Magners Cider was a phenomenal, but seemingly short-lived, brand success story. As C&C Group seeks to recover from the boom and bust experience that befell its cider brand, it is looking to its spirits portfolio, and specifically Irish whiskey Tullamore Dew, for growth. And even in these uncertain times, the company is bullish about the opportunities ahead. Chris Mercer reports.

Mention C&C Group these days and the plight of Magners cider over the last 18 months immediately comes to mind. No surprise then that the Irish firm is determined to focus on the positives, and its spirits division appears to be providing just the good news the company needs.

C&C's spirits arm is the quiet, assured performer of the group. It accounts for only around 20% of annual profit, and so to some extent remains dwarfed by the cider division.

Still, flagship whiskey brand Tullamore Dew is growing at 24% year-on-year by volume. Michael McArdle, CEO of C&C International, expects the brand to sell "well above" 650,000 cases this year, with the firm targeting 1m annual case sales by 2012.

Bringing up the rear in the spirits division are Carolans, an Irish cream liqueur, and Frangelico, a hazelnut liqueur originally created by 17th Century monks in Piedmont, northern Italy. There is also Irish Mist, a liqueur based on a traditional Irish recipe and containing a blend of Irish whiskeys with honey and herbs.

Annual volume growth of Carolans and Frangelico is slower than Tullamore, coming in at around 9% and 1-2% respectively.

Given these figures, it is inevitably Tullamore that is generating most excitement at the firm. It sits behind Pernod Ricard's Jameson as the second largest Irish whiskey brand by volume, according to IWSR figures, and is profiting from the growing popularity of Irish whiskey around the world.

Global Irish whiskey sales by volume were growing at 10% year-on-year at the end of 2007, according to IWSR. This compares to a rate of 3.7% for Scotch, although Scotch whisky is of course growing from a much larger base.

C&C launched a new global advertising campaign for Tullamore in October, focusing on the brand's Irish roots, as well as Irish whiskey's smoothness. The group has set aside extra resources for the campaign in markets where Tullamore is already the leading Irish whiskey brand, such as Germany, Sweden, Denmark, Bulgaria and Czech Republic.

Eastern Europe has proved particularly successful, according to McArdle.

McArdle believes Irish whiskey's smoothness gives it "a real competitive edge over Scotch", adding: "For people who are migrating from vodka to whiskey, such as in Central and Eastern Europe, Irish whiskey is more palatable."

Tullamore's other major growth markets are the US, Russia and South Africa. The latter, says McArdle, "is likely to be a very big market for us."

A conversation about the current state of the business would not be complete without talk of the dreaded credit crunch and its potential to wreak havoc with growth plans, however. How is it affecting C&C? Too early to tell, McArdle says, although he believes the answer lies in promoting Tullamore's premium credentials.

"Being caught in the middle is not where you want to be," he says, adding that brand loyalty may play a big role. "There are people who will say that's my brand and I'm going to buy it."

McArdle argues that the credit crunch has put a greater emphasis on distribution. He says Tullamore has been significantly lifted by distribution deals with vodka firm Russian Standard in Russia and a deal with Skyy, owned by Campari, in the US.

C&C also has distribution deals for its spirits brands with Maxxium in four markets - the UK, Germany, Bulgaria and New Zealand. McArdle says C&C plans to stay with the new distribution alliance between Edrington Group and Beam Global Spirits & Wine, which will evolve out of the Maxxium partnership from April 2009.

However, for all the talk of spirits growth, there remains the presence of a planet-sized elephant in the room. Enter Magners, the brand that has both put C&C on the map and, after failing to recapture its initial success in the UK, believed to have hastened the departure of group CEO Maurice Pratt.

Despite a 15% sales decline in the six months to 31 August, McArdle argues that the brand has retained volumes that would have been considered impossible for cider a few years ago.

"We are ambitious for both sides of the business," he says. McArdle sees good international growth opportunities for Magners, which he says has performed well among the ex-pat communities of Spain, while also being launched in the US and Australia.

The next year is likely to see more innovation on the spirits side, says McArdle, hinting that the Tullamore range will be extended further within the next 12 months.