Caribou Coffee Company Plans for Continued Business Expansion, 2006 Operating Highlights and 2007 Guidance

Business Wire, Jan 8, 2007

MINNEAPOLIS -- Caribou Coffee Company, Inc. (NASDAQ: CBOU):

-- 4Q 2006 Preliminary Comparable Coffeehouse Net Sales Increase 2
   Percent

        -- Preliminary 2006 Total Net Sales Increase 18 Percent

-- 60 Company-Owned and 20 Franchised Coffeehouses Opened in 2006

        -- Brand License Agreement with Coca-Cola North America

        -- New Franchise Agreements for Four Major U.S. Airports

        -- New Brand License Agreement with Keurig Incorporated

Caribou Coffee Company, Inc. (NASDAQ: CBOU) the second largest company-owned gourmet coffeehouse operator in terms of coffeehouses, today announced its plans for continued business expansion and presented a summary of 2006 operations. In celebration of the first full year as a public company listed on the NASDAQ exchange and to start 2007, Caribou Coffee Chairman and CEO, Michael J. Coles, will open the NASDAQ market tomorrow morning with the ringing of the opening bell for Tuesday, January 9th.

2006 Review

The Company today announced that preliminary total net sales for the thirteen weeks ended December 31, 2006, increased 18 percent over the same period in the prior year. For the fifty-two week period ended December 31, 2006, preliminary total net sales rose 18 percent over the same period in the prior year.

Preliminary comparable coffeehouse net sales increased 2 percent for the thirteen weeks ended December 31, 2006, compared with the same thirteen weeks in the prior year. For the fifty-two week period ended December 31, 2006, preliminary comparable coffeehouse net sales declined 1 percent as compared with the same fifty-two week period in the prior year. Franchised stores are not included in the comparable coffeehouse net sales calculations.

Preliminary "Other Sales", which consist of product sales to commercial, franchise and Internet customers, royalties from franchises and brand licenses and franchise development fees increased 22 percent during the thirteen weeks ended December 31, 2006, to $3.0 million from $2.5 million during the thirteen weeks ended January 1, 2006. This increase was primarily driven by product sales to franchise and commercial customers. For the fifty-two week period ended December 31, 2006, "Other Sales" were 58 percent higher than the same period in the prior year.

For the thirteen weeks ended December 31, 2006, the company opened 25 company-owned coffeehouses and 8 franchised coffeehouses. For the full year, Caribou Coffee opened 60 coffeehouses, while franchisees opened 20 coffeehouses. Coffeehouses at year-end 2006 totaled 464, including 24 franchised locations of which 17 were international locations.

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Business Initiatives

A key part of the continued business expansion is the aggressive development of a national brand presence through brand licensing agreements with Kemps, General Mills and, most recently, the Coca-Cola North America (CCNA). During 2006, Caribou Coffee and Kemps launched four flavors of Caribou Coffee ice cream (Caribou Blend, Java Chunk, Caramel High Rise and Turtle Mocha). All four flavors were strong performers for Kemps in the premium ice cream segment. In 2007, a light version will be introduced - Java Chunk Light - as well as two flavors of Caribou Coffee ice cream nuggets (a bite-sized, chocolate-covered coffee ice cream treat).

In 2006, Caribou Coffee and General Mills launched two Caribou Coffee snack bars, Vanilla Latte and Chocolate Mocha. Based upon the success of these first two flavors, new Caramel High Rise and Mint Condition bars will begin rolling out this month.

Coca-Cola North America and Caribou Coffee recently announced plans to launch a new line of premium ready-to-drink iced coffees in the U.S. this summer - the sixth new product initiative announced by CCNA in the fast-growing coffee, tea and indulgent beverage segments. Michael J. Coles, Caribou Coffee Chairman and CEO commented, "Our partnership with Coca-Cola North America will extend our great premium coffee taste experience into the ready-to-drink category and allow us to take advantage of CCNA's world-class distribution system." Added J.A.M. "Sandy" Douglas, president, Coca-Cola North America, "Volume in the ready-to-drink coffee category has grown 17% in the last four years, and revenues are up 24%. Caribou's expertise, involvement and focus in brewing the perfect coffee will allow us to create a wonderful ready-to-drink coffee."

Caribou Coffee continues aggressive development of new products for its retail stores and is launching a new line of lattes today - the Northern Lite Lattes. All seven varieties of Northern Lite Lattes will be featured from January 8th through March 4th at all Caribou Coffee locations. Northern Lite Lattes are made of skim milk and sugar-free syrups in vanilla, carmel, turtle, raspberry, hazelnut, chocolate raspberry and Kahlua[R] flavors. These hot latte drinks offer customers a new guilt-free drink that is decadent, yet still as low as 80 calories per drink.

Commercial sales have also grown significantly during the past year. The Company continued the expansion of sales of Caribou Coffee in grocery stores by adding additional products to existing customers, and expanded the number of grocery stores where Caribou Coffee is sold to approximately 2,000. During the fourth quarter, Caribou also expanded the number of Hy-Vee and Meijer stores carrying its products. In terms of additional products to existing customers, a pre-packaged Caribou Coffee product was added to the Safeway Denver Colorado division and Fair Trade coffee is being sold at additional Costco stores. Sam's Clubs in the Midwest added Caribou Natural Decaffeinated Coffee to its line-up. The office coffee business also saw growth with the addition of Aramark in Denver, CO; Toledo, OH and Richmond, VA and another office coffee distributor, Gold Cup, in several southeast markets.