History of Old Pepper Distillery

Bourbon history is not complete without the mention of the Pepper family and their contributions to the industry as a whole. Three generations of the Pepper family distilled whiskey on the forefronts of Kentucky, leaving behind not only a legacy but impacts that helped build the early days of the industry into what it is today. The history of the Pepper family is one that is filled with both ups and downs, struggles and successes, but nonetheless still survives as a brand today.

Generational distillation in the Pepper family began with Elijah Pepper. Elijah was born on Monday December 8, 1760 to Samuel C. Pepper, Sr. and Elizabeth Ann “Lady” Holton Pepper in Culpeper, Virginia. He married Sarah Neville O’Bannon and together they had eight children: Presley, Oscar, Elizabeth, Samuel, Nancy, Amanda, William and Matilda. Sarah was born on Monday September 17, 1770 to Captain William O’Bannon and Presley Neville O’Bannon. Around 1780 Elijah first began distilling in Virginia, starting the generational distilling tradition in the Pepper family. Around 1790, the Pepper family along with Sarah’s brother, John O’Bannon, traveled to Kentucky settling around the area known today as Versailles.

After settling down, Elijah and John built a small distillery near a spring around the town’s courthouse and began producing whiskey. In 1812 Elijah was able to open a new distillery on a tract of land near Glenns Creek in Versailles. On this land he also constructed a log cabin to move his family into. Elijah ran the distillery operations until his death. His actual date of death is up for debate as there are many varying dates, however we can pinpoint it to around the 1830’s. A couple days before his death Elijah’s will was drawn up and to his wife he left most of his assets including the distillery and his slaves. Despite inheriting the distillery, Sarah did not have the interest in it, so her son Oscar began to run the operation.

Oscar Neville Pepper was born on Thursday October 12, 1809. He married Nancy Ann “Nannie” Edwards in 1845 and the two had six children: James, Ada, Mary, Oscar, Dixie and Thomas. Oscar is credited with taking his father’s business and growing it. One of the greatest additions to the family business was the hiring of Dr. James Crow. Dr. James Christopher “Jim” Crow was born in Inverness, Scotland in 1789. He studied chemistry and medicine at the University of Edinburgh in Edinburgh, Scotland and graduated in 1822. After his graduation he immigrated to the United States of America. He first settled in Philadelphia, Pennsylvania only staying there for a brief period of time before moving to Kentucky. He began working at Glenns Creek Distillery. Here he was able to start putting some of his knowledge of science to the test on the distillation of alcohol. He began to measure the acidity of the mash with litmus paper, measure sugar content with a saccharometer and perfected using the sour mash technique. Dr. Crow did not create the sour mash process, but he is known for perfecting it by applying his science knowledge to it. Sour mashing is the process of taking some of the leftover backset from a previous batch of mash and including it in the current mash. This practice helps to encourage a good fermentation process and help prevent the growth of bad bacteria.

During the 1830’s Dr. Crow took his talent and joined the Pepper family at their distiller. Here at the distillery the legendary Old Crow brand was born and distilled. Formulated by Crow himself, the brand turned into a very popular choice for many bourbon consumers. The distillery ran under Oscar’s control until his death in 1867. Oscar was buried at the Lexington Cemetery in Lexington, Kentucky. The distillery was to be inherited by his son James, however at the time James was just a minor so he could not take ownership of the distillery, instead Nancy was to be the owner until he became of age. James E. Pepper was born on Saturday May 18, 1850. Eventually James would take his mother to court of the ownership. James was taken under the wing of the legendary Colonel Edmund Hayes Taylor, Jr.. E.H. Taylor Jr. at the time was already successful in the liquor industry and was a good friend of the Pepper family. He became James’s guardian after Oscar’s death and was going to help him with his family’s distillery business.

James and Colonel Taylor Jr. were successful in gaining ownership of the distillery. James wanted to expand the operations of the company, so the Colonel helped him secure financing to make the expansions. With the borrowing of money comes the necessity to repay the debts. Taylor had intertwined the debts of James Pepper with his own, and soon the Colonel hit financial troubles. Taylor Jr. had also been improving his Old Fire Copper Distillery on credit and became unable to repay the debts. His debts were purchased by a St. Louis, Missouri liquor firm Gregory and Stagg. The firm that was taking over Edmund’s whiskey ventures was made up of James Gregory and the legendary George Thomas Stagg. As a payment for his debts, Taylor Jr. sold his ownership in his distillery and the Oscar Pepper Distillery went up for sale. The distillery was purchased by James Graham and Leopold Labrot in 1878 and the distillery was renamed Labrot and Graham Distillery. Just as quick as James gained his family distillery, he lost it. The Labrot and Graham Distillery would go on to be sold to Brown-Forman in 1941 where they held ownership until sold to a farmer in 1959. In 1993 Brown-Forman purchased the distillery back and by 1996 it had become the distillery for Woodford Reserve.

By this time in his life, James was no longer a minor and he had the knowledge of distillation and how to run a distillery. He moved away to New York after losing the distillery but later returned back to Kentucky to start a new venture. In 1879 he partnered with George A. Starkweather and raised enough capital to acquire a new distillery, the Henry Clay Distillery (DSP-KY-5) in Lexington, Kentucky. The distillery became known as the James E. Pepper Distillery. Here James began producing his own whiskey using his family’s mash bill recipe. He branded his whiskey as Old Pepper and trademarked it in 1880. During this time the bottling of bourbon started to become more feasible as technology allowed for more automation of glassblowing instead of by hand. This allowed for distillers to bottle their products instead of selling it by the barrel. Slogans on Old Pepper bottles started to appear using such phrases as “Born with the Republic” and “Old 1776”. James would also include a strip across the top of the bottle sealing it with his signature of approval of quality.

In his personal life, James married Ella Offutt Kean in 1890. Ella was born on Friday October 3, 1856. The two never had children together. James was a man who enjoyed sports, but his favorite was horse racing. He owned his own stable and horses. Some of his horses even went on to run in the Kentucky Derby. He was known for his flamboyant lifestyle which included traveling on his own personal private rail car named The Old Pepper. The car featured an image of the label of his whiskey. When he wasn’t in Kentucky at his distillery he was often found in New York promoting his brand or socializing with political leaders and businessmen. Often he could be found at the Waldorf Astoria Hotel in New York. James is also credited with helping spread the popularity of the Old Fashioned cocktail. The classic cocktail was originally invented at Pendennis Club in Louisville, Kentucky. James took the cocktail recipe from this gentleman’s club and introduced it to the Waldorf Astoria Hotel and the popularity of the cocktail began to grow. James was also a Kentucky Colonel, an honorary title given by the Commonwealth of Kentucky.

On a cold icy day in New York on Christmas Eve in 1906 near the Waldorf Astoria Hotel, James slipped on ice while on a trip with his wife and died from complications from the fall. He was buried at the Lexington Cemetery in Lexington. Since James had no children, the distillery was inherited by Ella and she sold the distillery and the horse stables. The distillery was purchased by a group of investors from Chicago, Illinois.

The new owners continued to operate the distillery, but tough times for the industry were up ahead. The beginning of World War I caused some efforts and materials to be saved for the war, the Great Depression was soon on the horizon and the biggest hurdle for the alcohol industry, Prohibition, was soon to take place. In 1919 when the sale and production of alcohol in the United States was put to a halt except for six distilleries to produce for medicinal purposes, it sent many distilleries into shut down. Although the Old Pepper Distillery was not one of the distilleries given a license to produce, they were granted the ability to warehouse and bottle some of their products. Early marketing for the brand, even before the Prohibition days, boasted of medicinal uses so the brand resonated to consumers during this time period. This helped the brand to stay alive during the time where many brands were lost forever.

Prohibition ended on December 5, 1933, but the industry had a long road to recovery. In 1934, alcohol giant Schenley Distillers Company purchased the James Pepper Distillery. Schenley was one of the distilleries granted a license to produce during Prohibition, so the company had grown during a time many other distilleries shut down. Schenley Distillers Company was founded by Lewis Solon “Lew” Rosenstiel. Lewis was born to Jewish parents, Solon and Elizabeth Johnson Rosensteil, on Tuesday July 21, 1891 in Cincinnati, Ohio. As a child Lewis attended University School and Franklin Prep. There he played football and had dreams of wanting to be a football player and a physician. His dreams took a dramatic change in 1907 when he was kicked in the face during a football scrimmage. The incident affected his eyesight and he was told by his doctors to stay home from school until he healed. Lewis, however, never returned to school.

With leaving school and deciding not to attend college, Lewis went into the workforce. Lewis found work with his uncle David Johnson, his mother’s brother. David owned Susquemac Distilling Company in Milton, Kentucky. The distillery produced a brand of whiskey known as Richwood. It is likely here at the distillery that Lewis got his first taste of the distilling industry. He worked there until the distillery was forced to shut down due to the start of Prohibition. Like the fate of many distilleries at the time, Susquemac closed its doors and its workers had to find other jobs. Lewis found himself working as a shoe and bond salesman.

In 1922 Lewis took a trip to the French Riviera and while there had a chance encounter with Winston Churchill. The two began talking and Winston told Lewis to be prepared for the end of Prohibition and the growth of liquor sales. Heeding the advice from Winston, the following year, in 1923, Lewis began purchasing closed distilleries. During this time, since so many of these were closed down and had no income, distilleries were able to be purchased at bargain prices. Lewis went on to purchase the Joseph S. Finch Distillery, George T. Stagg Distillery, Squibb Distillery, J.W. Dant Distillery, Cascade Hollow Distillery, Bernheim Distillery, among others.

With the distillery under new ownership and Prohibition in the rear view, the distillery got back to full production. Schenley was one of the very successful companies during Prohibition so it had the resources and jump start above its competition. This helped allow Old Pepper to rise in popularity. By the early 1940’s World War II caused many distilleries to focus their efforts in industrial alcohol production or to cease consumable alcohol production to retain resources. This caused some strain on the company. Schenley had also been rapidly expanding and had many distilleries under their umbrella. After the war the drop in whiskey popularity continued to hurt the distillery and by 1958 Schenley had shut the Old Pepper Distillery down and shifted their focus on other brands in their portfolio.

The distillery and brand lay dormant for many years. Lewis Rosenteil retired in 1968 from Schenley and he sold his shares to Glen Alden Corporation. Just a few years into retirement, in 1971, Lewis had a stroke that left him partially paralyzed. By 1972 Schenley was changing ownership again when it was purchased by Rapid American Corporation, a business started by Meshulam Eiklis. On Wednesday January 21, 1976 Lewis, the businessman behind Schenley, died at Mount Sinai Hospital in Miami Beach, Florida. His funeral was held at Weil Funeral Home in Cincinnati, Ohio.

Schenley was acquired by United Distillers in 1987 and there was a brief effort by the new owners to resurrect the Old Pepper brand, but was ultimately unsuccessful. The brand became forgotten and the trademark abandoned. It wouldn’t be until 2008 when the brand would have some sort of revitalization. Amir Peay, a graduate of University of California Santa Barbara, had earned a degree in philosophy but could not obtain a job in the field. He began bartending in Washington D.C. for the next six years as well as running the Wine & Dine newsletter. He also spent some time being a freelance writer covering mostly boxing. Amir enjoyed learning about history (so he would probably love SippingHistory.com). One day while reading about a boxing match held in 1910 between Jim Jefferies and Jack Johnson he noticed a James E. Pepper banner in a photograph of the match. This piqued his interest in the brand and brought him to learning all about James Pepper.

Amir was able to obtain the abandoned trademark and began sourcing whiskey to sell under the James E. Pepper brand coming primarily from MGP Ingredients in Indiana and Bardstown Bourbon Company in Bardstown, Kentucky. He also began working on reopening James E. Pepper Distillery. At this time it had been abandoned and neglected for fifty years. Amir spent nearly a decade restoring the distillery for operations. In 2017 in the same original distillery that was started by James Pepper, Amir began distilling his own product.

James E. Pepper Distilling Company currently offers 1776 Straight Bourbon bottled at 100 proof (50% alcohol by volume). The bourbon is unfiltered, aged between three to four years and distilled in Indiana or at Bardstown Bourbon Company. The mash bill is made up of 60% corn, 36% rye and 4% malted barley. The bourbon is bottled at the James E. Pepper Distillery and cut down to proof using limestone water. Another offering is 1776 Straight Rye. It is an unfiltered 100 proof rye whiskey made up of 95% rye and 5% malted barley. It is aged between three to four years and is distilled in Indiana. Final bottling and proofing is done at the James E. Pepper distillery. Old Pepper Rye Whiskey is sold in small batches or as single barrels. Distillate sourcing is compiled of their own distillation product, sourced whiskey from Indiana or Bardstown Bourbon Company. Amir also pays tribute to the roots of the distillery by bottling Old Henry Clay Straight Rye Whiskey. It is bottled at 86 proof (43% alcohol by volume) and distilled in Indiana.

Although the James Pepper name and distillery went through a long period of dormancy, the growth of the bourbon industry helped allow for the historic brand to be revitalized. The Pepper brand and family are at the heart of the bourbon industry and it is only right that their story be told and they are not forgotten. Although the majority of products of the newly formed James E. Pepper Distillery are sourced, distillation has now returned where James Pepper himself once distilled. A piece of history is available for us to enjoy today. The next time you pour yourself a glass of James E. Pepper, remember that you are drinking more than what is in your glass, you are sipping history.

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