Adolph Coors Company

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International Guild of Hospitality & Restaurant Managers

Adolph Coors Company (NYSE:RKY)

Adolph Coors Company is a producer of beer, with a portfolio of brands designed to appeal to a wide range of consumer taste, style and price preferences. Its principal subsidiary, Coors Brewing Company, is a brewer in the United States . The Company also owns a brewer in the United Kingdom, Coors Brewers Limited, and has brewing and packaging facilities in Elkton , Virginia , and Memphis , Tennessee . Coors owns major facilities in Colorado to manufacture aluminum cans and ends, as well as bottles, and is a partner in ventures that operate these plants. Historically, the Company's beverages have been sold throughout the United States and in select international markets. The Coors Brewers brand portfolio consists of 20 United Kingdom beer brands and four FAB brands with strong offerings in each of its target segments. Major United Kingdom brands include Carling and Grolsch. Coors Brewers currently operates four breweries in the United Kingdom , with production capacity of more than 12 million barrels.

In March 2002, the Company announced plans to close its Cape Hill brewery and Alloa malting facility. In February 2002, the Company acquired the Carling business from Interbrew S.A. The Carling business has been renamed Coors Brewers Limited. During the third quarter of 2001, the Company finalized its contract with EDS to outsource certain functions of its information technology infrastructure. Effective January 1, 2002 , the Company became an equal member with Ball Corporation (Ball) in a Colorado limited liability company, Rocky Mountain Metal Container, LLC (RMMC). Also effective on January 1, 2002 , the Company entered into a can and end supply agreement with RMMC (the Supply Agreement). Under that Supply Agreement, RMMC will supply the Company with substantially all of the can and end requirements for its Golden brewery. RMMC will manufacture these cans and ends at the Company's existing manufacturing facilities, which RMMC is operating under a use and license agreement.

In January 2001, the Company entered into a joint venture agreement with Molson, Inc. and paid $65 million for a 49.9% interest in the joint venture. The joint venture, Molson USA , LLC (MUSA), was formed to import, market and sell Molson's brands of beer in the United States , including Molson Canadian, Canadian Light, Molson Golden and Molson Ice. Under the agreement, the joint venture owns the exclusive right to import Molson brands into the United States . Additionally, any Molson brands that may be developed in the future for import into the United States are covered under the agreement.

In January 1998, the Company formed Coors Canada , a partnership arrangement, with Molson, Inc. in Canada to distribute Coors products in Canada . The Company owns 50.1% of this partnership through its 100% ownership of Coors Canada, Inc. In December 2000, the Company entered into a five-year brewing and packaging arrangement with Molson in which the Company will have access to some of Molson's available production capacity in Canada . The Molson capacity available to the Company under this arrangement in 2001 was 250,000 barrels. Starting in 2002, available capacity increases to 500,000 barrels. Currently, the Company pays Molson a fee for holding this capacity aside for the Company's future use.

The Company's sales of malt beverages totaled 22.7 million barrels in 2001, 23 million barrels in 2000 and 22 million barrels in 1999. The barrel sales figures for each year do not include barrel sales of a non-consolidated Canadian partnership. An additional 1.3 million, 1.2 million and 1.0 million barrels were sold by this non-consolidated entity in 2001, 2000 and 1999, respectively.

The Company's top-selling brand is Coors Light, a premium beer. Its other products include an additional 10 brands. The Company's other premium beers include Coors Original and Coors Non-Alcoholic. The Company also offers a selection of above-premium beers including George Killian's Irish Red Lager and Blue Moon Belgian White Ale. In addition, the Company offers Zima and Zima Citrus, alternative malt-based beverages that are light, refreshing products and has long competed in the "malternative" category. The Company also competes in the lower-priced segment of the beer market, called the popular-priced segment, with Extra Gold and its Keystone family of beers (Keystone Premium, Keystone Light and Keystone Ice).

In 2001, the Coors Dry and Winterfest brands were phased out because of greater emphasis and focus on other brands. The Company owns and operates The SandLot Brewery at Coors Field ballpark in Denver , Colorado . This brewery, which is open year-round, makes a variety of specialty beers and has an annual capacity of approximately 4,000 barrels.

The Company competes most directly with Anheuser and Miller, the dominant companies in the U.S. industry.

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