Black-owned distilleries take on barriers to Kentucky bourbon industry

As a young Black man, Yarbrough was outside the drink’s gravitational pull.

What he remembers being marketed in his part of town was Colt 45 malt liquor and bottles of the Canadian whiskey Crown Royal that came in soft purple fabric bags.

“Bourbon was considered a premium product — and I’m not sure that a premium product was necessarily marketed toward African Americans,” Yarbrough said.

Two decades later, in a tiled room in a small commercial building a five-minute drive from the distilleries of bourbon giants Brown-Forman and Heaven Hill, Yarbrough and his two brothers are claiming their own place in the spirit’s 200-year history in Kentucky. They are producing bourbon in a distillery owned and operated by African Americans.

Brough Brothers Distillery — and another Black-owned bourbon brand, Fresh Bourbon, that is planning a distillery in Lexington — are challenging a history of enslavement and exclusion surrounding the most quintessentially American spirit in its Kentucky birthplace.

Their entry comes at a time when the American distilling world is under increasing pressure to diversify and to acknowledge the role of enslaved people in developing the industry.

While the number of craft distillers in the country jumped from fewer than 200 in 2010 to more than 2,200 in 2020, there are still “only a handful” owned by African Americans, said Margie Lehrman, chief executive officer of the American Craft Spirits Association.

In Kentucky bourbon is a big deal: an $8.6 billion industry that employs 20,000 and has attracted investment from multinational corporations like the British alcohol company Diageo and the Japanese Suntory.

Contrary to a popular misconception, bourbon does not have to be produced in Kentucky (although the state is where the spirit was born and is where 95 percent of all bourbon is made). To be bourbon, a spirit must be produced in the United States, come from a grain mixture that is at least half corn and be aged in charred oak barrels.

The drink occupies a central role in the Bluegrass State’s identity and tourism economy. It appears on local restaurant menus both as a drink and incorporated into dishes. The charred oak barrels it is aged in are turned into furniture and portrayed on banners hanging from streetlights in downtown Louisville.

But the story of bourbon is also fraught with racism. The labor of enslaved people was used in whiskey production in the late 18th and 19th centuries, from the cultivation of corn to the making of barrels and at times distilling the spirit.

Virginia-born entrepreneur Elijah Craig, dubiously credited by the industry as “the Father of Bourbon” in Kentucky and whose name is now a flagship brand of one major distillery, was an enslaver, as were other early bourbon makers.

After emancipation, bourbon brands regularly used racist tropes in advertising. Rebel Yell, named after the battle cry of Confederate soldiers, rebranded quietly only last year simply as Rebel. Its bottles featured Confederate imagery until almost a decade ago and previously referenced the Confederacy’s “great victory at Chickamauga” in the Civil War.

(Luxco, the privately owned firm which produces the bourbon in Bardstown, Ky., declined to comment.)

And, as is the case with many American industries, African Americans were excluded from ownership and high-ranking positions.

It was not until Yarbrough was in his late 20s working in finance in London when he finally started drinking and appreciating Kentucky bourbon. Yarbrough saw the spirit’s growing popularity and sensed a potential business opportunity, setting up an import-export company to bring English ciders to the U.S. and bourbon and moonshine the other way.

As he built a distribution network overseas, he dreamed of one day opening up a brewery or distillery back home and selling his product abroad.

In 2018, Yarbrough and his brothers Christian and Bryson acquired a property in the West End, away from Louisville’s touristy Whiskey Row. They began distilling in December and plan to open to the public in April.

The sharp racial inequities facing the West End — which has high rates of poverty and unemployment — have been highlighted by the social justice protests that followed the police killing of Breonna Taylor, a 26-year-old Black emergency room technician who was shot in her South Louisville apartment in March 2020.

In establishing the distillery in the West End, Yarbrough said he hopes to help stimulate economic opportunity.

“It’s one of those things where you want to be able to bring back economic activities for the West End,” said Yarbrough. “In the ’80s and ’90s a lot of the factories moved out, so you don’t have the same level of job opportunities.”

For now, the 2,200-square-foot Brough Brothers distillery — which is located on a road still called Dixie Highway — is a modest endeavor. Plastic drums holding bubbling yellow fermenting mash are tucked behind a tarp, with a space heater on the floor helping keep their temperature high.

While large distilleries have mammoth stills that would fill Brough Brothers’ distilling room and push well past its ceiling, its small copper still stands just 7½ feet tall. A tasting room has space for a few bar stools, and Yarbrough is brainstorming how to make the visitor experience work under social distancing conditions.

The distillery is producing about 15 gallons a week, though the brothers anticipate ramping up to 50 gallons, which is probably the maximum volume the facility can handle. In the distilling world, both production figures are considered quite small. However, Yarbrough said they want to expand in the future.

In Kentucky’s second-largest city, Lexington, Sean and Tia Edwards are planning a distillery on a different scale: A multimillion-dollar, 34,000-square-foot distillery that would create 25 jobs and eventually produce upward of half a million gallons of bourb
on annually.

Sean, an entrepreneur who owns a construction company and dry cleaner, was introduced to the liquor business at a young age: His grandfather and uncle worked as bootleggers, selling booze on Sundays to skirt a blue law.

“I helped, you know, fill up the bottles and small stuff like that,” he said. “Part of my growing up and my history was what if my granddad, you know, had a distillery instead of bootlegging? What if he had the opportunity to do something like that as opposed to having to go the other route?”

“The opportunity wasn’t there back in those days like it is now,” said Tia. “I feel like what we’re doing is paving the way for other entrepreneurs coming up. We come from humble beginnings, our families didn’t have hundreds of thousands of dollars, we had to work hard for what we have.”

Traveling abroad with his wife for annual trips to mark their anniversary, Sean said, people would know three things when he told them they were from Kentucky: horses, Kentucky Fried Chicken and bourbon.

“The order depends on the country you’re in,” he said.

But the recognition got them thinking that bourbon was a viable business opportunity. Soon they were thinking of how they could get into the industry.

The result was Fresh Bourbon. The Edwardses said they are producing bourbon under the direction of a Black master distiller at Hartfield & Co. distillery. They plan to have bottles on retail shelves later this year.

There is a dispute between Fresh and Brough Brothers, with both claiming to have the first Black-owned distillery in Kentucky.

Fresh leans on a 2020 Kentucky Senate resolution that recognized it as the first Black-owned distillery in the state, despite Fresh not having built a distillery yet.

Brough Brothers is registered with the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau — which is required to operate as a distillery — while Fresh has not. In early March, Brough Brothers sued Fresh over what it says is false advertising and unfair competition.

In a statement, Sean Edwards said Fresh continued to “stand behind everything we have said about our business, our bourbon, and the designation the Kentucky Senate has honored us with.”)

The Edwardses are building their distillery with an eye to attracting tourists. Sean says under his wife’s influence, the distillery’s style will differentiate itself from others by being “probably a lot less wood and a little more crystals.”

For both sets of bourbon pioneers, the pandemic has derailed plans.

Fresh announced their plans for a $5.4 million distillery in February last year, only to watch the country shut down a little over a month later. Investors started to drop off as Americans braced for an economic crisis.

Some investors have trickled back. “But some of them, they haven’t recovered,” said Sean Edwards. “They were in the restaurant business and some of them were entertainers and they still haven’t recovered. So they’re off the table.”

Fresh is now targeting a distillery opening in late 2022 and hopes to break ground this summer.

Even in the best of times, the spirits association’s Lehrman calls the barriers to entry for distilling “just incredibly, incredibly high,” often requiring $1 million to $3 million in start-up costs.

Making bourbon presents an additional challenge: the long years of aging in charred oak barrels. To establish their brand, many young distilleries (Brough Brothers included) initially “source” their product — buy bourbon from an established distillery and rebrand it as their own while the liquor they have produced ages.

That means people who get into bourbon often have generational wealth or can easily obtain credit — barriers that disproportionately cut out African Americans.

“Distilling is an expensive and costly business to get into. And historically when you look at diverse populations in the United States, there are issues with getting access to loans and good interest rates and having wealth that passes down from generation to generation,” said Jessica Pendergrass, former chairwoman of the Kentucky Distillers’ Association and chief compliance officer at Heaven Hill Distilleries. “And so when you look at something like distilling, and in particular American whiskey distilling, a lot of that does pass from generation to generation.”

Chris Montana, the Minneapolis lawyer who in 2013 opened Du Nord Craft Spirits, the first Black-owned distillery in the country making vodka, gin, whiskey and liqueurs, said he found it difficult to raise capital, despite appearing to be a good candidate.

“I have all the paper that should suggest that I’m a hard worker and all of that. I couldn’t raise the money. All I could get was 60 grand from a nonprofit. That’s it,” he said. “At the same time that I was starting, people were raising millions. And they didn’t have any more qualifications than I did.”

Also standing in the way, said Montana, is the lack of examples of Black people in distilling. “If you have no examples in front of you and you’re that chemistry student or business major in college, it’s not even on your radar screen to go into distilling because you don’t see yourself in it,” he said.

Montana recalled walking into an American Craft Spirits Association convention in 2016 and noticing that out of 1,000 people gathered, he appeared to be the only Black person.

“It was a wake-up call for me,” he said. “I was not prepared to be the one.”

In Kentucky, efforts are underway to bring greater diversity to the bourbon industry.

Louisville-based Brown-Forman, which owns Jack Daniel’s Tennessee whiskey, recognized Nathan “Nearest” Green, an enslaved person, as its first master distiller and the person who taught Jack Daniel how to m
ake spirits.

Brown-Forman has also committed to a goal of having people of color in at least 25 percent of its manager positions by 2030.

A scholarship program announced by the Kentucky Distillers’ Association last year will fund the tuition of 10 full-time students in distillery industry programs at the University of Louisville and the University of Kentucky.

Pendergrass said the group would also fund scholarships for three full-time students at Kentucky State University, a historically Black college in Frankfort that began a fermentation and distillation sciences program in 2019.

“But there’s a long ways to go,” said Kirk Pomper, dean of Kentucky State University’s College of Agriculture, which oversees the Kentucky State University’s distillation sciences program. “Those companies are lacking diversity at this point, and they do recognize that.”

Fred Minnick, the author of Bourbon: The Rise, Fall, and Rebirth of an American Whiskey, said while “there’s never been much of an effort to improve diversity” at higher levels in the bourbon industry “change has been coming in the last five years.”

To Jamar Mack, the founder of the Kentucky Original Black Bourbon Enthusiasts, there is also work to be done to make bourbon’s culture and industry more welcoming to African Americans.

“I never went to a bourbon event and felt not welcome,” he said. “But those events were clearly not marketed toward people like me.”

Black bourbon enthusiasts like Mack have become better known in the bourbon world in recent years with the spread of African American bourbon clubs. But to Mack, that shows not so much a growing interest in bourbon but a reflection of an atmosphere that excluded African Americans.

“They didn’t just start drinking bourbon two years ago, people,” he said.

While some brands are making earnest efforts to welcome a more diverse group of enthusiasts, “there are a couple other brands where it becomes very obvious: I only want you in February, and I only want you because we couldn’t get any people of color at this dinner. And that’s happened to us a couple of times,” Mack said.

There are indications that African Americans who buy bourbon are spending more money on the spirit: According to marketing research firm Nielsen, while African Americans made up just 9.4 percent of bourbon buyers, their average spending on bourbon went up more than 37 percent in 2020, the highest increase of any demographic group.

But for bourbon to have a better relationship with African Americans, Erin Gilliam, an associate professor of history at Kentucky State University who has researched the role enslaved people played in bourbon’s production, said companies need to reckon with their uncomfortable origins.

“I would have companies spend what they would spend on marketing on uncovering the history, even if it means that it’s not going to be as pretty as the story they might have out now,” she said.

“That’s going to take dollars. That’s going to take research. That’s going to take the ugliness of history.”