Odwalla Memo

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DATE: September 4, 2008
TO: Stephen Williamson, President and Chief Operating
Officer, Odwalla, Inc.
SUBJECT: Addressing Contaminated Juice Products

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Odwalla, Inc., a health-conscious juice producer, must confront implications that its apple juice product is contaminated and has possibly caused several outbreaks of the E. coli virus. It is a truly unfortunate situation when product contaminations occur and especially inopportune when customers experience sickness as a result. These situations can destroy customer confidence; however, a properly executed communication strategy will allow Odwalla to maintain relationships with consumers, save the brand value, and preserve consumer loyalty.

Facts of the Case

1.Odwalla, Inc., a company worth nearly $400 million, has grown steadily with annual sales rising to $59 million in 1996 2.Approximately 66 people report sickness and 1 child dies as a result of consuming Odwalla juice products 3.On October 30, 1996, the Washington State Department of Health informs Odwalla, Inc. about a possible link between the Odwalla apple juice products and several cases of E. coli

Critical Issues

Among Odwalla’s most significant assets are its’ strong customer loyalty and brand recognition for offering “all natural” juice products. Because the company’s core competence centers on the all natural production process and the idea of “nourishing the body whole”, it is perceived to offer a high quality product. Therefore, the perception that Odwalla is distributing contaminated juice products into the marketplace could cause much consumer distress and negative impact on the brand image.

The situation at hand is directly related to the exponential rate in which Odwalla has grown throughout the years. The focus on quality has been replaced with an emphasis on quantity, leaving the production process...
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