Crisis Management - Odwalla

By : RAHUL GUPTA MBA (G) AMITY BUSINESS SCHOOL PH: 09807885800

CRISIS MANAGEMENT

ODWALLA

INTRODUCTION 

Manufactured : Health-conscious Juice



 Founders  

 U.S.

BASED

: Greg Steltenpohl Gerry Percy Bonnie Bassett

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"

 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.