Case Study- Odwalla Inc.

E-Coli Outbreak
Most food and beverage manufacturing companies
pride themselves on using the fnest and freshest
ingredients available for their products. However,
what happens when a companys product is blamed for a foodborne
illness? In October 30, 1996, an E-coli outbreak was linked to juice
produced by the Odwalla Juice Company.
Who is Odwalla?
Odwalla Inc. began twenty years ago when three friends used a $200
hand-juicer to deliver fresh orange juice to local restaurants in San
Francisco, California. Now earning $19 million dollars a year in
revenue, Odwalla combines science and art to create the freshest
products available. Odwalla focuses not only on nourishing the body,
but also the mind and soul.
The problem?
Health ofcials in Washington state confrmed a link between cases of
E-coli 0157:H7 and Odwalla apple juice on October 30, 1996. As a
result, one child died and at least 60 people became seriously ill after
drinking the juice.
What to do?
Odwalla Inc. hired Edelman Public Relations, an independent global
PR frm, on October 31, 1996 to help handle the situation. Odwalla
appropriatley chose CEO Stephen WIlliamson to act as a liason
between the company and the public.
Odwalla tackled the crisis head on with open and honest intentions.
Edelman strategically and purposely placed Williamson in the
spotlight to show that he was involved in resolving the crisis.
Williamson cooperated with the media upfront and expressed
sympathy for all those afected by the outbreak. Odwalla's visible and
constant presence in the media and frm commitment to resolve the
crisis were efective steps to help restore their credibility.
It was important for Williamson to also address the company
internally. Williamson directed daily conference calls with employees
to keep them posted on the current situation and to squelch
unnecessary rumors. Williams action to include the employees in the
crisis was a helpful step to unite the company as a whole- they were
in this together.
Also, Odwalla used a separate website to post accurate information
for the public to monitor the status of the crisis. Essentially, Odwalla
did everything they could at the time to handle the crisis the best way
they could.
Outcome?
It is evident that Odwalla Inc. had no crisis management plan in
place. Crisis management plans are crucial and critical to a
company's survival. With such a plan Odwalla could have efectively
handled the situation themselves. Odwalla ignored key prodromes, or
warning signs, that indicated their juice was contaminated. Customers
had complained previously of falling ill before the mass e-coli
outbreak, but Odwalla looked the other way. If Odwalla had paid
attention to such warning signs they could have enacted stricter
health codes and cleaning protocols. However, the companys
honesty and willingness to take full responsibility for their actions
should be praised. Odwalla successfully implemented a last minute
crisis plan and learned valuable lessons. In a statement to the media
Williamson commented, Odwalla has been scarred forever by the
mistake that we made in 1996. We don't try to hide that scar. We don't
cover it up. We keep it in plain sight to remind us of the tragedy that
we must avoid at all costs."
http://www.fastcompany.com/articles/2001/03/odwalla.html