Odwalla, INC., And The E Coli Breakout

9 Pages 2131 Words

Odwalla, Inc., and the E. Coli Outbreak
In the fall of 1996, Odwalla, Inc. emerged as a leading distributor of fresh juice products. Odwalla believed that the avoidance of heat treatment and artificial ingredients, including preservatives, in the bottling process maximized the retention of vitamins, enzymes, and the flavor of fresh fruits and vegetables. Their approach contributed to the company’s growth and success, but may have also been responsible for an outbreak of E. coli. This paper explores the options Odwalla examined and the ultimate decisions the company faced in three key areas during this crisis.
Background
Odwalla began as a small company when Greg Steltenpohl and two associates started delivering fresh squeezed orange juice to restaurants in 1980. Between 1980 and 1995 Odwalla expanded by acquiring other juice companies and increasing distribution capacity. Additionally, they expanded their product line by including additional juice products and creating new blended juices. In 1993, Odwalla became a publicly held company, which enabled their continued expansion.
The “Odwalla” name was derived from a jazz composition which led to their “Odwalla vision – Odwalla, a breath of fresh intoxicating rhythm, living flavor, soil to soul, people to planet, nourishing the body whole.” In harmony with its vision, Odwalla marketed its juice as “fresh” whereby the products have no preservatives or artificial ingredients, and are not pasteurized (heat treated to kill microorganisms and to extend shelf life). Odwalla juice products were distributed from varied outlets including supermarkets, warehouse outlets, specialty stores, natural food stores, restaurants and colleges. Odwalla relied on their direct store distribution system to ensure their products’ are fresh. Most outlets were equipped with a stand-alone refrigerated cooler, and route sales people (RSPs) serviced the accounts. The RSP was respons...