The story behind the revival of James E. Pepper Whiskey

The name James E. Pepper is recognisable to most fans of American whiskey. But Amir Peay’s may be less familiar, even though he’s the reason why you’re able to purchase whiskey of that name today. It was this former bartender’s passion for history and the water of life that led him to rebuild its distillery. 

The brand dates back to the 18th century and did not begin with James E. Pepper, but his grandfather Elijah. Back in 1780, when most were concerned with the American Revolutionary War, Elijah Pepper built his first distillery. By 1790 he’d built another in Kentucky and in 1812  he built a distillery on a site that today belongs to Woodford Reserve. Elijah was successful and created a popular brand that was secure enough to withstand the fallout from the Whiskey Rebellion.

After Elijah died in 1838, the distillery was left to his son, Oscar, who continued the family tradition, building a larger distillery on the same site and making notable improvements to the sour mash process with a Scottish chemist by the name of Dr. James C. Crow (you may be familiar with Old Crow Bourbon, which was his creation). Old Pepper bourbon became so popular it was the favourite brand of noted Americans, including Presidents Andrew Jackson, William Henry Harrison and Ulysses S. Grant, prompting Abraham Lincoln to once reply to critics of Grant, “By the way, gentlemen, can either of you tell me where General Grant procures his whiskey? Because, if I can find out, I will send every general in the field a barrel of it!” 

In 1867, the distillery passed to James E. Pepper. “The Peppers ran their distillery for three family generations, well over a hundred years, and there were a lot of very notable achievements there, such as the perfecting of the sour mash process,” Peay explains. “James inherited what the oldest whiskey brand made in Kentucky at fifteen, so the family brought in an old friend and guardian and business partner to help guide young James. That guy’s name was Colonel E.H. Taylor. You might have heard of him?”

Taylor advised James E. Pepper to expand the distillery and he lent him money to do so. When Pepper couldn’t pay the loan back Taylor seized the property and later sold it. Undeterred, Pepper raised capital and came back to Kentucky and built a new distillery in 1879. “That distillery at the time was the largest and most advanced distillery in the United States. He continued to produce old Pepper whiskey using his grandfather Eljah’s Revolution-era recipes. For that reason he called the brand Old 1776,” says Peay. “He was quite the promoter and James was able to take the brand to another level. The Old Fashioned cocktail, legend has it, was created in his honour at the Pendennis Club in Louisville and then he brought it to the Waldorf Astoria in Manhattan in the 1890s and from there it was introduced to the world”. 

Pepper was a bit of a character. He travelled in a private rail car and was a huge name in the world of thoroughbred horse racing, even bringing his horses to England to beat the King’s horses in the Doncaster Cup. Unfortunately, he had no children so when he died in 1906 the Pepper line died with him. His wife sold the distillery to a group of investors who continued to run it and make Pepper whiskey. “The distillery actually was one of the few in Kentucky that was allowed to sell its whiskey for medicinal purposes through Prohibition. The brand stayed alive, but that old distillery burned down in a fire in 1933,” says Peay. “On the exact same footprint, we know this because we’ve got all the old site plans and architectural drawings, a new distillery was built in 1934 and whiskey was produced there under the same old recipes. It thrived all the way up to the 50s and 60s”. 

Sadly, overproduction in the American whiskey industry and the popularity of vodka caused a lot of distilleries to shut down, according to Peay, and the Pepper Distillery was one of them. By 1961 the distillery was abandoned. That’s how it remained until 2008. Until Peay came along. “I’m a big American history buff and I love whiskey. When I learned about this amazing brand I just couldn’t believe it had been abandoned, like a piece of garbage that no one cared about. So I thought ‘How cool would it be to relaunch this great iconic old brand?’ And that’s what I did”. 

Despite previously working in bars and the wine business in California, it was actually his job as a boxing journalist that led Peay to James E. Pepper. “I was looking at some photos of a very famous old boxing match with the first African American Heavyweight Champion of the World, Jack Johnson. On July 4th 1910, he took part in ‘The Fight of the Century’, against Jim Jeffries”, Peay explains. “In the middle of them both was a big banner that said: ‘James E. Pepper Whiskey – Born with the Republic’. I started looking into it. The more I discovered, the more intrigued I became. I uncovered so much about the history of James E. Pepper, a lot of which we won’t have the time to go into now in detail. But it is on our website and in our museum at the distillery”. 

Peay’s initial plan to bring the James E. Pepper brand back was to contact every distillery in Kentucky and ask for assistance. “I sent them a PowerPoint about why I thought this was such an amazing brand. I managed to get some amazing meetings with some pretty interesting people such as CEOs of big companies and distilleries”. This approach wasn’t easy, but Peay eventually saw results. “After ten years of working with other distillers, reinvesting; trying to be smart about my business I’ve really built an independent, bootstrapping whiskey company. To this day I’m the sole owner,” says Peay. “I’ve acquired hundred-year-old bottles full of the original whiskey, perfectly preserved from before, during and after prohibition, as well as old letters, recipes, the exact grain bills, production methods from James E. Pepper’s era and the era after prohibition. We’re making the same historic mash bill and we dug the historic limestone around the property from two hundred feet below ground to get our pure limestone-filtered water, the same water source the Peppers used”. 

It’s a feel-good story, but a lot of blood, sweat and tears have gone into it. Restoring an old distillery is no easy task. It had fallen into a state of disrepair and it took years of lobbying and negotiation to achieve progress. Finally, on May 4 2016, it was announced that the distillery was to be rebuilt with a museum on the remains of the historic site. The first barrel was filled on December 21st, 2017. “Since then we’ve been in full-scale production, making everything in-house in our full-scale distillery! We have our museum here, we give tours and we’re proudly doing it all right in the heart of what’s known as the Lexington Distillery district,” explains Peay. “We’re also very proud that we were able to get back the federal distillery permit for the distillery: DSP-KY-5 (Distilled Spirits Permit Kentucky, Number 5), the 5th license ever issued in the state of Kentucky when it was given to the original distillery. If you build a new distillery in Kentucky today your DSP number will be in the twenty thousands. For us to have number 5 speaks to the heritage of this brand and its place in Kentucky history. There’s just a few of us in the single-digit club”. 

The James E. Pepper distillery rebuild was soon joined by restaurants, breweries, coffee shops, bars and even one of the places where you can throw axes (rad) in the thriving ‘Distillery District’, a 25-acre entertainment district in downtown Lexington. “All these other great independent Lexington entrepreneurs built thriving businesses and it’s become one of the hottest neighbourhoods in the city, it’s actually caused a parking crisis!” says Peay. He might not be a native, but his pride for the local area speaks volumes about the manner in which he has approached the restoration of James E. Pepper.

The fact that the new stills are in the same location where the previous stills were and were even made by the same company speaks to that desire for historical authenticity. “Our solid copper still system was built by Vendome Copper, the Louisville company that builds all the stills for every Kentucky family-owned company. One of the cool things that I uncovered in my research was seventeen pages of detailed mechanical engineering drawings of the still system that was built at our distillery in 1934 by Vendome,” says Peay. “So I went to Vendome with those old drawings and that old manway cover from the old still, which was thrilling for them because their family was almost put out of business by prohibition and they didn’t even have one from that date. It was really exciting to work with them to rebuild the system inspired by the old one, although we did make some improvements. We ended up with a state-of-the-art, advanced distillery and we’re very happy with the distillate coming off the stills”.

There is no warehouse facility at the distillery so the maximum storage capacity there is around 200 barrels, meaning the majority are shipped off-site for storage, although all secondary-finishing is done at the distillery. “There is no long term storage at the distillery, instead we work with a few different distillers who have large rickhouses. People ask why we don’t build our own or use the old rickhouse, but imagine if I go to the city & state and I say I want to store thousands of barrels of whiskey in a densely packed, residential urban area next to all these businesses? It’s just too much of a hazard, so it’s not possible”.

The barrels are brought back to the distillery once the whiskey is matured as bottling occurs on-site, as Peay wanted to honour the fact that the Pepper distillery was the first in Kentucky to bottle its own whiskey (Old Forester were technically rectifiers not distillers). “It was actually illegal in Kentucky for distilleries to bottle their own whiskey in 1890. Rectifiers would bottle so if you were a distillery you had to sell by the barrel to somebody who would bottle off-site, but James E. Pepper hated that because there are a lot of counterfeiters and fraudulent people and no consumer protection laws,” Peay explains. “He sued the state of Kentucky to allow him to bottle at his distillery and got the law changed to allow him to do it and he was also an instrumental advocate for the Bottled Bond Act of 1897. He was one of these guardians of the purity and quality of American whiskey early on”.

While Peay may have been the man who brought the James E. Pepper brand back, he’s the first to admit he’s no whisky maker. That’s why he brought in Aaron Schorsch as master distiller. “You see a lot of people who build distilleries and last year they were an accountant and this year they’re a master distiller, that’s kind of a big leap, right? I know a lot about making whiskey, but Aaron knows how to turn an idea into a reality. He came to us with about almost twenty years experience, his first ten years were at the Lawrenceburg Distillery when it was owned by Seagrams and he also spent time at Jim Beam and Sam Adams,” says Peay. “Today you see a lot of distillers who are essentially marketing people. If you’re out on the road a hundred days a year or two hundred days a year always doing interviews, how are you actually running a distillery? Aaron really runs that distillery and is on-site. He’s the real deal”.

Peay didn’t just revive the James E. Pepper name, but the 1776 brand too, which is made on-site. Initially, however, that wasn’t possible so Peay sought help from elsewhere. “Our 1776 Rye, our best-selling product, was made at the Lawrenceburg Distillery. I really like them as a partner because they’re an ex-Seagrams distillery, which was by far the best whiskey producer in the United States during a very dark era of American whiskey,” Peay says. “They have high-quality distillate and a great team of people there. But most importantly, they made a rye whiskey that had 95% rye in the mash bill and 5% malted barley, a very unique mash bill at that time. But James E. Pepper used to make a pure rye whiskey, 100% rye, and I loved that. None of the big guys in Kentucky made that, pretty much everybody made a rye whiskey with corn in the mash bill. So I loved that connection”. 

The extent of Peay’s historical research and the abundance of surviving records means that he knows an awful lot about the kind of whiskies that James E. Pepper made, from the mashbills, to the type of stills and fermentation techniques he used. “We wanted to maintain that flavour profile so when we distil 1776 at the distillery we’re making it exactly as Pepper did. We are also distilling the actual historic bourbon mash bill that was produced there when the distillery was shut down in 1961,” Peay explains. “The tradition and heritage are very important to us and we want to honour that, but at the same time, we don’t want to be limited by it. I would say at least a third of what we do is innovative mash bills and oak cooperage that I developed along working with Aaron. We’ve established that we will always do a minimum of eighteen months air seasoning, for example. We have sherry casks, we have ale casks. We’re excited to share that stuff when it’s ready to be bottled with everybody and that will be at least another couple of years”.

It can be difficult to balance ambition and progression without compromising your ability to create innovative, interesting whiskey. Peay does feel that pressure to uphold the legacy and the heritage, but early signs for the revived James E. Pepper brand are promising. “We’ve won a lot of awards and got a lot of recognition. I feel good about what we’re making. I know that we use high-quality grain. Our water’s great. Our fermentation and our chemistry are great. Our distillations are perfect. The new make’s tasty” he says. “We love making whiskey and we want to share our passion for it. We’re not trying to take over the world; we don’t need to make tens of millions of cases of whiskey, we’re fine doing it the way we do it, with a lot of attention paid to quality”.