Ginseng sellers diversifying
Wisconsin growers seek new customers amid trade war
WAUSAU - It has a square bottle, and inside a brown, knotted ginseng root is suspended in amber liquor.
The ginseng bourbon stands out among a shelf full of whiskeys at at the Trig’s Grocery Store in Wausau.
The product, called American Ginseng Whiskey, is made by Ploverbased Great Northern Distilling. It hit shelves for the first time last year, around the same time as the Central Wisconsin Convention and Visitors Bureau hosted the first-ever International Wisconsin Ginseng Festival in Wausau.
Ginseng is most commonly taken in tea. That’s the way Chinese devotees of the root have enjoyed it for centuries. It’s also used as a spice in food. And in Marathon County, which grows more than 98 percent of all U.S. ginseng, ginseng exports are an $8-million-per-year industry.
That business now faces what could be an existential threat. New tariffs in an escalating trade war with China will raise the price of U.S. ginseng to Chinese consumers by 15 percent. That price hike has already begun to threaten exports, and growers don’t yet know whether the trade war will escalate.
That’s where ginseng bourbon comes in, along with ginseng beer, ginseng extract pills, and ginseng herbal energy drinks. The products themselves aren’t necessarily new; some have been in development for decades. But for ginseng growers and distributors such as the Wausau-based Hsu Enterprises, the newfound diversity of ginseng products could be the key to unlocking new customers in America — and weathering the storm brought on by President Donald Trump’s trade policies.
That is, if enough American consumers decide ginseng whiskey is worth buying.
At Hsu Ginseng, evolution isn’t a foreign concept.
The company has been pioneering ways to deliver ginseng to consumers both foreign and domestic since the 1970s. Ginseng is said to improve overall health and well-being, though scientific study of the root’s effects have been inconclusive.
Traditionally, Will Hsu said, ginseng would have been purchased as a whole root, then taken to a traditional Chinese medicine shop or pharmacist to be sliced. But that wasn’t exactly conducive for busy families or individuals, Hsu said. So Hsu’s, which was founded in Wausau by Will Hsu’s father Paul in 1974, started to sell pre-packaged slices of ginseng. After a period of having to convince the consumer that the slices were, in fact, not bad roots or a lesser product, the company moved into making ginseng tea bags in the 1990s. It was just another step in making ginseng more accessible, said Hsu.
Next came ginseng capsules, which brought even more convenience. Consumers could take three or four a day, without having to taste the earthy flavor of the root.
But the biggest leaps in innovation at Hsu’s have been in the last few years, first with the introduction of GinMax. The supplement is made of double-concentrated extract powder from the ginseng plant, and allows the consumer to take only one pill a day of the ginseng supplement, Hsu said.
“It was meant to simplify the process,” he said. “But also get into once-aday type of capsules, which are very approachable for the American market.”
Last year, at Wausau’s International Wisconsin Ginseng Festival, Hsu’s released its newest products. There was ginseng beer and the ginseng bourbon. And one of the most promising new products, Hsu said, is Shangnergy, an herbal energy drink containing several natural ingredients.
“It’s something that’s very local, it’s different and nobody else is doing. And that’s currently what the attraction is,” Hsu said. “It gets (consumers) to think differently about the product.”
These types of health products allow Hsu to target a whole new type of consumer: the health-conscious American.
“The stereotypical American consumer is not super familiar with ginseng, but probably knows it might be good for them,” he said. “But because they didn’t grow up with the product ... they don’t know the benefits. And so
you’re really marketing to a group that is actively seeking lifestyle or health changes.”
For products especially like the beer and bourbon, which are made with Bull Falls Brewery in Wausau and Great Northern Distillery in Plover, respectively, they’re more unusual and lend themselves to also being great gifts, as well.
“It’s more unique and more personal,” Hsu said. “Anybody can buy ginseng.”
Braced for losses
In response to increases the Trump administration tacked on to steel and aluminum coming into the United States from China, China chose to implement a 15 percent tariff on ginseng, along with several other U.S. exports.
China is by far the largest consumer of American ginseng. Since almost 90 percent of the crop is exported, a new 15 percent tax on the product is a serious concern to local ginseng farmers, said Hsu. And though the normal buying season for ginseng is after harvest, which typically happens in late September, his company has started to feel the effects of the tariff. Hsu’s has already lost one order due to the tariffs causing an uptick in price.
He said the last time the industry saw cancellations was about three years ago, when the price of ginseng spiked dramatically.
Of course, this isn’t the first time the market has fluctuated, Hsu said. Over the 114 years that ginseng has been cultivated in the area, numbers have risen and fallen. The USDA has only been tracking the root since 1992, but at that time, there were 649 farms in Marathon County, with 1,200 acres of farmland, producing 1.4 million pounds of ginseng, according to a report.
Since then, though, things have changed. Prices remain the same for the root, between $35 and $40 for a pound of ginseng, though prices are rising to farm it, Hsu said. Still, the weather and the soil in central Wisconsin make it ideal for ginseng production. The state is still producing 98 percent of the ginseng grown in the United States, said Bill Kaldunski, the president of the Ginseng Board of Wisconsin.
The effects of the tariffs aren’t known yet. Harvests start in the fall and export declines will take time to measure.