Sailing the high seas of Israel’s business world

How South African-born Leonard Sackstein survived bumps and setbacks on the way to realizing his Zionist dream.

By LANA JACOBSON
August 2, 2015 14:05
LEONARD SACKSTEIN:

LEONARD SACKSTEIN:. (photo credit: Courtesy)

 
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Leonard Sackstein believed that to be a true Zionist involved having a huge push and pull.

He had just the push he needed in 1972 when he immigrated to Israel. It was so large a push that the newly qualified lawyer, who graduated cum laude with five distinctions at Wits University in Johannesburg, turned his back on a promising future partnership at Werksmans, arguably one of the largest and most prestigious law firms in South Africa, where he had served his articles and worked for five years.

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It was the height of apartheid. He loathed the system, could not abide the idea of the white people’s success at the expense of the black majority. His mother, a widow bringing up three children, was terrified he would get involved with politics and be thrown in jail.

On the other hand, he could not complacently watch the whites get rich at the expense of the blacks. He found himself in an extremely compromised position, but found the answer in Israel.

He had visited the Jewish homeland twice, once for 10 days, and then he lived and worked on a kibbutz for eight months, which coincided with the Six Day War. “I fell in love with the country. In fact, I was kosher, so it was love at first bite, as well as first sight. I promised myself I would return,” he says.

“The combination of the push and the pull made the move crystal clear for me.”

As a young married man, he and his wife returned to the Jewish state in 1972, this time as citizens. But what Sackstein didn’t anticipate was that supporting a family didn’t quite match up to his Zionist inclinations.“On a daily basis one forgets the causes, and has to remind himself of the pull that had them immigrate,” he admits.

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Looking back at his early days in Israel, he remembers rewriting his final law exam and articling for 15 months at a legal firm where the two partners had no intention of offering him a future in the organization.

Meanwhile, he and his wife had attended an ulpan for several months.

Sackstein was reminded of an Israeli American he met on the kibbutz in 1967. The man had a full-time job but he told Sackstein that he wanted to open a small duty-free shop at the airport and he needed partners to run the business while he continued working at his regular job.

Having nothing to lose, he contacted his kibbutz friend, who told Sackstein that he still wanted to open a store. Sackstein responded that he would bring the project to fruition by drawing up a business plan and finding partners to invest in the shop.

Rounding up a motley group – an American, a South African and a Frenchman – he introduced them to the Israeli American and obtained concession rights for a 17-sq. m. shop. The four men became partners, each owning a 25 percent share, and the Israeli American gave Sackstein 5% of his 25% share for Sackstein’s work and legal expertise. “When I was given 5% for my labor I was only 25 years old and I did not realize that 5% of nothing is nothing,” laughs Sackstein.

“We decided to make it a specialized duty-free cheese shop, which our market survey told us only had to make $400 a day to break even. Our research also revealed that we would make over a $1,000 a day. The Israeli American worked for a cheese manufacturer that would supply the cheeses. We called it Israel Gourmet Foods and we opened a store in August 1973, the peak month for travel in Israel.”

What sounded like a good idea proved to be, in Sackstein’s words, “a total disaster.”

“The Frenchman decided after a month to abandon the store and he found employment elsewhere.

The Israeli American was never active in manning the store, so that left the South African and the American running the shop. The American, a flamboyant salesman was not really a businessman, and he and the South African, a retired pharmacist by profession, were as different as well… chalk and cheese.

“The products were not suitable for the market, the shop was off the track and near the toilets, and after six weeks the pharmacist said to me, ‘Leonard, I want you to take my shares.’ I told him I had not a shekel to my name and he told me he wanted me to just take his shares for free. He just wanted to be rid of Israel Gourmet Foods.”

Meanwhile, as the business generated no income, Sackstein began looking for a paid job. This was just as the 1973 war broke out and the market was disastrous.

His second daughter was born a few months later; he had no money and a significant stake in a business losing its pants.

“We were scratching around to survive. This did not fit in with my dream and determination, which I had nurtured as a young boy. I lost my father when I was eight years old and I saw my mother, a young lawyer, struggle to support three children. I would sit as a child and work out the monthly budget with her. I knew then that I would one day have to become very wealthy. But, here I was earning nothing from the shop. The American had bought the Frenchman’s shares and there was just the two of us left. I used to wake up at 5:30 every morning and go to the shop for the early peak period until the flights took off at 9 a.m.”

The partners then opened a small packaging plant, called Taste of Israel, where they bought sweets and chocolates, and sold them under their brand.

“We by now knew there was a demand for confectionery, not cheeses,” says Sackstein. “For two years, we could not draw a cent. Then the business started picking up. Meanwhile, in the evenings I had started doing legal work in English, mainly for South African émigrés. Slowly the business began earning some money and the packaging plant Taste of Israel was the supplier of confectionery for Israel Gourmet Foods.”

They started selling products from Taste of Israel to other outlets and the business started growing one grain at a time.

“We by then had started manufacturing our own sweets, thanks to a partner we brought into the business, who knew the ropes. His family had owned a sweets factory in South Africa,” said Sackstein.

Twenty years later, Sackstein’s business had grown exponentially. The company went public in May 1993. And in 1996 they bought a company called Carmit and changed the company name, from Taste of Israel. Sackstein has had the opportunity to retire twice in the last 15 years, but before retiring he secured the agency to bring in Cadbury’s chocolates.

He had also established a property development company, Lagova Properties, a private company run by Sackstein and his daughter Michal who is also a lawyer.

At age 55, Sackstein decided to take life easier, but this would not last long because another large sweets company, Elite, blocked Cadbury’s entrance into the market. This ended in a 10-year lawsuit, which was finally settled out of court. During this tumultuous time, Sackstein returned to run the company for another four years after having had no day-to-day involvement for the last four years.

Today, his title is company chairman. The company exports 30% of its products, mainly to the US, and the remainder is sold in Israel.

In 2012, Sackstein was awarded a lifetime achievement award by the Manufacturers Association of Israel for his contribution to Israeli industry. And between his involvement with Carmit and Lagova Properties, he now spends as much time as possible sailing the seas in his private yacht, the push and the pull still being used to full effect.

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