Diedrich Coffee, Inc. announced yesterday that Stephen V. Coffey has been appointed to serve as the new Chief Executive Officer of the Company following the resignation of Roger M. Laverty on December 13, 2005.

“On behalf of the Board of Directors, I would like to take this opportunity to thank Rocky for his contributions to the growth and success of the Company over the past two and a half years,” Paul C. Heeschen, chairman of the board of directors, said in a press release. “During his term, Rocky was instrumental to our achievement of positive same store sales growth in all three brands, led the successful sale of our international Gloria Jean’s operations, and ably positioned the Company for future growth. With these accomplishments in place, I am pleased to announce the appointment of Steve Coffey as our new Chief Executive Officer. He is an experienced executive and we believe that he is well suited to continue to improve our financial performance and will be able to facilitate further growth.”

Mr. Coffey founded Coffey Management Company, an advisory and management services company, in 1986. Among his recent management assignments, Mr. Coffey served as a senior executive of Chevys, Inc., a $220 million nationwide chain of Mexican restaurants, and as the President and CEO of Edwards Theatres, Inc., a $352 million Newport Beach, California film exhibitor, where he served as President and CEO and led the company through a voluntary Chapter 11 bankruptcy proceeding. The National Turnaround Management Association recognized his team’s actions in restructuring and recapitalizing the troubled 70-year theatre chain as the large company “Turnaround of the Year.”

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 Gloria Jean’s Coffees, Diedrich Coffee and Coffee People. The Company’s 206 domestic retail outlets, the majority of which are franchised, are located in 33 states. Diedrich Coffee also sells its coffees through more than 460 wholesale accounts including office coffee service distributors, restaurants and specialty retailers, via mail order and the Internet. For more information about Diedrich Coffee, call 800-354-5282, or visit the Company’s Web sites at www.diedrich.com, www.gloriajeans.com and www.coffeepeople.com.