Sake (Young) is much like a Awkward Potion, It has no effects on the player when drunk, unless it is processed in a Fermentation Barrel. The Barrel, much like a Brewing Stand, combines the Sake with the proper ingredient(nether wart) to brew make a fermented pot. To further the process would create a "Potent" or "Extended" pot as well.
Combine water and rice in the Brewing Kettle to make Rice Water, Then Put It Back In The Kettle With A Mushroom To Make Young Sake.
Sake (Young) is used to craft the follow via Fermentation Barrel.