|Wholly owned subsidiary|
|Founded||Santa Cruz, California, United States (1980)|
|Headquarters||Half Moon Bay, California, United States|
|Steven M. McCormick, COO and General Manager
James R. Steichen, SVP Finance and CFO
Chris Brandt, Director Brand
|Products||Drinks, food bars|
|Revenue||US$187.9 million (2007)|
Number of employees
|Parent||Minute Maid, a division of the The Coca-Cola Company|
Odwalla Inc. // is an American food product company that sells fruit juice, smoothies and food bars. It was founded in Santa Cruz, California, in 1980 and is headquartered in Half Moon Bay, California.
The company experienced strong growth after its incorporation in 1985, expanding its distribution network from California to most of North America, and went public in 1993. A period of decline occurred as a result of a fatal outbreak of E.coli-H7 in 1996 that was caused by using bruised fruit that had been contaminated. Odwalla originally sold unpasteurized juices, claiming that the process of pasteurization altered the flavor of the juice. Following the E.coli outbreak, Odwalla adopted flash pasteurization and other sanitization procedures. Odwalla recalled its juices and experienced a ninety-percent reduction in sales following the event. The company gradually recovered and the following year became profitable again.
Odwalla was founded in Santa Cruz, California, in 1980 by Greg Steltenpohl, Gerry Percy, and Bonnie Bassett. Odwalla's production facility is in Dinuba, California. The trio took the idea of selling fruit juices from a business guidebook, and they began by squeezing orange juice with a secondhand juicer in a shed in Steltenpohl's backyard. They sold their product from the back of a Volkswagen van to local restaurants, employing slogans such as "soil to soul, people to planet and nourishing the body whole".
The name for their start-up, "Odwalla", was taken from that of a character who guided "the people of the sun" out of the "gray haze" in the song-poem "Illistrum", a favorite of the founders, which was composed by Roscoe Mitchell and performed by the Art Ensemble of Chicago jazz group, of which Mitchell was a member. Steltenpohl, Percy, and Bassett related this to their products, which they believe "help humans break free from the dull mass of over-processed foods so prevalent today".
Incorporation – 1996
Odwalla was incorporated in September 1985 after five years of growth and expanded to sell products in San Francisco in 1988. Hambrecht & Quist Inc., a venture capital firm in San Francisco, was one of Odwalla's main investors at the time, investing several million dollars in the company. By 1992, the company employed 80 people at its company headquarters in Davenport, California, and sold around 20 different flavors of juice for between $1.50 and $2.00 a pint. Odwalla went public in December 1993 (NASDAQ:ODWA); the company had 35 delivery trucks, almost 200 employees, and made about $13 million a year. Soon afterwards, Odwalla expanded into new markets when it bought two companies in the Pacific Northwest and Colorado.
Odwalla built a new production facility located in Dinuba, California, in 1994 in order to better meet production demands. The following year, the company moved its headquarters to Half Moon Bay, California.
Continual growth and outside investments during these years allowed the company to expand and grow: Odwalla's revenue tripled from 1994 to 1995, and in 1996 they made more than $59 million in sales, their highest ever. This constant growth made Odwalla one of the largest fresh-juice companies in America by 1996, when the company was selling its products to stores in seven states and parts of Canada. It was estimated that they would reach $100 million in sales by 1999. Much of this growth resulted from the perception that Odwalla's products were healthier than regular juice because of unpasteurization.
1996 E. coli outbreak
|This section requires expansion. (October 2015)|
On October 7, 1996, Odwalla made a batch of apple juice using blemished fruit, resulting in one death and 66 sickened customers. Odwalla made and marketed unpasteurized fruit juices for the health segment of the juice market. This batch was contaminated with E. coli.
Despite a net loss for most of 1997, Odwalla worked to rehabilitate its brand name. In addition to advertising its new safety procedures, Odwalla released its line of food bars (its first solid food product line) and entered the $900 million fruit bar market. Another new product was the Future Shake, a "liquid lunch" aimed at younger consumers. Because of these efforts, Odwalla was again profitable by the end of 1997, reporting a profit of $140,000 for the third quarter.
Having recovered, the company worked to expand geographically into markets like Philadelphia and Washington, D.C., and by the end of 1998 reported that revenue had surpassed pre-crisis levels. Growth continued over subsequent years, in part through the $29 million acquisition of Fresh Samantha, a large juice company based in Saco, Maine, in 2000. This allowed Odwalla to expand into additional East Coast markets, but incurred high transportation costs as products had to be shipped across the United States from California. To address this problem the company announced plans to build a second production facility in Palm Beach County, Florida. However, facing difficulties in obtaining building permits and allocating sufficient funds, the project was first delayed and eventually cancelled. Odwalla produced and sold products under both its own and the Fresh Samantha brand names for a few years; however, in 2003, the company decided to stop selling juice under the Fresh Samantha name and to only sell Odwalla-brand juice.
Odwalla was purchased by the Coca-Cola Company in 2001 for $15.25 a share, a deal which totalled $181 million and was unanimously approved by the Odwalla board of directors. Under the terms of the merger, Odwalla's management stayed on as heads of the company, and it was "folded" into Coca-Cola's Minute Maid department. The acquisition was one of several similar mergers which were aimed at expanding Coca-Cola's product line to include non-carbonated drinks. Odwalla benefited by obtaining up to a 124.3 percent premium on shares of the company, as well as from the stability and strength that ownership by the Coca-Cola Company offered. Odwalla also was able to expand into new markets because of Coca-Cola's well-established distribution network.
Odwalla continued to grow following the acquisition. This growth resulted in part from new product releases, which included a line of PomaGrand pomegranate juice (released at the 2006 Sundance Film Festival), two flavors of energy drinks, and three flavors of "Soy Smart" drinks, which contain soy protein, omega-3 fatty acids, and calcium.
Coca-Cola promoted Odwalla products in 2006 when the company aimed at removing carbonated soda products in schools. Odwalla continued to have good growth in 2007, when Coca-Cola, squeezed by poor growth in its North American markets, issued a company-wide hiring freeze; Odwalla, because of its good performance, was one of the few exceptions to the rule.
Odwalla uses what it characterizes as "fresh-sourced" produce (fruits and vegetables that have recently been harvested) to make many of its products, as well as organic oats for food bars and certain tropical fruits in a frozen purée form, purchased from an outside source and blended with fruit juice. Because Odwalla uses fresh produce, some juices are seasonal. Fruit availability and price is also affected by adverse weather, disease, and natural disasters. Throughout the year, Odwalla juice colors and flavors change slightly because different types of fruit are used.
After the E. coli outbreak, Odwalla improved the safety of several of its production processes. Before the fruit enters the factory, it is washed, sorted and sanitized. Once it has reached the plant, the apples, carrots, and citrus fruits are separated and washed again. The fruit is pressed to get the juice, which is then flash pasteurized and bottled. A sample undergoes quality testing, and, if it passes, the batch is shipped in refrigerated trucks to various distribution centers in the United States. Odwalla juice has a relatively short shelf life compared to other beverages and thus must be refrigerated. However, after the introduction of flash pasteurization in 1996 and a new plastic bottle in 2001, the shelf life has been considerably extended. Generally, Odwalla products are sold in special Odwalla-brand displays at grocery and convenience stores, instead of being intermixed with other products.
Odwalla Inc. produces many flavors of fruit and vegetable drinks, as well as dairy-free soy milk (marketed under the "Soy Smart" name), "PomaGrand" pomegranate juice, "Serious Energy" caffeinated fruit juice, bottled spring water, and Odwalla's Superfood smoothie line of products (see green smoothie), which are viewed as the core products of the company and are made of various fruit purées, wheat grass, and barley grass. These products accounted for roughly 95 percent of Odwalla's revenue in 2001. Odwalla juice is sold in individual 12 fl oz (formerly 450 millilitre or 15.4 US fl oz) bottles made of plant-based recyclable HDPE plastic, as well as larger 64 US fluid ounce (1.9 litre) containers. Odwalla's juice, because of production costs, is "typically sold at prices higher than most other juice products", and the price of the juice can vary over time because of weather or disease affecting the supply of fruit and vegetables.
Throughout its history, Odwalla has produced and subsequently withdrawn various juice flavors due to their lower popularity, including the Odwalla Superfood Amazing Purple, Soy Vanilla, and Pomegranate Mango drinks.
In September 1998, Odwalla began to sell energy bars made with fruit and grains, named food bars, as an alternative to its drinks in an attempt to raise revenue following the 1996 E. Coli outbreak. The first three flavors released were Cranberry Citrus, Organic Carrot & Raisin, and Peach Crunch, all three of which are now discontinued. Within eight weeks of their release, the Odwalla Bar was one of the top-selling energy bar brands in the market. The bars come in a variety of flavors, and weigh 2 ounces (56 grams) per bar. As of 2001, before Odwalla was acquired by Coca-Cola, food bars accounted for less than five percent of Odwalla's revenue.
- "Odwalla Inc. Company Profile". Yahoo Finance. 2008. Retrieved 2008-08-08.
- "Odwalla Inc. 10-K405" (Press release). Odwalla Inc. 1996-08-31. Retrieved 2008-08-20.
- "History". Hoovers.com. 2008. Retrieved 2008-09-06.
- Groves, Martha (1997-01-08). "Juice Left in Odwalla; Company Posts Loss, but Sales and Cash Up Despite Recall". The Los Angeles Times (fee required). Retrieved 2008-09-10.
- "Odwalla: Growwing [sic] Naturally". Beverage Industry. 2006-03-01. Retrieved 2008-08-18.
- Kaufman, Steven B. (February 1994). "Freshness by the bottle — Odwalla Inc.". Nation's Business (BNET). Retrieved 2008-08-07.
- Strassman, Roy, "Drink No Evil" [biographical article on Steltenpohl], common ground; The Bay Area's Magazine for Conscious Community since 1974, July/August 2009, p. 14.
- "Our Roots Go Deep". Odwalla Inc. 2008. Retrieved 2008-08-07.
- Thomsen, Steven R; Rawson, Bret (1998). "Purifying a tainted corporate image: Odwalla's response to an E.coli poisoning". Public Relations Quarterly 43 (3). p. 35. Retrieved 2008-09-08.
- Bianchi, Alessandra (July 1993). "Best Love of Product: True Believers". Inc. Magazine. Retrieved 2008-09-06.
- "Labor Pool". City of Dinuba. Retrieved 2008-08-12.[dead link]
- "Odwalla PomaGrand" (Press release). Odwalla Inc. 2006-03-13. Retrieved 2008-08-07.
- "Quarterly Report Form 10-Q" (Press release). Odwalla Inc. 1997-11-29. Retrieved 2008-08-20.
- Christopher Drew and Pam Belluck (January 4, 1988). "Deadly Bacteria a New Threat To Fruit and Produce in U.S.". New York Times. Retrieved 2008-08-11. Cite error: Invalid
<ref>tag; name "deadly" defined multiple times with different content (see the help page).
- Evan, Thomas J. (1996-07-01). "Odwalla". Public Relations Quarterly. Retrieved 2008-08-19.
- "Juice maker Odwalla, Inc". Food & Drink Weekly. 1998-09-14. Retrieved 2008-08-18.
- Woolfolk, John (1997-05-14). "California-Based Odwalla Inc. Unveils Soy-Based Shakes". Knight-Ridder/Tribune Business News. Retrieved 2008-09-10.
- "Agreement Reached Between Odwalla, Inc. and U.S. Attorney in Fresno, CA." (Press release). Odwalla Inc. 1998-07-23. Retrieved 2008-08-19.
- "Odwalla Inc. 10-K405" (Press release). Odwalla Inc. 1998-08-29. Retrieved 2008-09-10.
- "Odwalla Sales Increase 24%, Fiscal Year 1999 Momentum Continues; Odwalla Enters Atlanta Market As Geographic Growth Continues". Business Wire (BNET). 1999-07-01. Retrieved 2008-08-18.
- "Odwalla Announces Return to Profitability; Odwalla and Fresh Samantha Merger Completed in May". Business Wire (BNET). 2000-07-06. Retrieved 2008-08-18.
- "Odwalla Completes Merger With Fresh Samantha". Business Wire (BNET). 2000-05-03. Retrieved 2008-08-18.
- "Annual Report Form 10-K" (Press release). Odwalla Inc. 2001-09-01. Retrieved 2008-08-20.
- "Odwalla drops Fresh Samantha". Oakland Tribune. 2003-07-30. Retrieved 2008-08-18.
- Salisbury, Susan (2003-08-04). "Half Moon Bay, Calif.-Based Odwalla to End Its Fresh Samantha Juice Line". Knight Ridder/Tribune Business News. Retrieved 2008-08-18.
- Munarriz, Rick Aristotle (2000-11-27). "Odwalla Gets Juiced Up". The Motley Fool. Retrieved 2008-08-11.
- "EX-99.(A)(2) · Letter to Shareholders" (Press release). Odwalla Inc. 2001-11-06. Retrieved 2008-08-20.
- McClam, Erin (2001-10-31). "To juice up its offerings, Coke buys Odwalla". The Seattle Times. Retrieved 2008-08-08.
- Marino-Nachison, Dave (2001-10-30). "Coke Swallows Odwalla". The Motley Fool. Retrieved 2008-08-11.
- "Tucker Anthony Reiterates Buy on Coca-Cola". BusinessWeek. 2001-10-22. Retrieved 2008-08-11.
- Duff, Mike (2002-11-11). "New Age drinks go mainstream: mega manufacturers betting trend is more than passing phase". DSN Retailing Today (BNET). Retrieved 2008-08-18.
- "Odwalla Inc. SC 14D9" (Press release). Odwalla Inc. 2001-11-06. Retrieved 2008-09-15. Under "Reasons for the recommendation of the Board; Factors considered"
- "Getting Serious" (Press release). Odwalla Inc. 2007-11-12. Retrieved 2008-08-07.
- "Healthful Beverages to Watch in 2007". Beverage Industry. 2007-02-01. Retrieved 2008-08-07.
- "New Products from Coca-Cola FoodService" (PDF) (Press release). The Coca-Cola Company. Retrieved 2008-08-13.
- Saletta, Chuck (2006-05-11). "Dueling Fools: Coke Bull". The Motley Fool. Retrieved 2008-08-11.
- "Section of Coke Freezes Hiring". The Atlanta Journal-Constitution. 2008-07-16. Retrieved 2008-10-19.
- "Freshology". Odwalla Inc. Retrieved 2008-08-07.
- Dornblaster, Lynn (1994-04-15). "Beverages turn icy … and steamy - beverage sales - New Food Products Annual - Industry Overview". Prepared Foods (BNET). Retrieved 2008-08-18. Under the "It's Still the New Age" section.
- "Season's Squeezings from Odwalla: 100% Pure Squeezed Tangerine Juice; Now's the Time for Tangerine". Business Wire (BNET). 1999-12-20. Retrieved 2008-08-20.
- "Food Manufacturing Industrial Assessment" (PDF). U.S. Department of Energy. 2002-06-13. Retrieved 2008-08-20.
- "Odwalla Serious Energy". Convenience Store News. 2008-08-25. Retrieved 2008-08-20.
- "Coca-Cola Foodservice Meets Restaurant Operators' Juice Needs with Odwalla, Simply Orange, Minute Maid and More" (PDF) (Press release). The Coca-Cola Company. 2008-05-17. Retrieved 2008-08-13.
- "Good To The Earth - Fresh Juices & Fruits From Natural Ingredients". Odwalla. Retrieved 15 December 2012.
- "Odwalla's PomaGrand Juices". Convenience Store News. 2006-03-13. Retrieved 2008-08-26.
- Toops, Diane (February 2006). "Royal Treatment from Odwalla". Food Processing. Retrieved 2008-08-07.
- "New Products". Beverage Industry. Retrieved 2008-08-07.[dead link]
- "Odwalla Bars". Odwalla Inc. Retrieved 2008-08-12.
- "Odwalla Raises the Bar Again; Chocolate Raspberry and Fruity C Monster Join Odwalla Bar Nourishment Ensemble". Business Wire (BNET). 1999-03-17. Retrieved 2008-09-19.