Umesh chandra shukla

MPMIR 4th sem

36

1
Case Study-Odwalla

Odwalla is the health-conscious juice company

which began a couple of decades ago when Greg
Stelt enpohl, Gerry Percy and Bonnie Bassett
began squeezing fresh oranges on a $200 hand
juicer. The company was growing strongly with
annual sales rising 30% per year and approaching
$90m. The company had established a strong
brand with enormous customer loyalty.

2
Case Study Cont….

Odwalla juice e-coli outbreak in 1996

Health officials in Washington state
informed the company that they had
discovered a link between several cases of E.
coil 0157:H7 and Odwalla fresh apple juice.

3
Case Study Cont….
One child died and more than 60 people in the
Western United States and Canada became sick
after drinking the juice.
Sales plummeted by 90%, Odwalla's stock price
fell 34%.
Customers filed more than 20 personal-injury
lawsuits and the company looked as though it
could well be destroyed.

4
 What did the company do?
 Odwalla's CEO Stephen Williamson ordered a
complete recall of all products containing apple or
carrot juice. This recall covered around 4,600
retail outlets in 7 states.

On all media interviews, Williamson expressed

sympathy and regret for all those affected and
immediately promised that the company would
pay all medical costs.

5
What did the company do? cont….
Internal communications:-
Williamson conducted regular company-wide
conference calls on a daily basis, giving employees
the chance to ask questions and get the latest
information.
External communications:-
Within 24 hours, the company had an
explanatory web site (its first) that received
20,000 hits in 48 hours.
All possible attempts were made to provide up to
the minute, accurate information.
6
What the company didn't do
 Company didn’t avoid responsibility. On all media
interviews, Williamson expressed sympathy and
regret for all those affected and immediately promised
that the company would pay all medical costs. This,
allied to the prompt and comprehensive recall, went a
long way towards satisfying customers that the
company was doing all it could.

7
Fixing the Problem
The next step was to tackle the problem of contamination.
The company switched from unpasteurized juice to a
process called "flash pasteurization" which would
guarantee that E-coli had been destroyed without
compromising flavor.

Within months of the outbreak, the company had in place

what some experts described as "the most comprehensive
quality control and safety system in the fresh juice
industry."

The new process was communicated in all advertising and

public outreach campaigns

8
Gaining back trust
The company did exactly the right things to achieve
this. For instance during the lean months, Odwalla
refused to lay off any of its delivery people. They were
sent out to maintain customer relations - an approach
that not only earned the loyalty of the employees, but
helped to secure the company's reputation with its
customers.
"I don't blame the company" the father of the girl
who died said. "They did everything they could".

9
Conclusion
The company's values spoke of nourishing people - and
when the crisis came it was an adherence to honest,
straight talking and accepting responsibility that helped to
get the company through.
There are critics who refuse to credit the company with
any integrity whatsoever - but even these will concede that
as an exercise in crisis management, Odwalla stands as an
example of best practice that few can match.
The year after the crisis, Odwalla was voted "Best Brand
Name in the Bay Area" by San Francisco Magazine. This
was the first indication amongst many that Odwalla's
reputation had survived.

10
11