The world market for cognac is hundreds of millions of bottles but because cognac can only be made once a year, after the grape harvest, the amount that can be sold is limited to how much can be made. The situation is made yet more difficult as even the very youngest cognac has to be aged for 3 years in oak barrels before it can be sold. The big cognac houses supply over 80% of world sales but probably only have direct involvement in about 5% of production. They rely heavily on the thousands of individual producers to provide enough cognac for their markets. Blending them provides consistent flavour and is therefore critical to their survival.
The big cognac names try to assert their authority over the smaller producers, by influencing their distillation methods, with varying levels of success. By blending hundreds, or indeed thousands, of different cognacs together any of the individual craft and style, which has been developed over the generations of distillation, is lost and the flavour becomes neutral. Indeed neutrality is encouraged by the major blenders since it is easier to blend neutral spirits than those with complex flavours. There is though, another factor that changes flavour and that is ageing. By buying their cognacs young and ageing them in their own cellars, the big houses are able to control any variation in style and flavour that may occur.
Most of the young cognacs sold to the major blenders will be at near distillation strength (67-72%); reduction in strength is therefore necessary. To enable this distilled water is gradually added, a slow process that can take many years to perform successfully. Additionally, because these cognacs are so young they will not have developed much colour or taste from the barrels and worst still, they will be aggressive and very fiery. All these problems can only be addressed with the permitted addition of sugar syrups and caramel.
The blending process should take years but to meet market demand it is often accelerated. Blending also fails to promote individuality in the final product. As a consequence, Hermitage Single Estate Cognacs, with age statements, offer a wide variety of styles, flavours and individuality with which blended cognacs cannot compete.
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