In Wisconsin, an unusual alliance is shaping up between an international Taiwanese electronics conglomerate and that state’s farmers who grow the medicinal root ginseng. And the farm at the heart of that alliance is Hsu Ginseng Farms in Wausau.
Autumn means harvest time at the farms. General Manager Nick Sandquist is standing in front of a field of brown, muddy rows, with a digger machine whirring behind him. “That’s plowing through the earth and plowing up the bed," he observes. "And the roots being laid out on top behind it. And then people will come behind and pick those roots by hand.”
The roots are white, spindly chunks covered with hairy threads, that branch off like nerves. Wisconsin’s soil and climate are perfect for growing ginseng, and the state produces more than 90 percent of the U.S. crop. Nearly all of it is exported to Asia.
But the industry surrounding the root is still pretty low-tech. As the 75-year-old founder of Hsu Ginseng, Paul Hsu, says, "Picking seeds [is still done] by hand, setting up the garden still by hand. We could use more modernization and equipment, including all the washing and the processing and all that too. But it's still all hand work. Very labor-intensive type of industry."
Ginseng is used in Chinese medicine. It is said to help with stress relief, stamina and boosting immunity, among others, says Will Hsu, Paul's son and current owner. Culturally, he says the product is supposed to be taken using the whole root in traditional forms.
"Traditionally, whole roots would be sliced by a Chinese pharmacy or Chinese medicinalist and then added to other herbal remedies and tonics," he says.
It’s Hsu’s 400-some acres of American ginseng, along with the wider Wisconsin crop, that Foxconn Technology Group wants to invest in.
The Taiwanese tech giant — that likely made your cell phone — is in Wisconsin to manufacture LCD screens in a huge plant south of Milwaukee. But Paul Hsu says the company has a personal link to ginseng, which he heard about after meeting Foxconn CEO Terry Gou in China.
“Every morning before he left for work, his mom would say ‘Hey, Terry, did you drink your ginseng tea?’ So, when he told his mom that he was coming to Wisconsin to invest, she thought he was coming here to buy ginseng or invest in ginseng, not knowing that the project was much, much greater," says Paul Hsu.
Ginseng is big in China, especially for the older generations. Foxconn officials wouldn’t agree to an interview, but in a statement said its investment in ginseng will involve marketing, modernizing the industry and research.
Will Hsu says that Foxconn could bring technical innovation to lab testing and use robotics and artificial intelligence to make sorting, trimming and slicing roots less labor-intensive, potentially reducing costs.
"What I fear most is not being relevant," says Will Hsu.
Reduced costs could help maintain a market China, says Will Hsu, which has already levied additional tariffs on ginseng because of the Trump administration's tariffs on Chinese goods. It could also encourage millennials to purchase the product, he says.
Although, he says that the restriction now from the millennial market isn't necessarily money, the restriction now is time.
"And that's why they're switching to things like coffee and energy drinks. Things that you pretty much just open and consume. Those are the types of products that they're gravitating to nowadays," Will Hsu says.
He notes that there are ginseng pills and new ways to consume ginseng. But he's hoping the collaboration with Foxconn, including research on the health benefits of the root, can help with marketing and product innovation as western consumers look toward eastern medicine and vice versa.
“What I fear most is not being relevant," Will Hsu says. "If you’re not relevant to the next generation of consumer or this generation of consumer, you don’t have a product that consumers want.”
Steven Lewis is a China expert at the Baker Institute. He says associating with Wisconsin ginseng may help Foxconn with branding back in China.
"If they’re getting into medicinal products, this might be a good one," he notes. "Wisconsin ginseng has a very good reputation in China. It’s known for being clean, good, very high quality, like other American products that relate to things that are ingested, especially health products."
Lewis notes that Foxconn has been accused of bad labor practices over the years, tarnishing its reputation. In fact, some in Wisconsin strongly opposed the billions of dollars in incentives and environmental rollbacks the company received to build its LCD screen plant.
Connecting with the ginseng industry may help Wisconsin's growers and Foxconn, in an effort to present itself as a good corporate citizen.
