Odwalla

Odwalla Case

1. What factors contributed to the outbreak of E. coli poisoning described in this case? Do you believe that Odwalla was responsible, wholly or in part, for the outbreak? Why or why not?

There are three factors which contributed to this incident.

First, the defect in its technology resulted in the outbreak of E. coli poisoning. Resisting industry safety standards, Odwalla steadfastly refused to pasteurize its juices claiming it altered taste and was unnecessary. Unpasteurized juice, the company believed, retained more vitamins, enzymes, and “flavor notes” of fresh fruits and vegetables.

Second, Odwalla had significant flaws in its safety procedures and citrus-processing equipment which were so poorly maintained that it was breeding bacteria in “black rotten crud”. In addition, Odwalla apple juice had a pH level of 4.3, and the Journal of the American Medical Association concluded that E. coli O157:H7 could survive at a pH below 4.0 at the temperature of refrigerated juice.

Third, the lower-efficient feedback was one of the most important causes of the E. coli poisoning outbreak. The year before the incident, Odwalla had received letters from customers who became violently ill, but had not addressed the problem. Besides, as Mallen (2008) reported,

The head of quality assurance, Dave Stevenson, who was aware of the dangers, proposed using chlorine rinse as a backstop against bad fruit. Senior executives who feared chlorine would leave an aftertaste overruled him. They decided to rely on acid wash although its chemical supplier had informed Odwalla that the wash had killed the E. coli in only 8 percent of tests and should not be used without chlorine.

Seeing from above-mentioned information, some ethical issues appeared. Such as whether Odwalla’s products should be recalled as soon as possible after this incident; whether Odwalla should follow the suggestion of utilizing pasteurization, and whether Odwalla should discharge workers to cut down budget when crisis happened.

From beginning until right now, Odwalla kept its own principles of thinking over the benefits of stakeholders in mind all the time. The more quickly Odwalla recalled its products, the less harm would be brought about in the end. Although the recall involved 13 products, all containing unpasteurized apple juice, which accounted for about 70 percent of Odwalla’s sales, Odwalla put the health and safety of those affected in their first concern. Besides, Odwalla was committed to making a totally product. They believe that fruits, vegetables and other botanical nutrients must be treated with respect. As a result, Odwalla refused to pasteurize its juices claiming that would alter taste and be unnecessary. Yet, the year before the incident, the head of quality assurance, Dave Stevenson, who was aware of the dangers, proposed using chlorine rinse as a backstop against bad fruit. Senior executives who feared chlorine would leave an aftertaste overruled him. They decided to rely on acid wash although its chemical supplier had informed Odwalla that the wash had killed the E. coli in only 8 percent of tests and should not be used without chlorine ( “Companies in Crisis”, 2008). In addition, Odwalla didn’t discharge workers under that circumstance because of their corporate social responsibilities. Every single person worked that first full day and the next. The recall was completed within 48 hours because of all the workers’ efforts. Odwalla’s positive reaction gave confidence to both the company and its stakeholders. Of course, the biggest benefit it received from its behavior is the invaluable reputation.

We believe Odwalla was responsible for the outbreak of E. coli poisoning, but only partly.

Odwalla is responsible for the outbreak of E. coli poisoning

The company’s products were made without preservatives or any artificial ingredients, and the juice was not pasteurized. Although this kind of unpasteurization retained more vitamins, enzymes and “flavor notes” of fresh fruits and vegetables, it also brought potential danger to people’s health. Without pasteurizing, it was very difficult for Odwalla to kill any harmful bacteria and pathogens. Besides, as the Journal of the American Medical Association reported, E. coli could survive at a Ph below 4.0 at the temperature of refrigerated juice. So, in our opinion, I think whether using pasteurization was more or less related to outbreak of E. coli. After all, people are more likely to die from pathogen infection instead of from lacking of one bottle of vitamin.

Odwalla is not responsible for the outbreak of E. coli poisoning

First, usually, the E. coli poisoning was caused by mistakes in food preparation and in handling, not by mistakes in food processing or packaging. Looking at the product line, Odwalla was committed to making a totally fresh product. Although it didn’t pasteurize its juice, Odwalla took many steps in the manufacturing process to assure the quality and purity of its product. To avoid possible contamination, the company didn’t accept ground apples, only those picked from the tree. They did this in order not to contaminate apples from coming in contact with cow or deer manure. Inspectors checked field bins to see if there was any dirt, grass, or debris; and bins with evidence of ground contact were rejected. Odwalla’s manufacturing facility in was considered the most advanced in the industry. The plant operated under a strict code of Good Manufacturing Practices. All juice was produced under extremely strict hygienic standards.

Second, although the Food and Drug Administration investigated both instances in New England, it didn’t issue any new regulations requiring pasteurization of fresh juice, nor did it issue any advisories to the industry. At the same time of the Odwalla outbreak, neither the FDA nor state regulators in California had rules requiring pasteurization of fresh apple juice.

2. What do you believe Odwalla should have done as of October 30, 1996, as of late November 1996? In each instance, please list at least three options and state the arguments for and against each.

October 30, 1996

Discontinue all apple juice products. In this scenario, the company would eliminate all apple juice and blended juice products until they could be fully assured of their safety.

ProsпјљIt was efficient for Odwalla to react to public