By Kelsey Riley
Over the past decade, one of the true rising stars of the Lexington social scene has been the Lexington Distillery District, located on Manchester Street just minutes from downtown. The 25-acre property is undoubtedly one of the most historic in the area, having been home to one of the state's oldest distilleries, James E. Pepper Distillery, which began to produce whiskey in the late 1800s. After sitting vacant for almost 50 years after the distillery was shuttered in 1967, the property fell into the hands of a team of local entrepreneurs in 2008. They have revitalized the area and turned it into a local hotspot, one that can't be missed by visitors to Lexington for the fall yearling sales and races.
The Distillery District features a pair of working whiskey distilleries-James E. Pepper and Barrel House Distillery, with its associated Elkhorn Tavern. The popular Goodfellas Pizzeria and eclectic The Break Room bar boast full bars and expansive patios that run alongside the Town Branch Creek. Ethereal and Fusion Brewing and Wise Bird Cider Co. brew beer and cider on site, and like the distilleries offer tours. Crank & Boom Ice Cream Lounge makes everything for its sweet treats in house and sourced from local ingredients. The Burl Bar and Arcade makes use of a 1926-built and restored train depot, while Brevede Coffee Co. provides the pick-me-up you need amidst inspecting yearlings.
The aforementioned James E. Pepper Distillery, of course, pays the greatest homage to the region's history. The Old Pepper whiskey brand is synonymous with the establishment of not only with the Distillery District, but of the bourbon industry and revolutionizing distilling practices in Kentucky and indeed, everywhere.
The Pepper brand began in 1780 with James E. Pepper's grandfather Elijah Pepper, who began making whiskey in Virginia during the American Revolution. In 1812, Elijah established a distillery on a tract of land in present-day Versailles, Kentucky, that is today home to the famed Woodford Reserve distillery. It is believed by some that Old Pepper whiskey was the first whiskey distilled in Kentucky.
Old Pepper whiskey was produced on the Woodford County property until 1877, and in the interim period Elijah's son, Oscar Pepper, made his own mark on the family brand; alongside distiller James C. Crow, Oscar Pepper perfected the sour mash method of distilling, which allowed consistency to be maintained across batches of whiskey and is widely used in distilling to this day.
Oscar Pepper died in 1865, leaving the family business in the hands of his 15-year-old son James E. Pepper. Pepper was assisted by his guardian and mentor Colonel Edmund H. Taylor and began an ambitious expansion of the Pepper distillery. But as Pepper struggled to pay back a loan to Taylor, Taylor took over the distillery in 1877 and soon sold it to Woodford Reserve proprietors Labrot and Graham.
That setback did little to temper James E. Pepper's enthusiasm, and just a year later, in 1879, he secured enough capital from investors to purchase the land that is the present-day distillery district, and began building what was then the country's largest-ever distillery.
For 20 years, Old Pepper whiskey enjoyed an incredible run of popularity across the U.S. and indeed, the world, relying on the recipes perfected by Pepper's grandfather Elijah. Meanwhile, Pepper-who embarked on an illustrious lifestyle of promoting his brands and is credited with creating the famed Old Fashioned cocktail–also made his mark on the Thoroughbred industry on both sides of the Atlantic. He won the Kentucky Oaks twice and also the 1900 Doncaster Cup with King's Courier.
James E. Pepper passed prematurely in 1906, but the brand popularity he was instrumental in establishing meant that the Old Pepper brand carried on. Prohibition in the 1920s brought challenges of its own, with the distillery ceasing production but selling the whiskey already bottled for medicinal purposes. Not even a fire that burned down the original distillery in 1933, the year before prohibition was repealed in Kentucky, could put paid to Old Pepper; the distillery was rebuilt on the same site and in 1934 began making whiskey again, now under the ownership of Schenley Distillers Corporation. The Old Pepper brand continued to thrive for some 30 more years, but when overproduction saw the Kentucky bourbon industry meet with hard times in the late 1960s, Schenley-which also owned distilleries in nearby Louisville and Lawrenceburg, deemed James E. Pepper as surplus to its needs and closed down and abandoned both the brand and its building.
James E. Pepper bourbon was lost until the early 2000s, when it came on the radar of bourbon entrepreneur and enthusiast Amir Peay. Peay embarked an extensive quest to gather historic artifacts related to the bourbon, from memorabilia, advertisements and documents, to floor plans and mechanical drawings for the distillery and its still systems, preserved bottles from various stages of the brand's development, and even historic recipes and production methods, many of which can be viewed in James E. Pepper's shop and museum. As Peay prepared to breathe life back into the distillery, he brought seasoned distiller Aaron Schorsch on board.
“I came here in 2016 and there was plywood up on all the windows and everything needed to be redone,” Schorsch recalled. “They gutted everything, put new windows in and new concrete floors, and then myself and Amir got with some local contractors and refitted everything. The only thing here that is old and rustic is the building; all the infrastructure is brand new–the piping, the tanks and all the equipment. But we still have the rustic atmosphere from the old buildings.”
On Dec. 31, 2017, Peay, Schorsch, and the team at the revitalized James E. Pepper distillery filled its first barrel with whiskey derived from the same recipe used before the distillery was shut down some 50 years earlier. As whiskey typically needs four to five years to age in the barrel, that initial batch will soon be ready for release, with just one barrel thus far opened.
“We have maintained a couple of the recipes that Amir sourced,” Schorsch explained. “We have very similar products to the 1776 rye and bourbon that we're producing ourselves, but we've also resurrected an older bourbon mash build that we found they were making years and years ago in the original version of this distillery. That is one of our flagship brands that we're producing, that and 100% rye. We're also making several different bourbons with different combinations of small grains in them that we can use either for blending or as standalone products.
“They're all starting to come up on the age where we can start to release them, we just didn't want to push anything to market that wasn't quite right. We're coming up on our fourth year of aging so hopefully we'll start to release that in a limited fashion, but I'd like to see some of that stuff go a little bit older too, because everybody does like a little bit of age especially on some of those bourbons.”
In the meantime, James E. Pepper is sourcing whiskey from other distilleries-a common practice for start-up distilleries while their debut batches age-and currently offers four core products: its 1776 Rye and Bourbon, as well as its Old Pepper Distillery Single Barrel Rye and Old Henry Clay Straight Rye Whiskey.
Describing the single barrel rye, Schorsch said, “you're going to get all of the traditional things you would get out of rye. A lot of people talk about the spiciness, but it's not so much spice as it is heat. It's more of an herbal grain. So you're picking up a lot of different flavors in there. When we get what I consider a really good barrel, I even get a bubble gum and a candy-like sweetness in there in the background as well, behind all the notes you get from the wood, the vanilla and the caramel and things like that.
“We also offer our 1776 bourbon and rye. They're both 100 proof blended products. This is a single barrel product and there is going to be a lot more to come too as our bourbons and other products we are making come of age. We have done seasonal products too. Our Kentucky Finest Oak is a secondary aged rye product that we usually release in the spring and fall. That should be coming out soon, and it's in high demand. It leaves the shelf pretty quickly.”
As Schorsch describes the long and arduous process of perfecting a barrel of whiskey, one can't help but draw links to the lifecycle of a Thoroughbred.
“There is a lot of time and work that goes into making whiskey,” he said. “You're waiting years and years to get back your investment, and hopefully it turns out like you want it to. Whenever we get into the stuff that we've got aging, it's always a hard thing. You want to rush it, because you can taste how good it is already, but with whiskey you have to be patient and make sure that it hits its peak or as close to the peak as you can get. I feel like a lot of our whiskeys are getting really close, but there are some that I would like to see go just a little bit further to make sure that they are at that peak, that they're not underachieving.”
While Kentucky's main distilleries today are situated outside of Lexington, Schorsch said the city is embracing having its own distilleries, even if they are producing on a much smaller scale.
“There are a couple smaller distilleries here with us in town,” he said. “I think the people in this area have latched on really quickly and are proud to have a distillery in their backyard. We get a lot of out of town visitors, too that come for conventions and games and also the horse racing industry. We get a wide array of visitors, and I think we've been received well.”
As the James E. Pepper Distillery and other area attractions continue to draw visitors back to the historic Distillery District, Schorsch said he is excited about what the future holds for the brand.
“I've been in the industry since I was a young man,” he said. “I was 19 years old when I started. So I'm very confident in what we're making that we'll be able to carry on the tradition of what this brand means and what the history of this family has meant to the distilling world.”
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