“Washington state health officials confirmed a link between a local E.coli outbreak and Odwalla’s unpasteurized apple juice. One child died and more than 60 people became sick, prompting more than 20 lawsuits.”
Odwalla responded quickly by recalling all Odwalla products having apple or carrot juice in it. Which cost the company around $6.5 million. CEO Stephen Williamson took the responsibility when he spoke with the media and promised to pay the medical cost for the people who were affected by the outbreak.
“Daily press briefings by Odwalla were used to update the public, along with a full-page newspaper ad and a website explaining the situation.”
This entire situation hurt the company publicly and financially. I feel this company had a hard decision to make about whether or not to terminate the products for good, or continue to sale the products and determine what contaminated the products.
“The company had faced its worst-case scenario: death caused by one of its food products. Odwalla lost a third of its market value by the time everything subsided, and pled guilty to criminal charges relating to the outbreak, which resulted in a $1.5 million fine from the FDA.”
But Odwalla continued to fight. It focused on customer relations in the months following, attempting to rebuild trust. Odwalla fixed the contamination issue and improved its quality control and safety system.
Odwalla re-launched its apple juice two months later. In 2001, Coca-Cola bought Odwalla for $186 million.
Overall I believe Odwalla made the right decision to admit their mistake, take a stands, and fix the problem. I would have did exactly the same.
Read more at Business Insider