer with a string of acquisitions – GlobalCap, which “was the leader in Europe at the time” said Seznec, adding “we built a plant in NZ, then we bought AusCap, and the latest acquisition was Metal Closures in South Africa”.  The real kickstart for screwcaps for the wine industry, she confirmed “was Clare Valley, the NZ screwcap initiative and then UK retailers requesting screwcaps”.

Screwcaps have been the clear, biggest winner of the last decade, from a standing start in 2000. Seznec said “people are switching from low quality agglomerate cork to screwcap. They’re more economical and more reliable.”

Synthetics, now essentially Nomacorc, have around 15% market share. That company continues to innovate rapidly. Following on from the launch of their more sustainable stopper, BioSelect, in 2013, their vice president for strategy and innovation, Malcolm Thompson said “we continue to innovate [and] recently announced our sparkling wine product, ‘Zest’, which will officially launch in April or May 2016.” This is a synthetic stopper made using the same technology as SelectBio, but for bubblies.

But arguably the biggest turnaround for Nomacorc was being bought by Vinventions at the beginning of 2015. The new owner is a one-stop shop for closures, also owning cork and screwcap company Ohlinger. Thompson added Vinventions had also recently signed a global distribution agreement with Vinolok. He said “you’ll hear a lot about Vinventions in 2016, offering complete wine closure solutions for still and sparkling wines.”

Having lost up to 40% market share since 2000, the cork industry is sounding considerably more confident about its long term future. Firstly, the development of high quality technical corks have offered something reliable and consistent. Dominique Tourneix, the managing director of Diam Bouchage said “within corks, there has been a clear, strong growth for micro-agglomerated corks in the last ten years. They are more consistent and cleaner, owing to steam [Amorim] or supercritical carbon dioxide [Diam] cleaning process. They have progressively replaced low end corks.”

Tourneix added “it looks as though the cork industry has been able to put a brake on their share loss in the last five years.” Diam has played its part in this. Tourneix said “Diam’s yearly volume is now roughly 1.3bn, so about 10% of the cork share.” The company is targeting 20% share of the cork segment … by around five years’ time.

Amorim’s communication director, Carlos de Jesus, said “the expectation is that we will cross the 4 billion stoppers mark in 2015.”  He added “we’ll continue to regain market share from alternatives that we’ve seen since 2010. Five years of consecutive growth doesn’t happen overnight. 2010 may have been a tipping point, but it started long before,” stressing “technical performance is at the core of this growth … ROSA [steam cleaning process against TCA, launched 2003] was a big change in direction, it was the first time the cork industry had a solution for a technical problem. From this moment, everything changed.”


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