David Phelan's kitchen was the unlikely birthplace for Coole Swan, the Irish cream liqueur that turned over €750,000 last year.

Managing director Phelan and his partners, David Gluckman and Adrian Walker, examined the drinks market and decided there was room for another competitor in the cream liqueur space.

"The Irish cream category is a very large category dominated by one international, very successful player. But everybody else in that category offers a value alternative. It's a 13 million-case category. Could we construct a brand that had equal international potential?" Phelan said.

Phelan had form in the area, having worked with brands such as Carolans Irish Cream and Irish Mist for C&C International before working at director level for IDV/Diageo, where he helped to grow the Baileys brand internationally.

Gluckman had helped develop the original Kerrygold and Baileys brands while Walker worked on brands such as Tanqueray Ten, Ciroc Vodka and Bombay Sapphire.

Enterprise Ireland invested in the firm as a high-potential start-up in 2007. Coole Swan also sought angel investment: SadlierReilly offered funding early in 2007 and has been there from the beginning.

The process of creating a premium brand was technical and required a team of experts. Product positioning in terms of quality was a key focus. Walker headed product development, with the help of manufacturing and bottling partner Terra.

"There was a lot of work in terms of getting it right. Adrian [Walker] looked at 231 different styles of recipe for cream liqueur and tested 41 types of cocoa before he got it right. He oversaw all the operational aspects of bringing the product to marketplace," Phelan said.

In 2007, Coole Swan launched and within two years became the first cream liqueur and first Irish spirit ever to win Overall Best Liqueur at the industry-leading World Spirits Competition. In the last financial year, it had sales of €750,000.

In May 2010, they began raising €1m in equity investment. Phelan said they are already near to "closing the process. We are in an ongoing funding environment. We are looking to both Irish and international investors. Despite the doom and gloom in this market in terms of economics, when I visit the US and other markets, there is a deep-seated continued respect and love of this country from the Irish diaspora," he said.

In August 2010, they signed an import and distribution deal with Sazerac, the fifth-largest spirit importer in the US. They hope this deal will increase sales to more than €1m in the next year. The cream liqueur category has grown to 13.5 million cases worldwide. Coole Swan's target is to scale up to 300,000 cases a year in the next five years.

The company has worked with Bord Bia. It is the only spirits brand that is a member of the Love Irish Food lobby group and has positioned itself as an "affordable luxury brand at €4-€5 above the market leader".

The start-up strategy was "building a premium position in the market and then expanding to independent retailers and then the multiples", said Phelan.

In Ireland, they have targeted independent retailers such as The Whiskey Shop, O'Briens and Barrys of Mallow, but also have multiples such as Tesco coming on board. In Britain, they are present in high-end shops such as Selfridges, Fortnum & Mason, Harrods, and most recently in John Lewis's Food Hall.

With Christmas approaching, "a key sales period" for the brand, Phelan emphasised that they "do not underestimate the market and international markets" but plan to accelerate growth where they already have a presence and "broaden our footprint in the US. It's a very focused strategy. We have an expansion plan in the US with our new distributor through which we would hope to reach more than 20 states. We are not going to every market but there are new markets we will look at where opportunities do exist. One of those would be Canada. And there seems to be growing interest in China."

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