Around this time of year, beer drinkers around the world raise their glasses to Ireland. Presumably, most of those glasses are filled with Guinness, the dark stout that's as synonymous with the country as James Joyce, Gaelic football, and Saint Patrick himself.

Except, perhaps, in the pubs of Ireland, where you regularly find taps discharging Coors Light, twentysomethings clutching vodka mixers, and publicans serving a steady stream of Bulmers Irish Cider over ice. The days when Guinness could claim one of every two Irish pints are gone—since the 1990s, it's more like one in three.

"Me old man only drank Guinness," a chatty Dublin cabbie said last month. "He could even tell if it was a bad pint, and he'd send it back. But I can't drink the stuff, which is what I think you'll find with the younger generation."

Still, this Saint Patrick's Day is especially festive at Guinness. During the second half of 2007, sales at Guinness were up 3 percent in Ireland, the first growth in the homeland in eight years.

"Flat is up in the current environment," says Trevor Stirling, beverage analyst for Sanford Bernstein and former strategy director for Guinness. "Stopping the decline is a big achievement."

The company is cautiously optimistic, says Grainne Mackin, head of corporate communications for Diageo Ireland, the company created by a 1997 merger between Guinness and the British food-and-drink company Grand Metropolitan. "But it's good to have excitement after years of hearing that Guinness is finished."

The question now, of course, is whether the brewer can sustain the momentum. Diageo increased the brand's total marketing budget by 20 percent last year, and Guinness has been aggressively going after younger drinkers with its 100,000-strong marketing email list (nothing helps like a free pint), its sponsorship of the Gaelic Athletic Association, and a fantasy rugby game it created for the Irish team during the 2007 World Cup. The ads for Music Machine and Tipping Point have become viral hits worldwide

In 2006, it introduced two new products: Guinness Red, an ale-style beer available only in Britain, and Guinness Mid-Strength, a lower-alcohol version of the original (2.8 percent versus 4.2 percent) sold in just a handful of Dublin and Limerick pubs. Mid-strength is targeted at the "Celtic Tiger" business crowd who may want a pint or two but have a big meeting in the morning.

All the effort has resulted in a slight uptick in young imbibers, but Guinness still faces a fundamental challenge in recapturing its former stranglehold on the Irish market—what Stirling calls a challenging flavor profile. It's called "stout" for a reason. "It starts out creamy and finishes with a slightly sour twist," says Julie Johnson Bradford, editor of All About Beer magazine (allaboutbeer.com). "The beer has a slightly burned-toast flavor that's quite refreshing." Try selling that to an appletini aficionado.

Also detracting from the cheer is the fact that last summer's dreariness contributed to Guinness' success—the beer is much more popular in colder months. Stirling says the inclement weather was a prime reason for the growth, while Mackin says that it only accounts for a third. Either way, depending on rain to increase beer sales is ill advised, even in Ireland.  

The news isn't as damp outside of the home country. Globally, Guinness sales were up 6 percent during the second half of last year, and there has been strong growth in developing countries. Nigeria, where Guinness opened its first brewery outside the British Isles 46 years ago, is the third-biggest market after Great Britain and Ireland. Celtic history matters little in Africa, where bottles of Guinness Foreign Extra Stout have 7.5 percent alcohol content and are postured as a macho, virile beer. The beer is spreading throughout the continent, and in the same six-month period overall sales in Africa were up 14 percent.

Guinness is also doing well in North America, but Olly Wehring, managing editor of beverage trade website Just-Drinks.com, thinks it could be doing much better. "Guinness needs to look more seriously at the United States," he says. Traditionally, Guinness has sold well in Irish enclaves on the coasts and Chicago, but Wehring sees an untapped reserve in Middle America. "Craft beer is growing across the country, and Guinness should jump on that bandwagon."

No matter where the growth markets for Guinness are, though, Ireland will always be the land of stout and honey. The country and the beer are synonymous, so it's important Guinness maintain the "good craic" at home heading into 2009—after all, next year marks the 250th anniversary of the founding of the brewery. Even that cabbie should be toasting his old man and the old country…with a pint of Guinness.