Sales dropped 90% Odwalla’s stock price plummeted 34% customers filed more than 20 personal-injury lawsuits and a grand-jury investigation threatened to rupture the tight-knit community of some 500 Odwalla employees.
coli contamination and of consumers’ illnesses had spread across the United States. Within 48 hours, the $6.5 million recall was completed.īy the time the link was confirmed by health authorities on November 5, news of the E. coli link remained uncertain, Williamson ordered a complete recall of all products containing apple or carrot juice from 4,600 retail outlets in seven states and British Columbia. Odwalla’s Cinderella story ended abruptly on October 30, 1996, when the State of Washington Environmental Health Services notified Williamson of a possible epidemiological link between several cases of E. “We were sourcing, squeezing, mixing, blending, bottling, shipping, and delivering our products to more retailers and more consumers every day.” “Managing Odwalla’s rapid growth was challenging but exhilarating,” Williamson says. While competitors like Snapple teetered on the brink of bankruptcy, Odwalla was reaping the profits of its strong brand and customer loyalty.
Odwalla was growing by about 30% a year and was expanding distribution into the Pacific Northwest, the Rocky Mountains, Texas, and southern California. coli crisis, the company projected 1996 sales of $90 million. When Williamson joined the company in March 1991, Odwalla’s annual sales totaled $6 million. In 1992, Steltenpohl moved the company’s production facility from the seaside hamlet of Davenport to California’s fertile Central Valley, where Odwalla thrived by creating juice concoctions like “C” Monster, Mo’ Beta, and Femme Vitale. Within eight years, the motley crew had incorporated Odwalla, named for a musical piece performed by the Art Ensemble of Chicago, and expanded its juice distribution through Silicon Valley and into San Francisco. Odwalla (pronounced “odewalla”) sprouted from the back of a 1968 Volkswagen van in Santa Cruz, California 21 years ago, when now chairman Greg Steltenpohl and friends Gerry Percy and Bonnie Bassett began squeezing fresh oranges on a $200 hand juicer. none of which should suggest that Williamson, Odwalla, or its 750 employees have forgotten the 1996 tragedy or the lessons learned about resilience. The nation’s number-one fresh-juice distributor, Odwalla has entered the soy-milk and energy-bar markets, upgraded its production facilities significantly, and purchased Maine’s Fresh Samantha Inc.
Today, the company is healthy, growing, and profitable. “Then a little girl named Anna died from our apple juice, and Odwalla’s world changed forever. “Our vision statement is about nourishing the body whole, yet people were getting sick from our product,” says Williamson, 42. Key employees quit, sales plunged, and the will to fight wavered as Odwalla - and Williamson himself - faced the ultimate setback.
In the span of one week in late 1996, Williamson found himself at the center of a human tragedy and a business crisis that could have destroyed Odwalla, a company built around its commitment to healthy products. When 16-month-old Anna Grace Gimmestad died 10 days later from drinking the contaminated juice, he almost wished that his company would just surrender and collapse. coli in Washington State, he feared that his company would never recover. CEO Stephen Williamson learned that his company’s apple juice had been linked to a strain of deadly E.
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