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

Irvine, Calif., // 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.

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.

SOURCE Diedrich Coffee, Inc.



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