Samuel Bradhurst & Schieffelin & Somerset Co.

Operating out of New York City, Schieffelin & Somerset Co. (S&S) is a major American importer of premium wines and spirits, maintaining regional centers in California, Florida, Georgia, Illinois, Massachusetts, New Jersey, and Texas. The S&S portfolio includes such prestigious brands as Hennessy, Dom Perignon, Moët & Chandon, Chandon Estates, Tanqueray, Johnnie Walker, Grand Marnier, J&B, Pinch, Buchanan's, The Classic Malts, Rufino, and Casa Lapostolle. The company is co-owned by Diageo PLC and Moët Hennessy Louis Vuitton (LVMH). S&S is one of the United States' five oldest continuously operating companies.

Tracing Company Roots Back to Colonial America

Although the Somerset portion of S&S is only 40 years old, the Schieffelin side dates back to the foundation of the United States to a man named Jacob Schieffelin, who if given the choice would not have had the republic come into existence at all. Schieffelin was born in 1857, the son of a German immigrant who settled in Philadelphia in 1745. During the Revolutionary War he remained loyal to the Crown of England and served in the loyalist army. Captured in 1779 he was imprisoned in Virginia before escaping to New York--which was held by the British--and then following the English army to Canada. In Montreal he became a merchant and importer, and after the war he returned to the States, settling in New York, where in 1894 he bought out the business of a brother-in-law, Effingham Lawrence, who had been a New York drug merchant since 1781. Schieffelin then took into partnership another brother-in-law, John B. Lawrence, and established Lawrence & Schieffelin, the distant ancestor to today's Schieffelin & Somerset. The pharmaceutical business that Schieffelin entered was in its infancy. At the time, pharmacists had no standing, and most physicians mixed their own medicines and even rolled their own pills. Lawrence & Schieffelin served as a wholesaler to druggist's shops, which did little more than supply raw materials to physicians, and also sold items such as varnish, paint ingredients, and glass. The first college of pharmacy was founded in 1821 in Philadelphia, and it was not until this period that the line between retail and wholesale druggists became blurred, as prescriptions began to be filled by trained pharmacists.

Located on Pearl Street in lower Manhattan, Lawrence & Schieffelin not only bought, sold, and imported drugs and medicines, it also traded fancy goods, perfumes, and other merchandise. Schieffelin dominated the company and was instrumental in the firm becoming involved in lucrative, yet risky, shipping ventures. His first such investment in 1795 netted a princely sum of $25,000. A few years later, as Napoleon entered the world stage and France and England were trying to deny the other's trade with the United States, the shipping business became highly dangerous. Some of Schieffelin's ships were captured, prompting Lawrence in 1799 to strike out on his own, leaving the firm to change its name to Lawrence Schieffelin. In 1805, it would become Jacob Schieffelin & Son when Henry Hamilton Schieffelin was taken into partnership. (The younger Schieffelin was a graduate of Columbia College in 1801 and then studied law with a prominent New York attorney. By all accounts he was something of a renaissance man, versed in most of the arts and sciences, regarded as a "living encyclopedia.") Again, Schieffelin did not limit his activities to drugs and medicines. Old newspaper advertisements indicate that the firm dealt in "Muscovado sugars," "coffee in hogsheads," cotton from Guadaloupe, "double refined saltpeter," brimstone, and even gunpowder. The elder Schieffelin remained the head of the business through the War of 1812. Despite the loss of two ships, one seized by the French in Amsterdam and another by the English in the West Indies, the firm was able to carry on. In 1814 Schieffelin retired (he died in 1835) and son Henry took over the business, which for the next 35 years would be called H.H. Schieffelin & Co.

The first task that Henry Hamilton Schieffelin faced in assuming leadership of the family business was to overcome the effects of a long war, which had a devastating impact on the economy of the young nation. As business conditions improved so did the firm's fortunes. The company moved from Pearl Street to larger accommodations on Maiden Lane. The panic of 1837 did little to hinder growth. In fact, in 1841 the firm moved to an even more spacious property located on John Street. In 1848 the company grew via acquisition, purchasing the stock and adding the business of Hoadley, Phelps & Co. A year later Henry Hamilton Schieffelin retired, leaving four sons--Samuel Bradhurst, Sidney Augustus, James Lawrence, and Bradhurt Schieffelin--to take control of the firm, which was now called Schieffelin Brothers & Co.

Of the four, Samuel was the dominant partner and chiefly responsible for the firm's growth during the next phase of its history. In 1854 a six-story building was constructed to house the business, an expansion that also allowed the opening of a department devoted to druggists' sundries and shop wares such as mortars, percolators, and pill machines--a major area of growth for the company for the next several decades. As had been the case from the start, however, Schieffelin was nimble enough to take advantage of opportunities that arose outside of pharmaceuticals. With the discovery of petroleum in Pennsylvania, the firm established an office in Titusville, Pennsylvania, and became the first company to ship petroleum into New York City for sale. The ability to adapt to conditions was of vital importance during the Civil War, 1861-65, when the conflict suddenly severed Schieffelin's ties to major customers in the South, many of whom had outstanding accounts that would never be paid. Nevertheless, the company was able to find new sources of income that more than made up for lost business.

Following the war, the four Schieffelin brothers retired from active participation in the company, which in 1865 was once again renamed, becoming W.H. Schieffelin & Co. Lead partner was William H. Schieffelin, son of Samuel B. Schieffelin. Other partners, nonfamily members, included William A. Gellatly, Joseph H. Westerfield, and William N. Clark. The company grew through acquisition in 1875 by purchasing A.B. Sands & Co. In 1882, Schieffelin spurred organic growth by establishing one of the finest laboratories of its kind in the United States. By the end of the 1800s, the company had sales offices located in Chicago and San Francisco, and served Europe through its operations in London, England. It also forged an important alliance with The Farbenfabriken (the Bayer Company), acting as the German drugmaker's representative in the United States.

Prohibition Leading to Shift Away from Pharmaceuticals

Schieffelin entered the 20th century as a leading pharmaceutical wholesaler. In 1906 it became the first company in the United States to file proofs of purity to federal regulators, receiving Guaranty Number One. But soon, because of Prohibition, Schieffelin's business would switch from pharmaceuticals to alcohol, albeit at first it was alcohol intended for medicinal purposes. The drive for a legal ban on alcohol grew out of the religious revivals that swept the United States in the 1820s and 1830s. Although local temperance laws were enacted, it was not until the 1900s that the drive for national prohibition gained momentum, leading to the 1917 ratification of a constitutional amendment to outlaw spirits, and the passage in 1919 of the National Prohibition Act, better known as the Volstead Act, to provide enforcement. In truth, the enforcement effort was dependent on local views regarding prohibition, so that in many areas authorities turned a blind eye to the sale and consumption of spirits. The new laws did succeed, however, in making spirits more difficult to acquire, leading to bootleggers and rum runners, who either manufactured their own beverages, sometimes in a bathtub according to popular accounts, or by smuggling through the United States' porous borders. Another way to procure spirits was the result of a loophole in the law that allowed alcohol to be purchased for medicinal purposes. As was to be expected, the number of prescriptions written for medicinal alcohol soared. Two of the most prescribed "curatives" were Hennessy Cognac and Moët & Chandon Champagne, both of which Schieffelin & Co., as the business was now called, imported. It was in this way that the 125-year-old drug wholesaler developed a thriving new wine and spirit business.

Key Dates:
1794: The predecessor to Schieffelin & Co. is established as a drug distributor.
1920: Prohibition begins, taking Schieffelin into the medicinal alcohol business.
1962: Schieffelin closes its Pharmaceutical division.
1963: Canada Dry Corporation forms Somerset Distillers.
1980: Moët-Hennessy acquires Schieffelin.
1986: Guinness acquires Somerset.
1987: Moët-Hennessy and Guinness create Schieffelin & Somerset as a joint venture.
1997: Guinness merges with Grand Metropolitan PLC, creating Diageo PLC.

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