Diedrich Coffee to Increase K-Cup Production Capacity by More Than 40%

IRVINE, Calif., June 16 /PRNewswire-FirstCall/ -- Diedrich Coffee, Inc.
(Nasdaq: DDRX), a leading roaster and wholesaler of the world's finest
coffees, is expanding Keurig K-Cup(R) production capacity at the company's
roasting and packaging facility in Castroville, Calif.

The company will be adding equipment for a sixth K-Cup production line and
upgrading the equipment of an existing line, which together will increase the
facility's K-Cup output capacity by more than 40%. The upgrade and new
installation is expected to cost approximately $3.1 million and come on line
by this fall.

"We're adding this K-Cup packaging capacity in order to address projected
increases in demand," said J. Russell Phillips, president and CEO of Diedrich
Coffee. "The K-Cup market continues to grow and we intend to stay ahead of the
anticipated demand as consumers increasingly move to the Keurig brewers,
especially in the at-home market."

Diedrich Coffee is one of only four roasters under license to produce K-Cups
for Keurig's top-selling single-cup brewing system. The award-winning design
of Keurig's single-cup brewing system combines a pressurized hot water brewer
with its patented K-Cups, which feature a design that preserves the freshness
of specialty coffees and teas. System wide, more than 2 billion cups of Keurig
Brewed(R) coffee and tea have been enjoyed since 1998.

About Diedrich Coffee
With headquarters in Irvine, California, Diedrich Coffee specializes in
sourcing, roasting and selling the world's highest quality coffees. The
company markets its three leading brands of specialty coffees, Diedrich
Coffee, Coffee People and Gloria Jean's Coffees, through office coffee service
distributors, restaurants and specialty retailers, and via the company's web
stores. Diedrich Coffee is one of only four roasters under license to produce
K-Cups for Keurig Incorporated's top-selling single-cup brewing system. For
more information about Diedrich Coffee, call 800-354-5282 or go to:
www.diedrich.com, www.coffeepeople.com or www.coffeeteastore.com.

Forward-Looking Statements
Statements in this news release that relate to future plans, financial results
or projections, events or performance are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and fall under
the safe harbor. Actual results and financial position could differ materially
from those anticipated in the forward-looking statements as a result of a
number of factors, including, but not limited to, the financial and operating
performance of the Diedrich Coffee's wholesale operations, the company's
ability to maintain profitability over time, the successful execution of the
company's growth strategies, , the impact of competition, the availability of
working capital, and other risks and uncertainties described in detail under
"Risk Factors and Trends Affecting Diedrich Coffee and its Business" in the
company's annual report on Form 10-K for the fiscal year ended June 25, 2008
and other reports filed with the Securities and Exchange Commission. Except
where required by law, the company does not undertake an obligation to revise
or update any forward-looking statements, whether as a result of new
information, future events or changed circumstances.

Trademarks are the property of their respective owners.

Diedrich Coffee Investor Relations:
Scott Liolios or Cody Slach
Liolios Group, Inc.
Tel 949-574-3860
info@liolios.com

SOURCE Diedrich Coffee, Inc.

Scott Liolios or Cody Slach, both of Liolios Group, Inc., +1-949-574-3860,
info@liolios.com, for Diedrich Coffee, Inc.