Case Study- Odwalla Inc. E-Coli Outbreak

Most food and beverage manufacturing companies pride themselves on using the finest and freshest ingredients available for their products. However, what happens when a company’s 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 officials in Washington state confirmed 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 firm, 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 affected by the outbreak. Odwalla's visisble and constant presence in the media and firm commitment to resolve the crisis were effective 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 unecessary rumors. William’s 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 effectively handeled 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 company’s honesty and willingness to take full responsibility for their actions should be praised. Odwalla sucessfully 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