By : RAHUL GUPTA
MBA (G) AMITY BUSINESS SCHOOL
PH: 09807885800
CRISIS MANAGEMENT
ODWALLA
INTRODUCTION
Manufactured : Health-conscious Juice
Founders : Greg Steltenpohl
Gerry Percy
Bonnie Bassett
U.S. BASED
WHAT HAPPENED
On October 30, 1996 :
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
CONSEQUENCE
November 5 :
Child died and more than 60 people in the
western United States and Canada became
sick after drinking the juice
Sales fell by 90%,
Odwalla's stock price fell 34%
More Than 20 Personal-injury Lawsuits Filed
Company Looked As Though It Could Well Be
Destroyed
What did the company
do?
Internal communications were the key
Conducted regular company-wide
conference calls on a daily basis,
giving employees the chance to ask
questions and get the latest
information
This approach proved so popular that
the practice of quarterly calls survived
the crisis.
WHAT DID.. (CONT…)
Ordered a complete recall of all
products containing apple or carrot
juice
Covered around 4,600 retail outlets in 7
states
Internal task teams were formed and
mobilised
Costing around $6.5m was completed
within 48 hours
WHAT DID.. (CONT…)
Did not 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
allied to the prompt and comprehensive
recall
went a long way towards satisfying
customers that the company was doing all
it could.
WHAT DID.. (CONT…)
Within 24 hours, the company had an
explanatory web site (its first) that
received 20,000 hits in 48 hours
The company spoke to the press,
appeared on TV and carried out direct
advertising with the website address
All possible attempts were made to
provide up to the minute, accurate
information.
WHAT DID.. (CONT…)
Step was to tackle the problem of
contamination
Moved Quickly To Introduce A Process
Called "Flash Pasteurisation" :
Guarantee That E-coli Had Been
Destroyed Whilst Leaving The Best
Flavoured Juice Possible.
the most comprehensive quality
control and safety system in the
fresh juice industry
On December 5, the company brought
back its apple juice.
EFFECTS
Rapid recovery
Good will and trust it had built up over the
years remained
Sales picked up again quite quickly
Company's reputation with its customers.
The father of the girl who died said. "I don't
blame the company" "they did everything
they could"
Theyear 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.
