CRISIS MANAGEMENT Lessons in brand resilience

taken from Odwalla Inc.

Shaer AhmedTaki DaLlisAdam WardMark HendersonSTAM CONSULTING

ACT FIX

TALKCREATE

who?Organic juice company30% Annual growth

Projected sales of $90 million

Expanding distribution

OCTOBER 16, 1996 : Anna Gimmstead, a 16 month year old child, was rushed to the emergency room

…She died 23 days later

TIMELINE Oct 30 : Odwalla is alerted to E-Coli link Company issues recall of all apple juice products

Oct 31 : Odwalla hires PR Firm FDA launches 14 month investigation

Nov 1 : Odwalla expands recall to include carrot juice & pledges to pay medical bills of injured Launches website (1st)

OF THE CRISIS

ACT

ACTTwo websites created in span of 4 days

Completed a full recall in 48 Hrs

Three task teams formed to respond

TIMELINE Nov 2 : Recall is completed (less than 48 hrs) Odwalla issues a press realease

Nov 3 : Odwalla launches a another website (2nd) Defends sanitation process in the media

Nov 4 : FDA confirms E-Coli link to Odwalla’s Dinuba plant Odwalla responds with press conference

OF THE CRISIS

TALK

TALKCore management team met every 15 MinDaily Conference calls were held with CEO

INTERNAL

TALKCommunication with the press was

ConstantHotlines were created to answer questions

Coolers were updated with public notes

EXTERNAL

FIX

FIXAccepted blame and apologized

Customers were reimbursed

Investigated flash pasteurization process

TIMELINE Nov 5 : Odwalla announces potential new heat pasteurization process

Nov 8 : Anna Gimmstead Dies. Odwalla finds no E-Coli at Dinuba plant

Nov 19 : FDA finds no E-Coli at Dinuba plant

OF THE CRISIS

CREATE

CREATEDeveloped a flash pasteurization process

Organized a crisis management plan

COSTOF THE CRISIS

One death and 60 sick

Sales plummeted by 90% and stock price fell by 34%

More than 20 personal lawsuits filed

$1.5 Million in fines paid

RecoveryFROM THE CRISIS

Voted best San Francisco business 1 year later

Retained 80% of customer base 1 year out

Became nations #1 fresh fruit distributor

“ Odwalla didn’t survive by accident.”- Stephen

Williamson CEO, Odwalla Inc.

ACT FIX

TALKCREATE

Q & A

TIMELINE Oct 30 : Odwalla is alerted to E-Coli link Company issues recall of all apple juice products

Oct 31 : Odwalla hires PR Firm FDA launches 14 month investigation

Nov 1 : Odwalla expands recall to include carrot juice Pledges to pay for medical bills of injured Launches website (1st)

Nov 2 : Recall is completed (less than 48 hrs) Odwalla issues a press realease

Nov 3 : Odwalla launches a another website (2nd) & Defends sanitation process in the media

Nov 4 : FDA confirms E-Coli link to Odwalla’s Dinuba plant Odwalla hosts a press conference in response

Nov 5 : Odwalla announces potential new heat pasteurization process

Nov 8 : Anna Gimmstead Dies. Odwalla finds no E-Coli at Dinuba plant

Nov 19 : FDA finds no E-Coli at Dinuba plant

OF THE CRISIS

Works Cited Layne, A. (2007, December). How to Make Your Company More Resilient. Fast Company. Retrieved from http://www.fastcompany.com/articles/2001/03/odwalla.html

Sellnow, Timothy L., Ulmer, Robert R., Seeger, Matthew W., Littlefield, Robert. Effective Risk Communication: A Message Centered Approach. 1st edition. New York: Springer, 2009. Print.