Odwalla Crisis
http://www.mallenbaker.net/csr/crisis05.html
Companies in Crisis - What to do when it all goes wrong
Odwalla and the E-coli outbreak
What happened?
Odwalla (pronounced "odewalla") is the health-conscious juice company which began a couple of decades ago when Greg Steltenpohl, 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.
On October 30, 1996, everything changed. Health officials in Washington state informed the company that they had discovered a link between several cases of E. coli 0157:H7 and Odwalla fresh apple juice.
The link was confirmed on November 5. As the crisis played itself out, one child died and more than 60 people in the Western United States and Canada became sick after drinking the juice. Sales plummetted 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.
What did the company do?
Odwalla acted immediately. Although at the point where they were first notified the link was uncertain, 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. Internal task teams were formed and mobilised, and the recall - costing around $6.5m was completed within 48 hours.
What the company didn't do was to 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.
Internal communications were key: Williamson conducted regular company-wide conference calls on a daily basis, giving employees
Companies in Crisis - What to do when it all goes wrong
Odwalla and the E-coli outbreak
What happened?
Odwalla (pronounced "odewalla") is the health-conscious juice company which began a couple of decades ago when Greg Steltenpohl, 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.
On October 30, 1996, everything changed. Health officials in Washington state informed the company that they had discovered a link between several cases of E. coli 0157:H7 and Odwalla fresh apple juice.
The link was confirmed on November 5. As the crisis played itself out, one child died and more than 60 people in the Western United States and Canada became sick after drinking the juice. Sales plummetted 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.
What did the company do?
Odwalla acted immediately. Although at the point where they were first notified the link was uncertain, 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. Internal task teams were formed and mobilised, and the recall - costing around $6.5m was completed within 48 hours.
What the company didn't do was to 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.
Internal communications were key: Williamson conducted regular company-wide conference calls on a daily basis, giving employees