Cognac is a grape brandy from the eponymous French region situated just north of Bordeaux. The permitted grape varieties include Ugni Blanc (predominantly), Folle Blanche and Colombard. The rules governing its production state that Cognac must be distilled twice in traditionally shaped Charentais copper pot stills and aged for at least 2 years in French oak barrels.
The indication of age on the label reflects that of the youngest spirit used in the blend. Some of the more commonly seen age terms are: VS (at least two years in cask), VSOP - Very Superior Old Pale (at least 4 years) XO or Napoléon or Hors d'Age (at least six years).
In reality, most Cognac is aged for considerably longer than these legal minimums.