Grappa is one of Italy's most popular alcoholic drinks, with somewhere in the region of forty million bottles of grappa being produced every year. It's also a very Italian drink; since 1989 the name has been protected by the EU, meaning that the drink can only be called grappa if it's sourced and produced in Italy.
The main ingredient of grappa is pomace, which consists of the grape skins, seeds and stalks that are left over from the wine making process. These are taken through a second process of distillation, which extracts the remaining flavors from the pomace before the waste is discarded. The grappa is then either bottled at once, which creates white grappa (grappa bianca), or aged in wooden casks to create the yellow or brown-hued grappa known as riserva.

Grappa can either be made from a mixture of pomaces from different sources, or from one grape variety. If at least 85% of the pomace comes from a single variety, the grappa can be designated di vitigno or varietale, and the type of grape can be incorporated into the name of the drink. Examples of this include Po' Merlot di Poli and Po' Pinot di Poli from the Poli distillery and Francoli's Barbera and Moscato grappas. However, the best wines don't always produce the best grappa; as the grappa is made from the leftovers of the winemaking process, the more the wine takes out of the pomace, the less remains for the grappa.
Grappa is a wonderful way to end a meal, drunk either as a shot on its own or added to an espresso (in which case it's known in Italy as a caffè coretto, or a "corrected coffee"). The Instituto Nazionale Grappa, the body that represents most of the grappa producers in Italy, recommends serving shots in small tulip-shaped glasses with open rims, rather than balloons or narrow glasses.

For those that find it has too "harsh" a flavor, I have heard it suggested that you can mix it with a little bit of ice and  pomegranate/blood orange/tart fruit juice. (Although I personally recommend drinking it neat or chilled.)

Article by RomeFile