(Shortened from Brandywine, dutch translation "burnt wine")
So what is it?
Brandy is distilled from the fermented juice of grapes or other fruit.
So it's wine?
It is wine. SINCE wine is the fermented juice of grapes, BUT then they distill the wine to produce brandy.
Distilling?
I'll let wikipedia handle this one.
"Wine with an alcohol concentration of 8% to 12% ABV (16 to 24 US proof) and high acidity is boiled in a pot still. Vapours of alcohol, water, and numerous aromatic components rise and are collected in a condenser coil, where they become a liquid again. Because alcohol and the aromatic components vaporise at a lower temperature than water, the concentration of alcohol in the condensed liquid (the distillate) is higher than in the original wine."
So it's got more alcohol in it than wine does and they repeat this process over a few times until distillation yields a product whose alcoholic content is approximately 140 proof. This is known as the "heart" and is the distillation you imbibe and enjoy after it's aging process in a barrel. Neat.
So what's the difference between Brandy and Cognac?
There isn't one, in that Cognac is a variety of Brandy. Let me explain:
Brandy, much like wine, is categorized by the region in which the grape grew or by the other fruit it was made with.
A brandy made from grapes in the U.S.A. is called "American Brandy". A brandy made from grapes in the specific region of Cognac, France is called "Cognac". A brandy made from cherries anywhere in the world is called "Kirshwasser" or simply "Kirsh". Got it? Cool.
Remember, brandy, like wine can be made from any fruit or other things like rice and honey.
For a fuller list of different brandies, see below.
Notes on Cognac
-Cognac, pronounced CON-YAK, is the benchmark by which all other brandy is judged.
-It is made from only 3 grapes.
(Ugni Blanc, Folle Blanche, and Colombard)-These are varietals of grapes.
-It is distilled slowly in pot stills and then aged for a minimum of 2 years in French Limousin oak barrels. (These are oak trees that were grown in the Limousin Forest)
Now you've probably been at your local Jewel-Osco, Ralph's, Marsh's, Safeway, etc. and seen some huge letters on brandy and cognac bottles exclaiming, V.S. or V.S.O.P. and your asking what does it mean and what's the best? I'll tell you.
V.S. : stands for Very Superior, and is used to describe brandy aged for at least 3 years.
V.S.O.P. : stand for Very Superior Old Pale. These brandies are aged in oak for at least 4.5 years.
X.O. : stands for Extra Old and refers to brandy aged in oak for at least 6.5 years.
Napoleon : a grade equal to X.O. in terms of minimum age, but it is generally marketed in-between V.S.O.P. and X.O.

You want other suggestions? Go see a bartender.
List of Different Brandies
AMERICAN BRANDY made from TABLE and WINE GRAPES in the USA
ARMAGNAC made from GRAPES in FRANCE
BRANDY DE JEREZ made from GRAPES in SPAIN
CALVADOS made from APPLES in FRANCE
COGNAC made from GRAPES in FRANCE
FRAMBOISE made from RASPBERRIES in FRANCE
GRAPPA made from GRAPE POMACE in ITALY
KIRSH/KIRSHWASSER made from CHERRIES in FRANCE/USA
MARC made from GRAPE POMACE in FRANCE
METAXA made from GRAPES AND MUSCAT WINE in GREECE
PISCO made from GRAPES(MUSCAT) in CHILE/PERU
POIRE made from PEARS in FRANCE/USA
SLIVOVITZ made from PLUMS in CROATIA/CZECH REPUBLIC
BRAN'NU made from Brandy Norwood on THE UPN.
Imbibe responsibly.
Go ask your bartender. Classic.
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