During the 17th century, the people of Cognac, the Cognaçais, began the process of double distillation, which allowed the concentrated alcohol to travel in the safer and the more economical conditions. Initially, this alcohol was to be diluted immediately upon arrival. However, it is merely by chance that the Cognaçais discovered that the alcohol improved with time and contact with the oak barrels in which it was stored. Soon enough, they began to drink it straight from the barrels. The name given to the new product was Cognac.
At the center of this 200 000-acre delimited area lies the town of Cognac. Surrounding the town and are six different viticultural areas, or crus, with each enjoying a specific climate and soil that produces different and complementary qualities of the spirit. For example, Cognac loses its sharpness and gains body as the production moves further from the center. The blending of these distinct qualities gives each Cognac its individual character and taste.
The secret of Cognac lies in the soil. Although the soil produces a wine that is not particularly good, it is nonetheless ideal for distillation. The soil itself is extremely diverse, ranging from open country chalky soils, to plains with red clay earth, to green valleys. Quality variations in the soil are based on the amount of chalk present, the hardness of the chalk, and the amount of clay mixed in with the chalk. For example, more chalk in the soil increases its quality; the softer the chalk, the better; and the less clay in the soil, the better its quality. Chalk in the soil is important because it retains humidity (moisture). Also, the chalk-flecked soil reflects light and so helps to ripen the grapes. Grand Champagne has the softest chalk and the least clay; therefore, it is considered the best soil and produces the highest quality Cognacs.
The Process of Making Cognac
Pressing and Fermentation
The process of double distillation has two steps (of course!). In the first stage, the first distillate is obtained, known as the ‘brouillis,’ which contains an alcohol level of 28% to 32% volume. The ‘brouillis’ (which is a cloudy liquid) is obtained by boiling the unfiltered wine, and then having the alcoholic vapors pass through the swan neck to finally condense when they come in contact with the cool air in the coolant or ‘the pipe.’ The entire first heating, or the first ‘chauffe’ lasts between 8 and 10 hours.
During the second stage, the ‘brouillis’ is returned back to the boiler for a second heating known as the ‘la bonne chauffe.’ It is during this second heating that the eau-de-vie, or the spirit, is finally extracted from the liquid. Here, the distiller performs a delicate process called ‘cutting’ by separating the ‘heart’ from the ‘heads’ and the ‘tails.’ During the process, the vapors that arrive first (the heads) have too high of an alcohol content, and so they are cut off and separated from the rest of the liquid. The next batch of liquid is the ‘heart,’ or a colorless liquid with a 70% alcohol per volume. The great task of the distiller is to keep only the heart of the second distillation, which ensures that only the purest spirit will be used to make Cognac. The ‘tails’ are then cut off as well because their alcohol content is too small. Ultimately, the heads and the tails will be ‘redistilled’ in a subsequent batch. The entire process lasts approximately 12 hours.
The aging process takes place entirely in these oak casks, which are then stored in dark cellars, called ‘chais’, where the Cognac will mature for at least two years. The dryness or dampness of an individual producer's chais will effect the characteristics of the eau-de vie as it matures. In reality, producers move casks “around the chai or from one chai to another as the spirit develops in order to promote the optimum development of aroma and flavor.”
One of the crucial phases of the aging process is called extraction, during which the wood transfers its tannin to the newly distilled colorless spirit, thus naturally giving it its characteristic amber color. The Tronçais tannins are particularly smooth, whereas the Limousin wood is prized for the strength and balance it imparts to the Cognac.
Furthermore, the oak wood, because it is porous, allows for a permanent yet indirect contact between the Cognac and the surrounding air in the cellar where the casks are stored. Consequently, Cognac will lose some of its alcoholic content due to evaporation (about 3%). This evaporation leaves a dark hallow over the walls of the cellar, which has been dubbed The Angels’ Share. A microscopic fungus called torula compniacensis Richon develops due to the mixture of the humid air and the evaporated alcohol. Interestingly, these ‘Angels’ drink approximately twenty million bottles of evaporated Cogac each year, making them the second largest market for the sprit after the United States!
Lastly, it must be noted that while the legal ‘age limit’ on Cognac is two years, in reality most of the Cognacs are aged for much longer (up to fifty years or more) in order to increase the quality of the spirit.
Remy Martin, one of the more recognized Cognac houses, describes their Master Blender’s delicate work in quite some detail: "The Cellar Master begins his art. He fills his glass one-third full, leaving room for the aromas to develop. Then he uses his nose to test its vintage and bouquet. He takes a little in his mouth to try its body and mellowness. His senses awaken one by one as he continues the ritual. Unconsciously, he closes his eyes as he sniffs. As his eyes open, he focuses on the color of the Cognac. This is the moment when the Cellar Master decides what will be used in the final blend."
The blending is one factor that determines the ‘value’ of a Cognac, which is in turn identified by the Cognac label. The age of the Cognac shown on the label matches the youngest Cognac used in the blend.
As Cognac ages, it gains its distinctive amber color. This diagram shows the colors as they correspond both with the age and the label of the spirit.
Scotch: The Culture of the World's Leading Spirit
Milica Koscica, April 2004
Cognac’s name is fiercely guarded and protected on multiple levels. For instance, the Cognac Appellation of Origin (A.O.C.) is a geographical indication recognized both under the French law and the European Union Council Regulation (EC) 1576/89. Furthermore, Cognac A.O.C. fulfills the requirements under Article 23 of the Agreement of Trade Related Aspects of Intellectual Property (TRIPS) of the World Trade Organization (WTO). Article 23 of TRIPS states that each member of the WTO has the obligation to protect the geographical indication of wines and spirits by preventing the use of a name for a spirit if that spirit does not originate from the location indicated by the geographical indication. Article 23 is ruthless in terms of protection because it states that a geographic indication cannot be used even in translation or if it is accompanied by “expressions such as ‘kind,’ ‘type,’ ‘style,’ and ‘imitation.” To be sure, the Cognac industry has done everything in its power to make sure that the members of the WTO abide by the rules and protect Cognac from imitations and homonyms.
The effort to protect Cognac came as a result of trade disputes over a variety of spirits that are collectively called conhaque in Brazil. The Brazilian conhaque market currently consists of both wine based spirits, including Cognac (0.09%), and sugar cane based spirits (90%). According to the EU, the Brazilian conhaque drinks are lower in standards and quality than Cognac, and therefore they damage the reputation and confuse the consumers as to what the term ‘Cognac’ really means. For instance, in contrast to Cognac, there are no specific standards on the production or the aging process for the variety of spirits that collectively fall under the term conhaque.
Because these spirits can be made at a much lower cost, they can also be sold for less, and according to BNIC, if the consumer must choose between a relatively expensive French Cognac and the cheaper conhaque, he or she will opt for the less expensive drink without ever knowing the difference in quality. This in fact has had an enormous negative affect on Cognac sales in Brazil. Additionally, the EU claims that the exports of generic conhaque threaten the marketing and sales of Cognac in developing markets around the globe, such as India and Russia, where Cognac’s reputation has not yet been established. BNIC claims that the Brazilian lack of protection of the appellation of origin for Cognac violates Article 23 of the TRIPS and Article 12(2) of the 1992 EC-Brazil Framework Agreement (a contract where both sides agreed to respect each other’s intellectual property rights, including geographical indications and appellations of origin).
In the case of Cognac, the Commission investigation confirmed the lack of protection of Cognac’s A.O.C., and therefore initiated bilateral talks with Brazil that ended positively.
Discourse and Status: Disagreement and
10. Sub National Factors: Yes. Cognac, France.
11. Type of Habitat: Temperate
**Figures relative to Cognac trade are mostly expressed in hectoliters of pure alcohol. To make the understanding easier, figures and graphs relative to the shipments of Cognac will be expressed in millions of bottles, where 360 bottles equal one hectoliter of alcohol. In 2003, 127.3 million bottles of Cognac were shipped worldwide, which amounted to some €1.2 billion Euros in revenue. The key exporter of Cognac was France, and the key importer was the United States. **
Since all Cognac should theoretically originate from the town of Cognac, France, the French are understandably the largest exporter of the spirit. In 2003, France sold 127.3 million of bottles of Cognac, where 6.5 million were sold at home and the rest were shipped to foreign markets. Essentially, 94.9% of Cognac was exported, which contributed approximately €1.2 billion Euros ($1.5 billion USD) to the annual trade surplus in France. Since Cognac’s main markets are outside of France, geographic indication plays a vital role in protecting Cognac quality and reputation in these foreign markets. Without geographic indications, Cognac might lose market share to cheap imitation Cognacs in different countries, and therefore Cognac producers back in France might lose the greatest source of their revenue. Currently, according to BNIC, the Cognac industry in Cognac, France, employs directly 21,000 people, and more than 55,000 people are indirectly involved either through the botteling, labeling, cork, carbord, and insurance industries.
In terms of geographic distribution, the three main markets for Cognac in 2003 were North America (42% of sales), Europe (40% of sales), and Asia (18% of sales). More specifically, the largest importer of the spirit was the United States, with 49.1 million bottles of Cognac imported from France. Cognac sales in the US have nearly tripled since 1993, and the US has remained the top Cognac importer for the past ten years (Figure 1). The US market brought in approximately €530 million (USD $653 million) in revenue to France in 2003.
United States Cognac sales in the last ten years
Interestingly enough, one of the reasons for this momentum is Cognac’s new and fast-expanding market in the mainstream Hip-Hop urban culture. Different types of Cognac brands, including Remy Martin, Hennessy, and Courvoisier, have been benefiting from exposure in pop-hit music videos with rap stars like Eminem, Busta Rhymes, and others. To traditional Cognac connoisseurs, Cognac’s new hip-hop image was shocking, but the phenomenon was welcomed because it ultimately helped resurrect the Cognac industry after the devastating Asian economic crises in 1997.
As a luxury good, Cognac is sensitive to fluctuation in the global economic environment, and it is often the first to suffer from a lower household consumption in times of economic downturns (Figure 2). Cognac trade also experienced a marked low in sales in 2001, which resulted from the September 11 terrorist attacks in the United States. September's dramatic events provoked fears for the American market as well as for airport and travel related sales. However, over the past two years, Cognac trade figures have improved significantly. The initial alarm over the possible negative effects in the US market proved to be exaggerated since Cognac consumption in the US has steadily increased since 2001.
Worldwide Sales in the last ten years
Figure 2 traces the evolution of the worldwide Cognac sales over the past ten years. It shows Cognac’s sensitivity to global economic forces. The 1997 Asian crisis and the 2001 terrorist attacks correspond with lower sales of Cognac in two of its most important markets.
12. Type of Measure: Intellectual Property
13. Direct v. Indirect Impacts: Indirect
14. Relation of Trade Measure to Environmental Impact
a. Directly Related to Product: Yes,
15. Trade Product Identification: Cognac
16. Economic Data
17. Impact of Trade Restriction: None
18. Industry Sector: Food, Wines and Spirits
19. Exporters and Importers: France and Many
The Cognac industry is integrally linked to the environment where the spirit is created. Factors such as the location, the microclimate, the unique soil, and even the trees growing in the delimited area all contribute to the spirit’s taste, production and trade. Cognac producers are heavily influenced by the changes in the ecosystem, as was illustrated in late 1800s by the emergence of the phylloxera fungus that spread throughout the region nearly destroying the vineyards. Today, even though producers boast of tradition and stable climatic conditions, it is difficult to imagine that Cognac’s delimited area and special climate will be left unscathed by the changing environmental trends such as global warming. The impact of global warming on the production of Cognac poses a future concern that will need to be addressed by the next generation of Cognac producers. Right now, however, it is important to demonstrate how the region’s environment is involved in the production of the spirit.
However, the problem of climate change is not only ecological - it can also have drastic impact on the local culture. Jones claims that in the next 20 to 30 years some vineyards will be forced to replace their traditional grape varieties or change management strategies. The impact on culture and identity stemming from such changes is significant. "There is a huge historical and cultural identity associated with wine producing regions. A region known for a superb Merlot, for instance, might need to shift to another kind of grape, changing the cultural identity that has developed over centuries,” asserts Jones.
Even though Cognac is not wine, it nonetheless depends on the climate and on the grapes from which it is made. Cognac producers pride themselves on tradition and quality of their grapes that have remained stable for many generations. The change in climate and the possible effects on the Cognac grapes, soil, and even aging methods poses a formidable challenge to the next generation of producers.
20. Environmental Problem Type: Culture
Name, Type, and Diversity of Species
22. Resource Impact and Effect: High and Product
23. Urgency and Lifetime: Low and 100s of Years
24. Substitutes: Like Products
25. Culture: Yes
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4. Chery, Carl. “Daily Hip-Hop News: Hip-Hop Saves the Cognac Liquor Industry.” July 18, 2003. http://www.sohh.com/thewire/read.php?contentID=4858
5. European Commission. “TBR Proceedings Concerning Brazilian Practices Affecting Trade in Cognac.” Brussels, 18 Dec.1997.
6. European Commission. “Trade Barriers Regulation: The First Five Years.” http://www.mcx.es/sgcomex/Polaran/documentos/first5years.PDF
7. European Commission. “WTO talks: EU steps up bid for better protection of regional quality products.” IP/03/1178. Brussels, 28 Aug. 2003.
8. European Commission: “Intellectual Property: Why Geographical Indications matter to us?” Brussels, 30 July 2003. http://europa.eu.int/comm/trade/issues/sectoral/intell_property/argu_en.htm
9. European Commission:
“Trade Barriers Regulation: What is TBR?” Brussels, Sept.
10. Graafsma, Folkert, and Sofia Alves. “International Trade Developments, Including Commercial Defence Actions XIII: 1 January 1997 – 31 June 1997.” http://www.ejil.org/journal/Vol9/No2/sr1.rtf
11. Gugino, Sam.
“Cognac: Though Purists May Shudder, France's Premier Brandy Mixes
with the Cocktail Crowd.” The Cigar Aficionado Online. (Sept/Oct
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“Don’t call it Cognac.” The Atlantic Monthly. (Dec
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