Pepper Distilling breaks ground on new Woodford warehouse

MIDWAY, Ky. (WTVQ) – A historic distillery that resumed production four years ago after a 50-year break broke ground Thursday on a new warehouse in Midway.

Gov. Andy Beshear joined community and company leaders to break ground on the new James E. Pepper Distilling Co. warehouse as the Lexington-based brand expands following the revival of its historic distillery.

“I’m thrilled to join James E. Pepper Distilling Co. today to break ground on the company’s first warehouse since the brand was reestablished in Central Kentucky,” Beshear said. “This project will help move the company forward and contributes to our thriving bourbon and spirits industry, which has seen significant growth in recent years. This is the start of something special for this company, and it is great to see a well-known brand return to Kentucky.”

The new, 17,800-square-foot warehouse in Midway will be the company’s first, allowing for continued growth of the iconic Pepper brand. Whiskies distilled at the Lexington facility are currently aging in third-party warehouses and are expected to reach the market beginning in 2022.

The company’s branded products include 1776 straight bourbon, 1776 straight rye, Old Pepper single barrel and small batch Henry Clay straight rye whiskies.

“We can’t bottle our whiskey fast enough,” said company owner Amir Peay. “By building our own warehouse, James E. Pepper can double production capacity at the historic distillery. We’re proud of the success we’ve experienced in revitalizing this iconic American brand, and we will have some exciting releases coming out in the near future.”

The Pepper family brand of whiskey dates to 1780, with two distilleries maintained in the commonwealth until 1967, including the Versailles site now occupied by Woodford Reserve.

The company ceased operation with the bourbon industry’s downturn in the 1960s. In 2008, Peay relaunched the brand and in 2017 rebuilt the historic distillery in Lexington’s Distillery District.

The Fayette County facility resumed distilling on Manchester Street with the same recipe used at the time the original company closed 50 years earlier.

In Kentucky, roughly 70 spirits facilities employ more than 5,100 people throughout the commonwealth.

In 2021 alone, Kentucky’s spirits industry has seen 12 new-location or expansion announcements with over $270 million in planned investments and 267 announced full-time jobs.

Woodford County Judge/Executive James Kay said the Pepper project adds to the community’s strong presence in the bourbon industry.

“Woodford County is the bourbon capital of the world, and we give our heartiest welcome to another world-class bourbon distiller in James E. Pepper Distilling Co.,” Judge/Executive Kay said. “No place compares to Woodford County’s support for the jobs and opportunity created by the best crafted bourbon, and we are proud to welcome and support James E. Pepper and its wonderful family of employees to our community.”

Midway Mayor Grayson Vandegrift said the company will be a great fit for the city.

“It’s a truly wonderful day in our city as we welcome another thriving business,” Mayor Vandegrift said. “With our rich distilling history, the renowned James E. Pepper Distilling Co. makes a perfect pour with us here in Midway, Kentucky.”

To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) in June approved James Pepper Distilling for up to $50,000 in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.

By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the new tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.

In addition, James Pepper Distilling can receive resources from the Kentucky Skills Network. Through the Kentucky Skills Network, companies can receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives.