The global ginseng market size was valued at USD 679.90 million in 2022. It is projected to reach USD 1019.13 million by 2031, growing at a CAGR of 4.6% during the forecast period (2023–2031).
Ginseng is a naturally occurring root predominantly used in medicines. It is widely found in North America and the eastern parts of Asia. Demand for ginseng is likely to grow considerably in tandem with the rising consumption of products processed from ginseng, such as personal care products and dietary supplements, among others. Ginseng provides an array of health benefits and is hence used in healthcare and pharmaceutical products. It is also used as an ingredient in a diverse range of food and beverage products. Ginseng products are relatively high priced as compared to other processed goods made from organic herbs. As a result, a significant share of the demand stems from consumers in developed countries with high purchasing power parity.
Ginseng has been majorly utilized for its superior medicinal properties, especially in Asia, where herbs have always played a crucial role in ancient remedial measures. Prominent pharmaceutical companies and medical drug manufacturers are likely to use ginseng in manufacturing various end-products, owing to its rising popularity in modern medicine and growing acceptance across all demographics. Furthermore, the nature of the market is oligopolistic, owing to the presence of a large number of cultivators in selected regions.
The global market is still in its nascent stage and likely to remain in the introduction stage, owing to a limited number of players, restricted cultivation, and a relatively poor distribution network. Growing demand across end-use industries will help the market grow exponentially in years to come. The market is expected to be led by the Korean ginseng, which is preferred by various companies manufacturing personal care products such as NatureBell and NutraChamps, among others. Increasing focus on health and the rise in influencer marketing are expected to generate a large volume of sales for ginseng as a nutrition product in the form of tablets, capsules, and tonics.
There has been a significant shift in food consumption trends. With rising internet penetration, relative easing of immigration policies, and ease in doing business, people are increasingly inclined towards experimenting with spices in their food. Along with this, there is also a significant increase in awareness regarding the consumption of healthy foods without compromising taste. These aspects are likely to lead to an increase in the demand for ginseng, which is used in combination with various spices such as ginger, rosemary, cinnamon, chilies, and clove, among others. There has been significant demand in the trade involving spices, and Europe and the U.S. are among the key consumers. The total import value of spices rose to USD 2,460 million in 2017 from around USD 2,310 million in 2016, which underlines the considerable potential spice trade holds for the ginseng market.
The use of ginseng as a tonic for improving the functioning of the spleen and kidneys, among others, creates opportunities for the extract in the manufacturing of health drinks. Thus, the product is expected to register a high growth rate in the food and beverage sector. In addition, ginseng’s ability to blend or be used with various spices also offer an opportunity in the processing of ready-to-eat meals. The food and beverage industry has been actively involved in researching the use of ginseng to pacify consumer health concerns. It is used in beverages such as energy tonics, tea, alcoholic drinks, and coffee, among others. The burgeoning food and beverage sector, of which the emerging middle class has been one of the most important growth factors, is likely to be a growth driver for this market.
Furthermore, the considerable increase in health awareness is also expected to positively influence the ginseng market. Dietary supplement demand has been increasing exceptionally in various regions around the globe. For instance, approximately 50% of American adults are known to consume at least one type of dietary supplement, and this trend is likely to be replicated in Latin America, owing to the geographical and cultural proximity the two regions share. Manufacturers of dietary supplements are likely to focus on using ginseng in a bid to capture a large market share in a sector where consumers prefer using ethically and organically produced products.
Animal adoption is gaining traction around the world, with more and more people bringing pets home. Ginseng, a supplement, especially for cats and dogs, improves immunity and reduces the threat of contracting certain diseases in animals. Growth in the demand for dog/cat food, which was valued at around USD 12,400 million in 2017, is likely to lead to a hike in the growth of this market in the years to come. On the basis of variety, the market is segmented as American ginseng, Siberian ginseng, Korean ginseng, and others. Among these, Korean ginseng is expected to dominate the market.
Ginseng has been traditionally used in Chinese medicines in the form of extract or powder. It is also proven to offer a significant number of health benefits and, thus, used in healthcare and pharmaceutical products. The market is likely to witness considerable growth from industries involved in catering to the food and beverage sector. Ginseng also has antioxidant and anti-inflammatory characteristics, which help in boosting the immune system while reducing the risk of microbe infection and viruses. In addition to this, it has also been found to decrease the risk related to some cancer types.
Developed economies around the world are likely to focus more on providing affordable healthcare to aging demography. The emergence of exponential technologies, personalized medicine, expanded delivery sites, revamped payment models, and disruptive competitors are likely to bring windfall gains for manufacturers of ginseng products. The use of artificial intelligence and the internet of things (IoT) for developing mobile applications to aid human health assessments is expected to lead to a considerable hike in the ginseng market. Manufacturers are also embedding cutting-edge technologies to increase production while keeping an eye on the quality. The use of modern technologies will aid in bettering machine performance and generate higher outputs, which is likely to result in the generation of a decent profit margin. Furthermore, the market is likely to benefit from on-the-go healthcare programs. Key healthcare companies are expected to partner with mobile application developers and market ginseng as a viable, healthy alternative for synthetic drugs by way of customer engagement on social media platforms, and device integration and focusing on qualitative outcomes.
The market, on the basis of source, has been segmented into wild and cultivated. The cultivated ginseng segment is registering a significantly higher growth rate as compared to the wild ginseng segment. Volatile trade conditions, geopolitical dynamics, and currency fluctuations are expected to be some of the driving factors expected to aid the growth of the segment. Producers are likely to prefer cultivated ginseng as it offers characteristics such as robustness and the ability to produce a higher number of berries and seeds as compared to wild ginseng plants. Furthermore, cultivated ginseng seeds offer continuation of supply and are less likely to disrupt the supply chain. In contrast, wild ginseng requires specific conditions, and it only grows within its natural habitat.
Based on the form, the market is segmented as powder, tablet, beverage, and others. There has been a significant rise in the consumption of and demand for ginseng capsules and oils, which has led to overall growth in the demand for ginseng extracts. The numerous advantages the product offers, such as a reduction in inflammation and potential in boosting immunity, are expected to accelerate the use of ginseng extract in an array of finished consumer products.
Canada, the U.S., South Korea, and China are among the key producers of ginseng, and the market is dominated by China and South Korea. While China is likely to record the highest production of ginseng in the coming years, South Korea’s distribution network is far more robust. This is highlighted by the considerably high production ratio China has with respect to the world alongside a significantly low distribution ratio. For instance, the production ratio of China was pegged to be over 52% in 2018, and that of South Korea was pegged to be in the range of 30–35%. In contrast, South Korea has a distribution ratio of around 55%, while that of China is likely to be just over 30%. Moreover, Korean ginseng is expected to have a wider consumer base, owing to its stronger and tighter inner structure. This economy is expected to have a strong framework, owing to the presence of around 12 local associations within Korea. One of the primary reasons why ginseng is likely to be profitable in Korea is the presence of regions that have high ginseng production. For instance, Chungnam accounted for around 77.5% of the nation’s total production, as per the Food and Agriculture Organization (FAO).
On the flip side, certain factors may restrict the growth of the ginseng market. Ginseng cultivation requires specific climatic conditions to aid growth, and it is therefore cultivated in only selected regions, which might affect the availability of ginseng for commercial use. In addition to this, unpredictability in terms of climate change is further expected to slow the market growth rate. Over-exploitation in the use of wild ginseng has led to a decrease in the availability of wild ginseng, which has resulted in the illegal cultivation of wild ginsengs in a bid to fulfill the increasing demand.
Key players operating in the market include
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