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Cognac, a specific variety of brandy, derives its name from the town of Cognac, France, which, along with the surrounding area, is the only location that produces the Ugni Blanc grapes necessary for production of the liquor. The price of cognac depends on a variety of factors which are legally determined by the use of grades, ranging from Very Special(VS) to Extra Old (XO), with other grades such as Hors d'âge used to indicate age beyond the grade scale. Other factors that affect the price of cognac include the type of grapes used, age, and blend of the liquor.
A beginning step in determining the price of cognac involves the first step of production — the eaux-de-vie. Eaux-de-vie, French for “waters of life,” are white grape wines that serve as the basis of the cognac. In order for the cognac to be considered crus, a name used to descibe cognac made from the best wines, at least 90% of the grapes used to create the eaux-de-vie must be Ugni Blanc, Folle Blanche, or Colombard, with the remaining 10% consisting of any number of different grape blends.
The next step in determining the price of cognac is to identify the blend of eaux-de-vie used to create the liquor. The vast majority of cognac producers use a blend of eaux-de-vie to create a well-rounded flavor, as well as to successfully replicate the same flavor again and again. Since the flavor of a batch of eau-de-vie is specific unto itself, the mâitre de chai, or master taster, of each vineyard is responsible for mixing different eaux-de-vie to achieve a consistent result. Many smaller vineyards that produce their own cognac prefer to use a single mix of eaux-de-vie, allowing for more variance in taste from batch to batch much like a single malt scotch or whiskey.
The final, and arguably the most important element in determining the price of cognac is the grade. The grade of a cognac is determined primarily by the age of the youngest eaux-de-vie included in the blend. Cognac grades consist of three major classifications and five sub-classifications used to further identify the blend. The three major classifications, in order of price point, are as follows: Very Special, Very Special Old Pale, and Extra Old. The eaux-de-vie in each are aged by law for a minimum of two, four, and six years respectively; however, it is not uncommon to see ages up to twenty years in these grades. Of the five sub-classifications, the most notable is the Hors d'âge, which by law is equivalent to Extra Old, but is used by many producers to signify a cognac of age beyond the official age scale.