One of the oldest agroforestry systems in Europe, known by its Portuguese name Montado, is one of the oldest examples we have on the continent of a symbiotic relationship between humans, plants, and animals that creates a productive system. The Montado forests are predominantly found today in Portugal and Spain, where they are protected as part of the natural heritage of the land. It is such an important refuge for native wildlife and such a beautiful wild landscape that most of us humans tend to consider it fully natural, in our disconnected mindset, meaning there are no contributions from humans in its creation and maintenance. The original system sees predominantly two large canopy tree species: Cork oak, with its bark harvested for cork, and Holm Oak, serving as shade and providing fruit forage for animals, such as the world-famous Iberian black pig, sold as a delicacy in most Spanish and Portuguese restaurants. Unfortunately, the Montado system is collapsing, with millions of cork and oak trees dying prematurely due to climate change and, especially, poor management of the system.
Traveling through this amazing landscape and meeting the farmers who own the land and still produce under its fabulous trees, there are two predominant narratives. There are stories of total neglect, where families who own their ancestral land no longer live in the region, with new generations having moved to Lisbon, Madrid, or beyond. Some of these areas are almost abandoned, with only the cork trees harvested every nine years for a steady, but declining, cash flow. In another scenario, the land is leased to a livestock rancher who leaves his animals to pasture as they wish. Without the threat of predators like the Iberian Lynx or the Iberian wolves, the over-domesticated animals become picky grass eaters, overgrazing the land and harming the health of the soil and trees. The division of land and private property has made the situation worse, but the reality is that whenever there is poor livestock management and overgrazing, the system collapses. Whenever nature is left alone to do its own thing, it cannot thrive without the collaboration of humans and animals, so the trees also die, and the system deteriorates, producing less cork with each harvest—a clear sign that the trees are less healthy.
We can see the light at the end of the tunnel when we visit farmers like Francisco Alves and João Valente, both part of Orgo , a collective they co-founded with two other farm entrepreneurs to promote the transition to regenerative agriculture in Portugal. In Herdade São Luís, managed by Francisco, and Monte Silveira, managed by João, although in very different parts of the country, there is a common trend of developing a production system that fosters collaboration between humans, trees, plants, and the animals they raise underneath the trees. A key common factor in their system is the goal to achieve healthier soil and the understanding that the domestic animals they manage on their farms are partners that help maintain the health of the land, rather than merely a source of euros per kilo of meat. They both practice what is known as holistic planned grazing, and special attention is given to a landscape approach to their land, considering the importance of all the elements in the system—from the variety of grasses and forage plants that cover the soil to the trees that provide shade and support for the thriving ecosystem, as well as a good harvest of high-quality cork every nine years and an important complement to the diet of animals in the case of the oak trees.
A few weeks ago, I had the opportunity to spend a week in Portugal diving deeper into the Montado system, not only from the farm perspective but also from the perspective of the industry, visiting Amorim Cork, the largest industrial player with a history in the industry dating back to 1870. As I visited their production facilities near Porto and had the chance to speak with the CEO of their cork unit for wines and spirits, I was amazed by the level of technology applied to an industry that my own prejudice viewed as old and traditional. In the 90s, with the advance of plastics and other synthetic materials, they quickly lost 30% of the market, and all signs pointed to an industry in fast decline, disrupted by new modern technologies that they could not outcompete in price.
The management back then, still under the control of the founding family, decided to believe in the business and invest heavily to address the key challenges that cork presented to their customers, especially in the high-end wine market, where there was still significant resistance to synthetic materials and an opportunity to make natural cork a more reliable solution. Among the key challenges was the presence of a molecule, the result of a fungal contamination that the industry calls TCA, which, when present in excess in the cork used in a bottle of wine, contaminates the wine and spoils its flavors. Up until the 90s, this was a common occurrence that caused up to 5% of all wine bottles to go to waste. With the help of biotechnology, machinery brought in from the health industry, and state-of-the-art lab analysis, Amorim is now able to provide their customers with a 100% guarantee that their natural cork products will have safe TCA levels. They achieve this by testing every piece of cork that goes to their customers who opt for the guarantee in a modern facility with an almost fully automated production line supervised by biotechnicians. If any fault is discovered in a bottle that went through the inspection, all costs are fully covered by Amorim, like an insurance policy. With this and other quality control developments throughout the entire production line, Amorim was able to stage a comeback and take over the market, entering new segments that had previously not been addressed. Now, it is common to see cork applied to high-end Mezcal produced in Mexico and Rum from Central America. Amorim has also diversified, creating a new unit to explore new applications for cork, fully utilizing all the material that is processed in their plant, which can be used in applications ranging from NASA-built rockets to interior design for houses, shoes, and apparel.
As the cork industry started seeing brighter days and regaining market share, executives began looking at an imminent supply problem. The production of cork throughout the very fragmented supply chain of Montado farmers was in decline. Modernization, a tough dictatorship that turned many cork forests into row crops, and the lack of investments in the sector created the perfect storm for the decline of the “Sobreiro” tree, as it’s known in Portugal. So, ten years ago, Amorim decided to make a move into the supply chain and acquire a large estate with 2,000 hectares of Sobreiro trees close to Lisbon. The strategy of going into forestry aims to understand how modern technology can help restore the Montado forests or even make it possible to grow new areas of Sobreiro. In ten years, they have conducted extensive research with the support of universities, ranging from irrigation to seedlings and plantations.
The key challenge remains how to build a steady supply to support a growing industry reliant on a tree that, under normal conditions, needs 28 years to grow before its first low-quality harvest, followed by another nine years for a second harvest that can yield better quality. If well maintained, it can provide healthy yields throughout the entire life cycle of the tree, which lasts for 200 years. For someone like me, deeply interested in investing in nature-based solutions, I’m fascinated by the cork story. A remarkable natural material with so many applications that does not require the killing of the tree to harvest, supports immense biodiversity, and is already an important shield against desertification of the Iberian Peninsula, definitely deserves more attention as an investment opportunity. My feeling is that the path of intensification and monoculture of irrigated Sobreiro is not the answer, but rather a well-managed Montado system where the Sobreiro coexists with holistic management of animal production and other species, integrating complementary production that benefits the whole system, such as aromatic herbs and honey. Not to mention the importance of the landscape as a natural refuge for wild animals and humans, who are in dire need of reconnecting with nature and feeling part of an ecosystem that truly cannot thrive without us.