thats just for distillation. the initial mixture of fermented fruits and water, containing up to 16% ethanol is evaporated in the kettle. For the system ethanol/water the ethanol concentration in the vapour is much higher than in the liquid (if you stay well below 97something % ethanol) because of relative volatility, chemical potential and such. that vapour is then condensated in the coil, resulting in a liquid with a higher ethanol concentration.