Diedrich Coffee Completes Transition to Premier Roaster and Wholesaler

Signs Foodservice Distributor to Assume Local Foodservice Accounts and Introduce Diedrich Brands to Foodservice Providers in Seven Western States

Irvine, Calif.,// PRNewswire-FirstCall // -- Diedrich Coffee, Inc. (Nasdaq: DDRX) has completed its planned transition to a premier roaster and wholesaler of its Diedrich Coffee, Gloria Jean's Coffee and Coffee People brands.

In the fall of 2007, the company announced its intention to divest its retail and distribution operations in order to focus exclusively on roasting and wholesale sales. During 2008, the company exited from all company-owned retail operations, including Diedrich Coffee coffeehouses and Coffee People coffeehouses, selling the sites to a major chain of coffee houses. In March 2009, the company announced the sale of its domestic Gloria Jean's retail franchise company, retaining the rights to Gloria Jean's branded K-Cups(R) for the Keurig Single-Cup Brewing System.

As a final step in the transition, Diedrich Coffee has appointed major beverage specialist, Quick Dispense, Inc., as a Master Distributor in foodservice. Quick Dispense offers total market support (sales, service, equipment and product distribution) in Arizona, California, Colorado, Idaho, Nevada, Utah and Wyoming. In addition to servicing the more than 300 existing Diedrich Coffee foodservice accounts in Southern California, the distribution agreement offers Diedrich Coffee access to more than 7,000 QDI accounts across these seven western states.

"Quick Dispense enhances the services offered to our current local foodservice customers," said J. Russell Phillips, president and CEO of Diedrich Coffee, "as well as immediately expands our brand reach to new foodservice customers outside the Southern California market."

According to Paul Heeschen, Diedrich Coffee's chairman of the board: "Signing QDI also represents a milestone in the implementation of our strategy to capitalize on the strong growth of the wholesale specialty coffee market, and particularly in the single-serve premium coffee market with our three brands of fine specialty coffees - Diedrich Coffee, Gloria Jean's Coffees and Teas, and Coffee People."

"As an outcome of this strategy," continued Heeschen, "we have been realizing dramatic growth in this more profitable wholesale business as our renewed focus meets the increasing demand for specialty coffees in homes, restaurants, and offices. These markets are being addressed by online, big box retail and foodservice channels, with the demand for K-Cups especially on the rise." Diedrich Coffee is one of only four roasters under license to produce K-Cups for Keurig's increasingly popular single-cup brewing system.

About Quick Dispense

Family owned and operated since 1957, Quick Dispense, Inc. (QDI) services office coffee and foodservice customers across several western states. QDI offers a wide variety of beverage products including coffees, ice teas, hot chocolate and juices, as well as related equipment supply, support and maintenance.

About Keurig

Keurig, Incorporated, a wholly-owned subsidiary of Green Mountain Coffee Roasters (Nasdaq: GMCR), is a pioneer and leading manufacturer of single-cup brewing systems. Keurig's proprietary brewing system combines a pressurized hot water brewer with multiple varieties of K-Cups, which feature a patented design that preserves the freshness of gourmet coffee and tea. Through licensing agreements, Keurig offers more than 100 varieties of premium branded coffees and teas in K-Cups. 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's three brands are Diedrich Coffee, Gloria Jean's Coffees and Coffee People. Diedrich Coffee sells its coffees through office coffee service distributors, restaurants and specialty retailers, and via the company's Web stores.

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, franchisee's adherence to the company's practices, policies and procedures, 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.

SOURCE Diedrich Coffee, Inc.


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