Tracing the Roots of Seagram
Love often tends to derange people, if not bewilder them. Perhaps, this explains what Thomas Seagram did when he was all set to get married in 1913. The son of Joseph E. Seagram commissioned an entire new range of whisky to commemorate his love – the whisky we know as Seagram’s V.O today.
The establishment of Seagram Company dates back almost half a century earlier than this event. The company started its journey in 1857 in Waterloo, Ontario, as the Joseph E. Seagram Co Ltd. Almost 60 years later, in 1928, the company was taken over by Bronfman brothers-owned Distillers Corporation Ltd, who later on guided the brand towards international fame. The brand gained some infamy during the prohibition period and eventually enjoy luminary status, thanks to flamboyant and showy lifestyle of its owner, Samuel Bronfman.
When the Bronfman family migrated from Russia to Canada in 1889, they were pretty well off. However, upon arriving in Canada, the family discovered that the climate was not suitable for tobacco farming— an occupation that had helped sustain them for so long. Sadly, there was no source of income for the Bronfmans in Canada. Yechiel (Ekiel), the head of the family, decided to leave everybody behind to work as a laborer in the Canadian Northern Railway. Eventually, he managed to land a better job in a sawmill and started selling frozen whitefish and firewood along with his sons in winter. After having managed to earn some capital, the family started to trade horses, which gradually guided them to the bar and hotel business.
The prohibition laws of Canada, often varied according to province. It bolted the legalized drinking establishments and prohibited alcohol sale as a beverage. In fact, the laws also forbade the consumption and possession of alcohol, unless it was a private dwelling. One could only purchase alcohol for scientific, artistic, medicinal, sacramental and industrial purposes. The brewers and licensed distillers were only allowed to sell their product outside a province. Bronfmans counted such loopholes in the law as profit opportunities. Thus, they steered their way out of the hotel business and started liquor retailing by acquiring the Montreal-based Bonaventure Liquor Store Company.
In the first half of 1920, the Bronfmans established their first ever distillery— Distillers Corporation Ltd. The company sold of 50% in 1926 to Distillers Company, a consortium of British distillers which dominated the global scotch market during that period. At the same time, Joseph E. Seagram Co Ltd. established in the year 1883 also went public. The Bronfmans ended up buying out all the stocks of the Seagram business and evolved as a public company named as the Distillers Corporation-Seagrams Ltd. The company flourished in the prohibition period by exporting alcohol to the US where the laws were comparatively stringent than in Canada. However, by 1930, the company started to witness a slump in profit owing to the fact that it was becoming increasingly dangerous to trade alcohol with the US.
The Post-Prohibition Build-up
A post-Prohibition investigation on alcohol smuggling led to the arrest of the Bronfmans. However, a year later, the case was blatantly dismissed. Sam Bronfman, being a proficient businessmen, earlier predicted the end of prohibition and stockpiled large amounts of whisky for aging. In 1933, the company possessed the largest privately aged whisky stock, which enabled it to eventually monopolize the business. It further helped in the establishment of Joseph E. Seagram & Sons Inc. as a part of the company’s American venture.
During this phase, Bronfman worked hard to eradicate the long established distrust associated with whisky-drinking which had set in over the bootlegging era. He wanted to give it a touch of sophistication and propriety. Aging and blending became a hallmark of Seagram. The company redefined liquor marketing by selling the product in bottles, instead of barrel consignments. This allowed them to have more control on the product that ultimately reached the consumers. This practice also went on to become an industry standard. By the end of 1936, the cumulative sales of the company reached $60 million in America and $10 million in Canada.
Fast forward to 2000, Edgar Bronfman Jr declared the acquisition of Seagram by French conglomerate Vivendi in an agreement that saw Vivendi draining out a whopping $42 billion in the exchange. The Bronfmans held on to 25% of the merged unit named Vivendi Universal, with Jean-Marie Messier as its spearhead. Later on, the liquor properties of Seagram were acquired by Diageo and Pernod Ricard, which actually went unnoticed because of the hue and cry over the merger.