Odwalla is a healthy food and drink American multinational company. An incident occurred in 1996 due to the unpasteurized apple juice of the brand Odwalla, and it resulted in the form of one casualty and infecting 70 people. It had a great negative impact on the company’s reputation and its operations, but the company managed to pass a crisis event. Today, we’ll discuss Odwalla Foods crisis management; the crisis incident; the impact, and the strategic approach of the brand to deal with the situation in Odwalla crisis management.
Crisis Incident of Odwalla Foods
The US Food Health and safety department informed the Odwalla Foods company about the outbreak and presence of the E.coli O157: H7 bacteria in the batch of fresh apple juice of Odwalla manufactured on October 07, 1996. However, the test report came out on November 05, 1996, and it confirmed the suspicions that the outbreak of the virus happened due to the highly decayed and rotten apple fruit.
Prior to the incident, the FDA’s team had already inspected the production facilities of the company within 3 months. In fact, the company’s health and testing supervisors weren’t also aware of the presence of the E.coli bacteria and its growth among the particular bached juices.
Odwalla used to market its market and promote its juices as fresh and unpasteurized. Pasteurize is a method of preserving packed and unpacked food items with a mild heat of approximately 100 degrees centigrade. The heating removes pathogens and other harmful elements and increases the shelf life of the products.
Impact of the Incident
The company hospitalized 14 children, 60 people became sick, and the death of one 16-year-old girl Anna Gimmestad. As a result, 16 criminal lawsuits were filed against the company; Odwalla accepted the charges and pleaded guilty; and paid the fine of 1.5 million US. However, the company donated 250000 USD for the research project to avoid and prevent food-borne illnesses. By the early 2000s, Odwalla settled most of the cases with the victim’s facilities by a total of 12 million USD.
The whole food crisis and bacterial outbreak incident dropped the company’s stock price by 40%; sales decreased by 90%. By the end of the year, the company experienced accumulated losses of 11.3 million USD.
Strategic Approach of Odwalla Foods Crisis Management
Some of the main strategic approaches of Odwalla Foods’ crisis management to deal with the incident are as follows;
Product Recall
As soon as the food brand Odwalla became aware of the incident and outbreak of the E.coli bacteria. The company immediately ordered both contaminated and non-contaminated juices across 4600 retail stores in 7 states of the US. The whole product recall process was completed within 48 hours by mobilizing trucks and other modes of transportation and it incurred the cost of 6.5 million USD.
Open Internal Communication Channel
The company launched massive internal communication meetings and conferences internally at different levels of the organization. The objective was to develop a comprehensive communication plan, find out the reasons behind the incident, and how to manage the crisis event. However, it became so popular that many businesses and companies followed the same approach during the critical event.
Took Responsibility for Crisis Incident
In a TV interview, Williamson took full responsibility for the tragic incident and showed its deepest regrets and apologies to the public at large. He agreed to pay the medical billing cost of all the victims and affected people. He also assured people that he was taking all the necessary steps to protect the interests and safety of customers.
Multiple Media Channels
Odwalla introduced a multiple media channel campaign strategic approach. The company website received approximately 20,000 visits within 24 hours; and conducted press conferences, TV advertisements, interviews, and other media channels to inform people about the incident. However, the brand also ensured people that Odwalla is taking all the necessary steps to make sure the food safety of its users and customers.
Flash Pasteurization
The thing about the pasteurization method is that it also removes healthy nutrients along with eliminating dangerous bacteria. Odwalla introduced the flash pasteurization technique that removes E.coli bacteria without jeopardizing the taste and flavor of its juices and healthy products.
Rebuilding Brand Image
Along with apologizing, taking responsibility, and developing safe products; Odwalla launched various types of massive brand-rebuilding PR (public relations), marketing, and advertisement campaigns. It allowed the company to effectively manage the crisis event and rebuild its brand image as a healthy brand that gives top priority to the food and safety of the customers.
One year after the incident, Odwalla received the recognition of “Best Brand in the Bay Area” by the San Francisco Magazine. It showed that the company’s brand-rebuilding strategic campaigns were working and it was moving in the right direction.
Conclusion: Odwalla Crisis Management | Strategic Crisis Management Case Study of Odwalla Foods
After an in-depth study of the Odwalla Foods crisis management; we have realized that Odwalla is the world’s leading food and beverage brand. If you are learning about the Odwalla crisis management; then you should keep in mind the abovementioned crisis incident, its impact, and the food brand’s strategic approach to deal with the incident.
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