James E. Pepper Distillery played a key role in Lexington’s bourbon legacy

Editor’s Note: As Lexington celebrates the 250th anniversary of its founding, the Herald-Leader and kentucky.com each day throughout 2025 will share interesting facts about our hometown. Compiled by Liz Carey, all are notable moments in the city’s history - some funny, some sad, others heartbreaking or celebratory, and some just downright strange.

April 28, 1934 — Before there was the Distillery District, the area on Manchester Street just northwest of downtown Lexington was blanked with actual distilleries.

Starting in the 1860s, the first distillery on the site was the Henry Clay Distillery. Located on Old Frankfort Pike (Manchester Street now) along the bank of Town Branch Creek, the distillery was owned by Headley and Farra Company.

In 1871, a fire destroyed the distillery and effectively put an end to it. For a short period, the property was a pork processing plant.

In 1879, James Pepper Distillery bought the property and started work on a new distillery. Col. James Pepper said it was the largest and most technologically advanced whiskey distillery in the country at the time. Over the next 20 years, the distillery grew to six warehouses capable of storing nearly 50,000 barrels of whiskey.

Col. Pepper continued operating the distillery until his death on Christmas Eve in 1906.

Pepper was a larger-than-life figure in the history of bourbon in central Kentucky. The third generation of Peppers to produce “Old Pepper” whiskey, he pushed the boundaries of the industry.

In 1890, he successfully lobbied the legislature to change laws so that distilleries could bottle their own whiskey. As a sign of quality, he invented the strip seal we’re all familiar with now.

The strip, with his signature on it, applied across the cork, allowed him to find and prosecute counterfeiters who would refill empty bottles with whiskeys of lesser quality. That strip was instrumental in getting the first consumer protection law passed — the “Bottled in Bond Act of 1897.”

It assured buyers that the whiskey in the bottle was produced by who the bottle said it was produced by.

In 1933, the James E. Pepper Distillery was sold to the Schenley Products Corp. Just a year later, several buildings on the site burned to the ground in a massive fire. The fire drew in news reporters from all over the country.

It also drew a little attention from insurance companies. Investigations started almost immediately after the fire to determine whether it had been intentionally set.

Still, by August 1934, work had begun to rebuild the distillery. Whiskey continued to be made on site until 1962, and the company used the facility for storage until 1976. Schenley Products sold the property in 1977, and it sat abandoned until the City of Lexington took steps to redevelop the area into the Distillery District.

The area is now home to Ethereal Brewing, The Burl, Crank & Boom Craft Ice Cream, Goodfellas Pizza, among others, and, of course, the latest iteration of the James E. Pepper Distillery.

Have a question or story idea related to Lexington’s 250-year history? Let us know at 250LexKy@gmail.com