Grow Your Business, Not Your Inbox
Founder of Joseph E. Seagram & Sons Inc.
"I don't want my sons going to school with holes in their pants."-Samuel Bronfman
The driving forces behind successful entrepreneurs are as varied as the entrepreneurs themselves. For some, it's the pursuit of money. For others, it's a craving for power. For still others, it's the challenge itself. But the force that drove Samuel Bronfman to build a small-town distillery into an international liquor empire was the burning desire to be socially accepted. Although he seemed to have it all-wealth, prestige and a loving family-Bronfman (whose name in Yiddish literally means "whisky man") always felt he was an outsider, whom upper-class society looked down upon because he was born poor and Jewish, and because booze and bootleggers were the foundation of his fortune. This hunger to "be somebody," along with his unwavering determination that his children would never suffer the humiliation of being poor as he did, became the fire that fueled Bronfman to turn a family-owned business into a multibillion-dollar dynasty.
Bronfman's entry into the liquor business came indirectly, as a hotelkeeper. In the early 1900s, using the money they'd earned as horse traders, Bronfman and his brothers, Abe, Harry and Alan, purchased several hotels throughout the prairie lands of Manitoba, Canada. Each hotel had its own bar, and the brothers quickly discovered that selling liquor was the most lucrative aspect of the hotel business. But that changed in 1915, when, prompted by the temperance movement that was spreading across Canada, bars in the prairies were banned. The Bronfman brothers almost went out of business-their hotels simple couldn't survive without bars.
But there were gaping loopholes in the new law, including one the allowed the sale of liquor from one province of Canada to another. So the versatile Bronfman and his brothers went into the mail order business, shipping whisky by rail. When the government banned the mail order business but said it was legal to sell alcohol as medicine, the Bronfmans just slapped on new labels, such as "Rock-A-Bye Cough Cure" and "Liver & Kidney Cure."
With the passage of the Volstead Act in 1919, making and drinking liquor became illegal in the United States, opening up a lucrative new market for the Bronfmans. Rather than reduce alcohol consumption, Prohibition seemed to stimulate it, as more and more Americans succumbed to the temptation of this newly forbidden fruit. The liquor kept flowing, now controlled by gangsters. The gangsters were constantly looking for more alcohol, and the Bronfmans had it. Although the sale of liquor for use within Canada was prohibited, Canadian authorities did not ban its export to the United States. In fact, the government almost encouraged it because of the tremendous tax revenue it generated.
As the demand for alcohol in the United States grew, the Bronfmans found themselves running short. So Sam and his brother Harry decided to make their own. Their first attempt was a disaster: The batch turned blue.
Putting the debacle behind them, the Bronfmans expanded their business by opening up export houses along the Saskatchewan-North Dakota border. They continued to experience tremendous success, but that success would not come without a price. While it was legal for the Bronfmans to sell their liquor to their American partners, the booze had to be illegally smuggled across the border, a situation that forced the Bronfmans to cut deals with gangsters. The brothers knew they were in business with a dangerous lot, but in 1922 they discovered just how dangerous when their brother-in-law, Paul Matoff, was killed, allegedly by bootleggers. The murder smeared the family name in the press, prompting Bronfman to decide it was time to move on.to get respectable.
In 1924, Bronfman arrived in Montreal, the liquor supply capitol of Canada. His brothers followed, and they built a distillery just outside Montreal. Though it was a joint venture, it was Sam, now the dominant figure in the business, who ran it. But Sam wasn't satisfied with just one distillery. He wanted the means to make the best whisky in the world. To gain capital and a source of Scottish malt whiskies to blend with his own grain alcohol, Sam formed a partnership with Scotland's Distillers Company Ltd., the world's largest whisky conglomerate.
Back in Canada, Bronfman continued to expand. He purchased the prestigious Seagram & Sons distillery in 1928 and, using the new name, founded Joseph E. Seagram & Sons Inc. With two distilleries, a new name and the aid of his Scottish partners, Bronfman had laid the groundwork for what would become the Seagram empire of today.
Despite the fact that he had built Seagram with the help of his brothers, Sam decided that the business was his and his alone. Through a series of shrewd, some say ruthless maneuvers, Sam forced his brothers out of the company and declared that only his two sons, Edgar and Charles, would ever work for Seagram.
The end of Prohibition in 1933 would create a new era of prosperity for Bronfman and Seagram. But unlike other whisky makers, who were frantically selling any drop of booze they could get their hands on, Bronfman didn't immediately jump into the fray-a move that shocked his competitors. Bronfman believed that Americans, who were used to heavy whiskies, would switch to lighter brands that were more refined. That meant aging his whisky for better quality, and that took time. So while his competitors were making millions, Bronfman held back, quietly building up his stock. The strategy worked. By 1934, Bronfman's aged, blended whiskies had become America's bestsellers. And by the 1940s, Seagram was the largest distiller in both the United States and Canada.
Sam's next venture was in construction. In 1955, he commissioned Ludwig Mies van der Rohe to build his company a New York headquarters. The Seagram Building quickly became a New York landmark.
Over the next decade and a half, Bronfman would gradually turn over the running of the business to his sons. But as long as he was alive, it was understood that Seagram was his company. In his later years, Bronfman would finally gain some of the acclaim and acceptance he'd longed for, including winning the Order of Canada-that country's highest honor for lifetime achievement. But he still felt he deserved more. As longtime friend Sol Kanee reveals in an A&E Biography on Bronfman, "He was king of the heap in the whisky business. He had more money than he knew what to do with. But he didn't have the status that he wanted. He wanted to be a senator. He wanted to be a governor of a big university. That's what drove him on."
But Bronfman wouldn't live to see those dreams come true. In 1971, at the age of 81, he died of prostate cancer. It was perhaps in death that Samuel Bronfman finally achieved the acceptance he so craved. On the day of his funeral, Montreal's airport had to be temporarily closed to regular traffic due to the arrival of so many private jets shuttling in dignitaries from around the world to pay their respects.
Today, under the guidance of Bronfman's grandson, Edgar Bronfman Jr., Seagram has expanded beyond the liquor business to become an entertainment giant, owning movie studios, music labels and theme parks around the world. But no matter how much the company has changed, it still bears the indelible imprint of the visionary trailblazer affectionately and respectfully referred to as "Mr. Sam."
In the process of building his empire, Samuel Bronfman had to deal with some of America's most notorious mobsters, including the likes of Charles "Lucky" Luciano, Meyer Lansky and Dutch Shulz. Although Bronfman's business dealings with these and other infamous gangsters were completely legal, thanks to loopholes in both Canadian and American law, Bronfman was never really comfortable walking the thin line between the two sides of the law. And his connections with organized crime would place him in an uncomfortable position on more than one occasion.
In 1935, Sam and his brothers were charged with smuggling whisky back into Canada. In the end, thanks to what some said were "suspiciously missing" shipping records, the charges were thrown out of court. Bronfman's Prohibition-era dealings would again return to haunt him in the 1950s, this time in the United States, during a congressional investigation into organized crime led by Senator Estes Kefauver. On the stand, Bronfman's name was mentioned by a number of America's biggest gangsters. A lawyer for one of them referred to Bronfman as "a plain, ordinary bootlegger." There's no doubt Bronfman met with mobsters. Meyer Lansky's widow even talked about the lavish dinners Bronfman threw for her husband. But while there were certainly connections, no crimes were ever proven.
Above And Beyond
An ardent fighter of anti-Semitism, Samuel Bronfman gave generously to Zionist causes throughout his lifetime. But perhaps his greatest contribution to Zionism was when he came to the aid of future Israeli prime minister Shimon Peres, shortly after the founding of Israel. In 1951, Peres approached Bronfman seeking assistance for his fledgling country. Peres explained that Israel had no arms and would be unable to defend itself if attacked.
Bronfman immediately took Peres to Ottawa to try to buy guns from the Canadian government. He succeeded in getting Peres $2 million worth of guns at half price. But after the deal was cut, Peres sheepishly explained that Israel did not have the money to pay for the guns. Bronfman immediately called his wife, Sadie, and asked her to arrange a fund-raising dinner for that evening, and, true to form, Bronfman raised the $1 million.