Cognac Oil is a by product from the distillation of Cognac. It is present in cognac to the amount of about 2 mg%. The aromatic substances contained in cognac oil derive partly from the activities of the particular yeast fungus used, partly from the type of grapes fermented. An oil can be obtained by steam distillation of the residue of grape tissue and fungus precipitate after fermentation of the alcoholic beverage. Water distillation is also applied directly to a slurry of the yeast residue in water.