Name: M.

Pavan Kumar
Roll Number: F21038(PGDM-ABM)
Program: FABS
Managerial Analysis and Communication
ASSIGNMENT-06
CASE STUDY ON ODWALLA .INC
Summary:
Odwalla Inc. began twenty years ago when three friends in San Francisco, California,
utilised a $200 hand-juicer to supply fresh orange juice to area eateries. Odwalla,
which now has a revenue of $19 million per year, mixes science and creativity to
offer the freshest goods available. Odwalla aims to nourish not only the body, but
also the mind and soul. The majority of food and beverage manufacturing companies
take pride in employing only the best and freshest ingredients in their goods. What
happens, though, when a company's product is linked to a foodborne illness? An E.
coli epidemic was attributed to Odwalla Juice Company juice on October 30, 1996. It
is propelled by its simple visual vision of making great juice, doing good things for
the communityand building a business with heart, Odwalla Inc. is a thriving health
food company thatsells a wide selection of fruit juices, smoothies and energy bars.
Founded in 1980, thecompany was extremely effective in establishing itself as a
distinctive brand with a loyalcustomer base in markets across the United States and
Canada. Odwalla, which is nowowned by the Coca-Cola Company, is headquartered
in Half Moon Bay, California, andis continually developing new products to remain
competitive with similar brands suchas Kashi and Luna Bar.

Problems:
 Fruit juice, smoothies, and snack bars are sold to promote a healthy lifestyle,
However, in 1996, Odwalla Inc. got a big issue about pasteurization when a child
died and many people got sick after consuming their contaminated apple juice.
 It still started to face a huge crisis because of E. coli found in its apple juice. This
totally affected the company’s the culture of safety and nutrition.
 Stephen recalled all apple juice or carrot juice- based products.
 One kid died, and more than 60 people in the Western United States and
Canada died as a result of drinking the juice.
 Sales plummeted by 90 percent, Odwalla's stock dropped 34%,
 Customers filed more than 20 personal injury claims, and the firm appeared to
be on the verge of being destroyed.

Root Cause(s):
 First, the defect in its technology resulted in the outbreak of E. coli poisoning.
Resisting industry safety standards.
 Odwalla had significant flaws in its safety procedures and citrus-processing
equipment.
 The lower-efficient feedback was one of the most important causes of the E. coli
poisoning outbreak.
 The head of quality assurance, Dave Stevenson, who was aware of the dangers,
proposed using chlorine rinse as a backstop against bad fruit
 External environment that is effecting organization.
 Identification of communication strategies.
 Drinking the odwalla's squeezed apple and blending eliminates 66 individuals
groups.
Alternative Solutions:
 Odwalla must take immediate action to avoid damage to customer’s confidence
level and lose faith in stakeholders. In order to resolve the issue quickly Odwalla
must take following important steps.
1. Identify the contaminated batch numbers
2. Quarantine the contaminated products
3. Communicate with all stakeholders
4. Find the root-cause of contamination
5. Implement the solution from root-cause analysis
6. Get approval from health agencies
7. Keep consumers updated via advertisements – TV, Radio, Newspapers and
Flyers
8. Organize factory tour for customer satisfaction.
Decision Criteria:
For this issue, the problem is both for the industry and the regulators. They both
should notice more detail steps to ensure the quality of the products. For this case,
Odwalla should be more carefully for their each juice- making step, and make sure
there’s nothing harmful coming out from heating and cooling processes. The company
should pay more to supervise their detail steps, and do researches for those processes.
I recommend that Odwalla should establish a department of food safety research. This
will give the company more information about food safety, and fit in the company’s
culture.

Results:
 After two months of such a massive emergency, the item was back in stores and
was voted finest San Francisco business one year later.
 Become the best natural product merchant in the country.
 Sales picked up quickly once more in the country again.

Conclusions:
Stephen and Greg are the leaders of the company, and they are the most important
decision- makers. For this issue, the problem is both for the industry and the
regulators. They both should notice more detail steps to ensure the quality of the
products. For this case, Odwalla should be more carefully for their each juice- making
step, and make sure there’s nothing harmful coming out from heating and cooling
processes. The company should pay more to supervise their detail steps, and do
researches for those processes.
I recommend that Odwalla should establish a department of food safety research. This
will give the company more information about food safety, and fit in the company’s
culture.
THE END