WEDNESDAY JUNE 30, 11:17 PM EASTERN TIME

COMPANY PRESS RELEASE

SHAREHOLDERS APPROVE DIEDRICH COFFEE'S
ACQUISITION OF COFFEE PEOPLE

PRICING OF FOLLOW-ON PUBLIC OFFERING COMPLETED

IRVINE, Calif--(BUSINESS WIRE)--June 30, 1999--Diedrich Coffee Inc.
(Nasdaq:DDRX - news) and Coffee People Inc. (Nasdaq:MOKA - news) announced
that during meetings held earlier today, shareholders for both companies
approved Diedrich Coffee's acquisition of Coffee People.

The acquisition, which is expected to close by July 7, 1999, positions Diedrich
Coffee as the second-largest company in the specialty coffee market and as
the industry leader in mall-based coffee stores. The combined company will
have annual systemwide sales of more than $150 million through 361 locations
in 38 states and six foreign countries.

In aggregate, Coffee People shareholders will receive $23 million in cash and
1.5 million shares of Diedrich Coffee common stock. Each outstanding share of
Coffee People common stock will be converted into 0.14 shares of Diedrich
Coffee common stock and $2.11 in cash.

Diedrich Coffee's follow-on public offering of 4.6 million shares of common
stock was fully subscribed and priced today at $6.00 per share. All shares were
offered by the company through an underwriting group managed by BancBoston
Robertson Stephens Inc., Dain Rauscher Wessels, a division of Dain Rauscher
Inc., and First Security Van Kasper.

As previously announced, the company has granted the underwriters a 30-day
option to purchase 690,000 shares to cover over-allotments. Net proceeds from
the offering will be used to finance the cash payment to Coffee People
stockholders and to pay fees and expenses related to the acquisition. The
remaining proceeds will be used for general corporate purposes.

A registration statement relating to these securities has been filed with the
Securities and Exchange Commission and has become effective. This news
release shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any state
or jurisdiction.

A preliminary prospectus relating to this offering may be obtained from
BancBoston Robertson Stephens Inc. at 555 California St., San Francisco,
Calif. 94104, 415/781-9700; Dain Rauscher Wessels, a division of Dain Rauscher
Inc., at 60 South 6th St., Minneapolis, Minn. 55402, 612/371-2800; or First
Security Van Kasper at 600 California St., San Francisco, Calif. 94108,
415/391-5600.



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 and 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 successful closing
of this transaction, impact of competition, the availability of working capital
and other risks and uncertainties described in detail under "Certain Factors
and Trends Affecting Diedrich Coffee and its Business" in the company's
annual report on Form 10-K for the fiscal year ended Jan. 27, 1999.

For more information about Diedrich Coffee, call 800/354-5282 or visit the
company's Web site at www.diedrich.com.
Contact:

   Diedrich Coffee Inc., Irvine
   Ann Wride, 949/260-6713 (Investor Contact)
     or
   BSMG Worldwide, Los Angeles
   Dan Cahill, 310/966-5513 (Media Contact)