Purifying a tainted corporate image: Odwalla’s response to an E. Coli poisoning
Thomsen, Steven R
Our objective, our passion, is to lead the fresh beverage revolution,” wrote Odwalla co-CEOs Greg Steltenpohl and Stephen Williamson in their December 1995 letter to the natural juicemaker’s shareholders. “We believe there is an important category of super premium fresh beverages emerging, and it is our mission to be the leader in that category” (Odwalla Annual Report, 1995).
Steltenpohl and Williamson may have had good reason for their unbridled optimism. In 1995 their company had tripled its earnings from the previous year and was experiencing its largest period of growth in its 15-year history. Since its founding, the company had successfully expanded into the Western, Pacific Northwest, Southwestern, and Mountain States regions of the United States and into Western Canada (Odwalla Annual Report, 1995). When the pair of Odwalla leaders wrote that letter, however, little did they know that their greatest asset would soon become their biggest liability.
Founded in September 1980 in Davenport, California, Odwalla capitalized on one of the most popular beverage trends sweeping the United States and Canada — gourmet natural fresh fruit and vegetable-based beverages (Groves,1997). Unlike many juicemakers, however, Odwalla did not pasteurize or heat-treat its juices in the production process. Heat-treating, the company’s literature claimed, removed both flavor and nutrients. To preserve the “naturalness” of its drinks, Odwalla relied on a process that kept the juices cold during production through the entire distribution process (“Trendy juice company,” 1996).
It was this distinction that became the company’s identity and a theme that was continually played up in marketing and sales literature (“Trendy juice company,” 1996) as well as on its World Wide Web page.l This was all a part of appealing to a youthful, upscale market. In fact, the very name of the company, which now has its corporate headquarters in Half Moon Bay, California, reflects this focus. When Steltenpohl and two longtime friends founded the company, they envisioned it simply as a means of funding the presentations they were making at local schools and cultural events to educate people about environmental issues and cultural diversity. The name “Odwalla” came from one of Steltenpohl’s favorite musical pieces performed by the Art Ensemble of Chicago. Its first products were delivered in Volkswagen vans (Groves, 1997).
Despite, or perhaps because of, its quirky beginnings, Odwalla products quickly became popular. By 1992, the company had 80 employees and, the following year, made its first public stock offering.2 Odwalla continues to cultivate this trendy, “hip” identity in many ways. Among other things, it maintains a fleet of trucks fueled by compressed natural gas, sponsors “Bike to Work Day,” makes regular donations to schools, and has even named one of its most popular drinks the “Femme Vitale.”3 The company’s vision statement describes the company as a “breath of fresh intoxicating rhythm” and indicates a commitment to “nourishing the body whole” (Odwalla Annual Report, 1995).
What the company did not envision was a series of events that would unfold in the fall of 1996 and that would link its products to the death of a 16-month-old Colorado infant and to more than 60 illnesses in Washington state’s King County, California, Colorado, and Vancouver, British Columbia (“Unpasteurized apple juice,” 1997). What it would learn was that while its cold processing could guarantee freshness and naturalness it could not protect the final products from the dangers of e. coli. Only pasteurization could do that. What had been so important to the company’s identity was now publicly perceived as a threat to the health and lives of its customers. To survive, Odwalla would have to reinvent itself.
As Odwalla learned, image and reputation are critical to a company’s survival, particularly for those that produce food and beverage products. But Odwalla was certainly not the first company to find itself in a situation requiring an apologic response, a genre of speech that occurs when an organization is forced to reduce guilt for failing to perform up to expected standards or when its very integrity or reputation as been challenged (Downey, 1993; Benoit, 1995a). Sears, for example, was forced to rebuild customer confidence after its automotive service centers were accused of overcharging customers and performing unneeded repairs (Benoit 1995b). In one of the most widely publicized cases in recent years, Johnson and Johnson successfully repaired the image of Tylenol after learning that several people had been poisoned by packages of the pain reliever that had been tampered with (Benoit & Lindsey, 1987).
Using Benoit’s (1995a) typology of image restoration strategies as a theoretical framework, this essay will analyze and critique the strategies utilized by Odwalla in press releases, official statements to the media, and presentations made during government hearings in late 1996 and early 1997 as the company attempted to rebuild and restore its image after it was learned that several of its apple-based juiced products had been contaminated with e. coli 0157:H7. The implications of this analysis for public relations scholars and practitioner strategists also will be discussed.
Image Restoration Strategies
Traditionally, apologic criticism has focused on reactive statements or speeches made by individual actors, often in the political arena, who have been personally challenged or attacked (Downey, 1993; Brummett, 1981; Benoit, Gullifor, & Panici, 1991; Ling, 1970; R. King, 1985). A growing number of scholars have expanded this genre to include “symbolic speech” which would include the “things” an organization does to increases its chances of “being heard” (Becker, 1971; Foss, 1984; Hearit, 1995; Benoit, 1995a). Foss (1984), for example, has suggested that individual or organizational behavior, particularly in response to confrontation, can be interpreted as a message-laden act. Public relations behaviors and strategies, under such a broad definition, can be viewed as symbolic speech formed in response to a need for image redemption, reconstruction, or maintenance (Hearit,1995).
In his discussion on corporate rhetoric, Hearit (1995) draws from social legitimacy theory, which argues that an organization’s continued existence is contingent upon its ability to receive support or approval from shareholder audiences or constituent communities important to the organization. A crisis situation, an attack on credibility, or involvement in an allegedly illegal act threatens an organization’s ability to prevent social sanction and forces that organization to engage in reparative behavior and communication. Hearit argues that a primary motivation for corporate apologia is re-legitimation, as the organization seeks to distance itself from the act or behaviors threatening sanction and to re-establish a link to values of importance to shareholder groups creating pressures in the social environment.
An apologia is not an apology (though it may contain one); rather it is a response to a social legitimation crisis in which an organization seeks to justify its behavior by presenting a compelling counter account of its actions. (Hearit, 1995, p. 3)
Benoit’s Theory of Image Restoration Discourse
Building on the work of Ware and Linkugel (1973), Burke’s (1970) discussion on guilt, and Scott and Lyman’s (1968) “accounts” approach to self defense, Benoit (1995a, 1995b) has developed a typology of image restoration strategies that include: denial, evasion of responsibility, reduction of the offensiveness of the act, corrective action, and mortification.
Benoit suggests two approaches to denial. First, as suggested by Ware and Linkugel (1973), the accused can disavow involvement in the act or deny that the act ever occurred. The second approach involves “victimage,” or placing the blame on a scapegoat (Burke 1970). “If the audience accepts that another is to blame,” Benoit (1995b) writes, “the accused’s image should be restored” (p. 90).
Evasion of responsibility provides four possible tactics. The accused may claim that the action is a reasonable response to a provocation from another party. A second means of evasion of responsibility is “defeasibility” (See Scott & Lyman, 1968), in which the “accused claims to have lacked information or control over important elements in the situation that creative the offensive act” (p. 90). Other approaches within this category include claiming that the wrongful act was an accident or that the individual was acting with good intentions unaware of the unforeseen negative outcome. “People who do bad while trying to do good may not be blamed as much as those who mean to do harm” (Benoit, 1995b, p. 91).
Reducing the offensiveness of the act comprises six tactics. “Bolstering” is a strategy in which the accused seeks to re-identify himself, or itself, with values that are viewed favorably by the audience. While bolstering seeks to change the way the audience views the accused, “differentiation” seeks to change the way in which the audience views, interprets, or assigns meaning to the act – from the new perspective, when new information is revealed, the act no longer seems as bad or can be excused in light of the new understanding of the circumstances. “Transcendence,” a third tactic, seeks to eliminate blame or guilt by transforming the context in which the audience constructs the act by moving away from specific details to a more abstract focus. The tactic often involves changing or reframing the focus of the problem so that it may no longer appear to be about the specific actions of an individual company but rather a broader problem faced by an entire industry or society. Other tactics in this category include seeking to minimize the negative feelings an audience might have by attempting to persuade them that the act was not nearly as offensive as originally assumed, attacking the credibility of the accuser, and compensating or providing restitution in some manner (financial, services, etc.) to the victim or victims.
The fourth category of the typology is corrective action, which involves promises to repair damage or to prevent future occurrences of the egregious act or behavior. Benoit (1995b) suggests that Tylenol’s introduction of tamper-resistant containers for its products is an example of corrective action, even though Johnson and Johnson never admitted responsibility for the tampering crisis. Benoit (1995b) explains, “When those accused of wrongdoing demonstrate their willingness to correct or prevent recurrence of the problem, their reputation may improve” (p. 92).
The final category, mortification, requires the accused to take responsibility for the action and to issue an actual apology. In a sense, the accused confesses, admits guilt, and seeks forgiveness from those that have been harmed or offended. “If we believe the apology is sincere, we may chose to pardon the wrongful act” (Benoit, 1995a, p. 79).
While an individual or organization may employ any one of these strategies in an attempt to restore reputation, Benoit (1995b) suggests that multiple image repair strategies are most frequently used. Each strategy has its greatest effect under certain circumstances. If the organization or individual were falsely accused, Benoit (1995b) explains, denial might be an effective initial approach. Once the accused has established his innocence through denial, bolstering may still be required to repair residual effects of damage to his reputation. Mortification, for example, might be used to precede corrective action.
Benoit (1995a) has suggested a multi-step approach for critics wishing to apply his theory of image restoration as a means of analyzing and critiquing attempts by individuals or organizations to restore and rebuild damaged images and reputations. The process, he explains, begins by assembling defensive utterances made by the organization and its actors. This should include information relevant to understanding the background and context in which the utterances occurred. Using the typology of image restoration strategies, the critic then categorizes the defensive utterances and evaluates them in terms of their appropriateness in countering the attack or reducing the guilt. The evaluation should consider the appropriateness given the apparent audience, its perceptions, and likely reactions. Benoit also suggests that critics should complete the analysis by seeking additional evidence to indicate whether desired effects of the image restoration strategies may have occurred.
Analysis of Odwalla’s Apologic Discourse
In this section, we analyze Odwalla’s attempts at restoring and reinventing its image. In this analysis, the authors work from the organization’s perspective. As suggested by Benoit (1995a), we have considered the rhetorical problem from the perspective of Odwalla and the context within which it has occurred. In our analysis, we use the “clues” provided by press releases, speeches, and public proclamations made by Odwalla representatives to construct an interpretation of how each act or statement was intended as a strategic, goal-directed response to the exigencies at hand. In addition, we offer our analysis of how specific audiences may have been affected by these image restoration attempts. We examine Odwalla’s responses to the crisis chronologically, beginning with the first statements made only hours after the company was contacted by the FDA through press releases issued in February 1997. It is our contention that Odwalla effectively employed a strategy that consisted of corrective action, compensation, defeasibility, bolstering, and, in the final stages of the crisis, transcendence.
The Crisis Unfolds
On Oct. 16, 1996, Anna Gimmestad was admitted to Children’s Hospital in Denver. The 16-month-old girl had become severely ill after drinking a “smoothie” made with Odwalla apple juice (“Tot may be first,” 1996) . In the days that would follow, she would go into both cardiac and respiratory arrest and suffer from severe kidney problems before finally dying Nov. 8. The doctors said she died from hemolytic uremic syndrome, a known complication of e. coli 0157:H7 (“Tot may be first,” 1996).
More than 1,300 miles away, officials at the Seattle-King County Department of Public Health were perplexed by an outbreak of 27 cases of e. coli poisoning – that number would more than double in the weeks to come (“Odwalla recalls two,” 1996). One of the severely ill there was a 2 1/2-year-old girl (W. King, 1996a). Soon reports of other poisonings would come in from California and Vancouver, British Columbia.
By late October health officials in these areas suspected the common thread was Odwalla apple juice that had apparently been tainted by e. coli 0157:H7, a microbe that lives within the intestines of cattle and spreads to humans via fecal contamination of food (“Apple juice may be linked,” 1996). Common symptoms include severe stomach pain and bloody diarrhea (“Odwalla recalls two,” 1996). In young children the bacteria can cause brain damage and death. On Oct. 30, Odwalla management was notified of these suspicions by the Washington State Environmental Health Services.
Less than 24 hours after being notified by the FDA that an epidemiological link existed between the e. coli outbreak and Odwalla apple juice products, the company initiated a recall of potentially affected beverages (“E. Coli 0157:H7 outbreak,” 1996). On Oct. 31, the FDA issued a press release emphasizing that the recall was a “voluntary” effort by Odwalla and that the juicemaker was completely cooperating with government inspectors and researchers (“E. Coli 0157:H7 outbreak,” 1996). Odwalla recalled not only its pure apple juice but also 12 other juice products that contained some apple juice. The following day, Nov. 1, the company issued a press release from its Half Moon Bay headquarters announcing that carrot and vegetable cocktail also were being included in the recall (“Update concerning Odwalla,” 1996).
On Nov. 2, Odwalla issued its next press release announcing that the “voluntary” recall had been completed. The press release’s lead paragraph emphasized that Odwalla products had been removed from the shelves of 4,600 retail outlets in seven states and British Columbia (“Odwalla completes recall,” 1996). The goal of the release may have been to reinforce the company’s quick, voluntary action and its concern for its loyal customer base. Steltenpohl was quoted to this effect: Our overwhelming concern over the last couple of days has been for the health and safety those who drink our juices. We are very pleased that we’ve been able to pull our product from nearly every shelf and have been able to get the word out to our customers. (“Odwalla completes recall,” 1996)
Odwalla’s strategy in the first days of the crisis was to take quick corrective action and to bolster the company’s image. Although Benoit (1995a, 1995b) does not specifically list product recalls in his description of “corrective actions,” such an approach is consistent with the intended effect of such actions. Odwalla had built its reputation as a “nourishment” company interested in health and nutrition and genuinely concerned about the wellbeing of its customers. By emphasizing the “voluntary” nature of the recall, Odwalla bolstered its image as a company that would put customers’ health and well-being ahead of profits – a company willing to do the right thing regardless of economic consequences. Steltenpohl’s statements focused on safety and concern, values important to customers who now feared for their own well-being and the well-being of their children. The strategy may have been prompted by public recollections of the previous e. coli scare involving tainted hamburgers sold by Jack in the Box restaurants in the Pacific Northwest. The fast-food chain had been publicly criticized for its slow response to that crisis (“E. coli spread,” 1997; Kokmen,1996).
In a series of articles appearing Nov. 3 in Seattle newspapers, Odwalla executives defended the company’s sanitation and preparation processes since their defense now suggested that the company had acted on information and utilized procedures widely regarded to be state of the art (W. King, 1996c). In a Seattle Times article, Steltenpohl enumerated the precautions taken by the company to guard against contamination. Those safeguards included plant inspections, cold temperature storage, the use of phosphoric acid and whirling brushes to scrub apples, the use of hydrogen peroxide to sterilize apple presses, post-processing tests of the juice for bacteria, yeast and mold, and thorough sanitation of all plant equipment once a week when facilities are not in operation (W. King, 1996c). In a related article, Steltenpohl said the company had acted on information from industry experts in its belief that the high acid levels of apple juice would kill e. coli bacteria.
What we were advised through industry (experts) was that we had a safe level. We didn’t test for e. coli…. Because we believed evidence showed it was not found at that (acid) level. (W. King, 1996c)
Steltenpohl was relying on both “good intentions” and “defeasibility” as a means of responsibility evasion. Odwalla, he explained, acted in good faith on the best available information about the juice-making process. The company lacked the “new” information that now suggested that the acid level of apple juice may not be capable of killing the e. coli bacteria. Odwalla and other juice makers, he argued, just didn’t know. The article, nonetheless, challenged this as a legitimate defense, quoting at least one physician and medical researcher who insisted that it was widely known that e. coli 0157:H7 bacterium are “quite acid tolerant” (W. King, 1996c).
For the first five days of the crisis, the evidence linking Odwalla to the e. coli poisonings in Colorado and Washington State had only been anecdotal. On Nov. 4, at a press conference held jointly with the FDA, the Washington State Department of Health, and the Seattle-King County Department of Public Health, Odwalla confirmed that juice samples from the company’s Tukwila, Washington, distribution center had tested positive for e. coli 0157:H7 bacteria (W. King, 1996d). “We are relieved that we are making progress in determining the source of the mystery, and therefore, getting closer to a manufacturing solution,” Odwalla CEO Stephen Williamson said at the press conference (“Odwalla confirms FDA finding,” 1996). Williamson emphasized that Odwalla was working closely with investigators.
Although Odwalla had not yet extended its strategies to include victimization or transcendence, the press release did include a statement from Dr. Ranzell Nickelson, a microbiologist and coordinator of the National Cattleman’s Beef Association Blue Ribbon Task Force on e. coli, suggesting that these might be possible future approaches:
Our knowledge of this bacterium continues to evolve, but what we do know it continues to appear in food products previously thought to be inhospitable. In this instance, Odwalla consumers have been impacted, but unless we find better ways to control this bacterium, outbreaks similar to this could happen in other food products. (“Odwalla confirms FDA finding,” 1996)
The same day Odwalla launched a World Wide Web page on the internet to answer questions about the recall and to communicate the company’s reactions (Chronis, 1996). The Web page included press releases issued by the company and questions and answers for concerned customers. In keeping with the company’s open, youthful and avant garde reputation, the Web site was an appropriate tool for the quick dissemination of important information about the crisis. CNET, an online news service, praised the Web site as an effective means of maintaining customer loyalty. In the CNET article, which included a hypertext link to the Odwalla site, Aguilar (1996) wrote:
…Increasingly, corporations are turning to the Internet to help manage a crisis. The Net reaches a mass audience quickly and in a cost-effective way. Companies also find that launching a Web site is a good way to stop rumors from spreading, and sometimes that’s a necessity.
In a Nov. 5 press conference in Seattle, Steltenpohl suggested for the first time that Odwalla would consider using heat pasteurization to make apple juice in the future (King & Heberlein, 1996). He also indicated that he had met personally with the families of several Seattle area children who had been stricken by the e. coli outbreak. In the press conference, Steltenpohl indicated that the crisis had taken a very personal toll on him:
Odwalla’s philosophy and core values are based around nourishment… I’ve made my life’s work focused on health nutrition. Now to find our company linked to a problem that has affected public health has been very difficult. (King & Heberlein, 1996)
On Nov. 8, one week into the crisis, two events occurred that would have an effect on the Odwalla strategy. First, Anna Gimmestad, the 16-month-old Colorado girl who had been hospitalized since mid-October, died of complications related to the e. coli poisoning. It had already been established that she had been infected as a result of drinking a smoothie made with Odwalla apple juice. Her illness had been highly publicized. Her death would have a strong impact on public opinion toward Odwalla. That very day Odwalla issued a brief, two-paragraph press release in response to the death. The second paragraph was a statement from Steltenpohl:
On behalf of myself and the people at Odwalla, I want to say how deeply saddened and sorry we are to learn of the loss of this child. Our hearts go out to the family and our primary concern at this moment is to see that we are doing everything we can to help them. (“Odwalla expresses condolences,” 1996)
The second event actually turned out to be good news for Odwalla. FDA officials announced that they had found no e. coli 0157:H7 at Odwalla’s juice-production plant in Dinuba, California, and that the focus of the investigation would now be on apple growers in the Central San Joaquin Valley (W. King, 1996e). “We diligently looked for the organism in the plant and didn’t find it,” explained the compliance director of the FDA’s Seattle Office in an article in the Seattle Times (W. King, 1996e). The statement helped support Odwalla’s assertions that it had in fact behaved appropriately and that it may now have been victimized by the unsafe actions of its suppliers. As suggested by Benoit (1995a, 1995b), scapegoating allows the accused to reduce guilt by identifying an alternate source as the focus of the problem. By suggesting that apple growers in central California were now the focus of the investigation, the FDA had provided Odwalla with a potential scapegoat and a stronger case to argue that the outbreak was an industry-wide problem. In the Seattle Times article, Odwalla spokesperson Sydney Fisher offered the company’s response to the FDA findings. “That’s a very positive sign for us, because they were very thorough,” she explained (W. King, 1996e).
While finding a scapegoat may have been an effective means of temporarily moving the focus of the e. coli scare away from Odwalla, it was beginning to reduce some of the company’s support from other, and in most cases smaller, natural juice producers. According to an article that appeared in the Nov. 8 issue of the Puget Sound Business Journal, the Odwalla crisis had put a “hard squeeze” on local juice makers who were watching their sales drop at an alarming rate (Fryer, 1996). The article indicated that grocery store chains were beginning to remove all nonpasteurized juices, regardless of the producer, from their shelves. This, in turn, was building anger and even outright hostility toward Odwalla (Groves, 1997; Fryer, 1996). The article quoted the owner of small Washington state juice maker:
I’m appalled at what Odwalla has done. Odwalla will survive, but a lot of local companies will go out of business. This is a death knell for fresh juice. (Fryer, 1996)
Four days later, however, Odwalla CEO Williamson told the Los Angeles Times that his company would stop producing apple juice altogether if the FDA carried through on recent threats to order apple juice makers to pasteurize their products. The consequences to the company, wrote Times reporter Martha Groves, would be significant.
Elimination of its fresh apple juice business would be a Draconian step for Odwalla. More than half its $59 million in sales for the most recent fiscal year came from apple juice products and products that contain apple juice. The company has been busily reformulating some of its blends using juices other than apple.
The following day Odwalla issued a press release acknowledging that e. coli serum antibodies had in fact been found in the tests conducted by the Colorado Department of Public Health and Environment and the Centers for Disease Control on the blood of Anna Gimmestad (“Test results confirm,” 1996). The release expressed sympathy for the Gimmestad family and reconfirmed the company’s commitment to help those suffering medical difficulties after having consumed Odwalla products. Williamson, who was quoted in the release, found a way to put a positive spin on the days news and to continue to bolster the company’s image: We initiated our voluntary recall based on the epidemiological evidence presented to us by the FDA. Today’s results confirm the appropriateness of that initial action.
Focus on Entire Industry
By mid-November, the media was beginning to scrutinize the entire fresh juice industry and the safety of its products in general and, as a result, was spending less time looking specifically at Odwalla. In a press release issued Nov. 18, Odwalla suggested officially and publicly for the first time that the recent incidents of e. coli 0157:H7 were a “call to action for the entire fresh apple juice industry” (“FDA report indicates,” 1996). Adherence to industry standards and accepted manufacturing processes, the release said, were no longer enough to ensure product safety. “Previously accepted practices for preventing e. coli 0157:H7 contamination, such as thoroughly washing apples, cannot assure safety,” Williamson said in the release (“FDA report indicates,” 1996). The Odwalla strategy was now to continue to shift the news media focus to the industry as a whole – the outbreak is no longer just Odwalla problem, it is an industry-wide threat. As Benoit (1995a) explained, the purpose of transcendence is to change the audience’s context for viewing the problem or issue. By framing this as a call for the industry to change its practices and not just an isolated error by a single manufacturer serves this purpose.
Once again taking a page from Johnson and Johnson, the release announced that Odwalla had pledged to lead the industry in solving the e. coli issue (“FDA report indicates,” 1996). Johnson and Johnson had responded to the Tylenol crisis by pioneering tamper-proof packaging. Odwalla wanted to do the equivalent for the fresh beverage industry. At a press conference at the company’s headquarters, Odwalla announced the creation of its Nourishment and Food Safety Advisory Council (“FDA report indicates,” 1996). Among the advisory council members was Dr. Nick Nickelson, founder and president of Red Mesa Microbiology, a consulting company that specialized in food quality and safety. Nickelson was joined at the press conference by another advisory council member, Dr. Michael Doyle, a professor of food microbiology at the University of Georgia. “We now know that e. coli 0157:H7 is a hazard in fresh apple juice,” Nickelson explained at the press conference. “We are not looking for a single step, we’re looking for a process. Odwalla’s program should serve as a model for the entire fresh apple juice industry” (“FDA report indicates,” 1996). Nickelson indicated that he and Doyle would head the development of a Hazard Analysis Critical Control Points program, the first of its kind in the apple juice industry (“FDA report indicates,” 1996).
Even though he had said only days earlier that the company would stop making apple juice if forced by the FDA to heat process, Williamson now announced that Odwalla would consider some form of heat treatment. “Our core values are based around the idea of optimal nutrition. It may be possible to heat treat and still maintain the primary nutritional content of our apple juice” (“FDA report indicates,” 1996).
The very next day, however, the Seattle Times reported the results of an FDA report that accused Odwalla of not “fully” following several agency guidelines at the recently inspected Dinuba plant (W. King, 1996g). For the first time the FDA suggested that the apples used at the plant may have been picked off the ground where they could have been exposed to contaminants. More harmful to Odwalla, however, were reported failures by plant equipment to properly handle and sanitize apples in October, when the contaminated apple juice would have been produced (W. King, 1996g). For example, the Seattle Times article indicated that a solution used to wash and decontaminate the apples contained less than prescribed amounts of phosphoric acid during portions of seven days from Oct. 4 through Oct. 14. The article reported that the only bottle of Odwalla apple juice that tested positive for e. coli was produced during that time period. In addition, the article noted that on Oct. 7 the company had failed to perform routine sanitation on the apple pressing production line (W. King, 1996g).
The news was a strong blow to the company’s efforts to suggest that it had acted in good faith to protect the well-being of its customers. No longer could that claim be made. Bolstering would no longer be an effective strategy. Fortunately for Odwalla, its early attempts at broadening the context of the issue and suggesting that the threat of e. coli was industry wide had been effective. By the time the Seattle Times story broke, much of the focus had already been shifted away from Odwalla. Whether it had been intended or not, the early use of transcendence had the effect of inoculating or buffering the company against future bad news. In the eyes of the media, consumers, and even the FDA, the focus had already shifted away from Odwalla and onto the fresh juice industry in general. Odwalla continued to press this theme. “Any fresh apple juice produced under the current industry standards could still have e. coli wind up in their product,” Williamson explained in a Nov. 24 interview with the Associated Press (“No e. coli found,” 1996).
A number of Odwalla’s smaller competitors, however, continued to cry foul. The week following the FDA report on Odwalla sanitation failures, the San Mateo (California) Times quoted the owner of a Central California fresh fruit producer, who complained:
Odwalla has taken the spotlight off Odwalla and put it on the industry. Let’s not lose track of the real issue. Odwalla got animal poop in its apples and failed to wash it off. (Simmers, 1996)
The Ultimate Challenge
Odwalla now realized that it faced the ultimate challenge. It would have to change the production process that had given the company its identity without further alienating what remained of its loyal audience. To head off major changes threatened by the FDA, it would have to modify its production process and then convince its customers that it would remain true to its mission of providing pure nourishment. It would have to take additional corrective action, differentiate itself from the old Odwalla, and build a “new” Odwalla that would still preserve and maintain the old values.
The “new” Odwalla would remain a “nourishment” company, but it would now also become a “learning” company. “Learning,” which had been mentioned as a value in previous company literature, now would be more of a major focus, or root metaphor, in its new rhetoric: Odwalla had learned from the past and the new company would continue to learn. Ongoing “learning” would allow the company to evolve and change in a relatively uncertain and turbulent short-term future. If the company was always learning, future changes would be easier to explain. After all, “learning” implies that the company is being responsive to its audiences and business environments. That, in itself, is a highly regarded value, one that audiences would expect from such a caring and concerned company.
The “new” Odwalla would begin its emergence in early December. In a Dec. 5 press release issued from the company headquarters, Odwalla announced that it would begin flash pasteurizing its apple juices, which would be re-introduced in the company’s seven-state distribution area the following day (“Odwalla reintroduces,” 1996). Odwalla would “pioneer” the flash pasteurization process, the release explained, noting that the production method would “keep Odwalla’s apple juice as close to its natural state as possible while building in a substantial margin of safety” (“Odwalla reintroduces,” 1996).
The release emphasized the temporary nature of this corrective action. Such a corrective action by the company, even if it were only temporary, constituted a radical departure from the philosophy that had made the company one of the largest fresh juice makers in the United States. Such a change contradicted the company’s very image and would require an explanation for its stakeholder public. By emphasizing the Odwalla mission to provide nourishment, Williamson was able to explain the change and bolster the company’s image at the same time:
Right now we believe pasteurization is an important line of defense. What (customers) are looking for is a degree of comfort. (Groves, 1996b)
The decision to use flash pasteurization also may have been pragmatic. The company had recently laid off slightly more than 10 percent of its 650person work force. As much as 70 percent of Odwalla’s total sales had come from beverages containing apple juice (Groves, 1996b). With only a small fraction of its products in stores, Odwalla had to find a way to allay customer fears and reintroduce products. “We tested the toughest, meanest, most virulent strain of e. coli 0157:H7 that we could find,” Williamson told the Los Angeles Times (Groves, 1996b).
Regardless of the reason behind the decision, Odwalla appeared to have been successful at its strategy. A stock analyst with San Francisco-based Hambrecht and Quist told the Los Angeles Times: The first words out of my mouth were “safety first.” I think they’re responding to the new realities out there. That’s in keeping with their whole philosophy. They’re a nourishment company, and the evidence suggests now that you probably shouldn’t drink unpasteurized apple juice. (Groves, 1996b)
Despite Odwalla’s introduction of the flash pasteurization process, the FDA continued its threats to require all fruit juices makers to pasteurize their products. On Dec. 16, both Steltenpohl and Williamson were given the opportunity to testify before a meeting of the Department of Health and Human Services and the FDA National Advisory Committee on Microbiological Criteria for Food. Their purpose was to ask the government to not require juice makers to pasteurize their products (“Odwalla urges FDA,” 1996; Ostrowidzki, 1996). They also used the meeting as a forum to defend Odwalla’s procedures, including the recently initiated flash-pasteurization process. A final strategy may have been to reestablish support and encourage cooperation from other juice makers, many of whom had expressed public frustration with Odwalla’s image restoration tactics. Their presentations relied on bolstering and transcendence. Williamson told the committee:
We believe we are a nourishment company, and that makes what we’ve gone through that much more difficult… Core values, a couple of things are important to understand here. Honestly, integrity, respect, leadership through creativity, innovation, example. These are key to us, and they were very important for us in handling this crisis. (Williamson, 1996)
It appears that part of the strategy for image restoration was to suggest that a new company had, in fact, emerged from the crisis – that the new Odwalla is not the same company that had existed prior to the outbreak. Steltenpohl emphasized how the company had “learned” and “changed” from the experience:
Since the recent outbreak of e. coli 0157:H7 on the west coast, we have all learned a great deal about the evolution of e. coli and the necessity to review all procedures involved in providing safe juice. This learning process continues and we believe continued research is important in order for consumers to receive the safest most nutritious juice. We are more committed than ever to an appropriate balance between safety and the importance of offering consumers a range of choices in selecting fresh foods. (Steltenpohl, 1996)
Odwalla continued to emphasize its new image as a “learning” company with the appointment of Penelope Douglas in late January as “senior vice president, chief learning officer” (“Odwalla, Inc. announces,” 1997). In a company press release, Williamson offered the following explanation for the creation of the position:
We developed the chief learning officer position to emphasize our commitment to becoming a true learning organization. Douglas is perfect for this role in our innovative organizational model; she is ideally suited to develop synergy among the marketing, communications and human resources functions while maintaining and enhancing our vision of nourishing the body whole. (“Odwalla Inc. Announces,” 1997)
In an attempt to minimize the e. coli crisis and to further differentiate between the old and new Odwallas, the release indicates that Douglas had actually joined the company in September, “just prior to the company’s association with an outbreak of e. coli 0157:H7 bacteria” (“Odwalla, Inc . announces,” 1997). The use of the expression “association with” could be interpreted as an attempt to minimize Odwalla’s role as the central source of the problem and to continue its strategy of transcendence. While “association” implies a connection to the situation, it seems an attempt to recast the company’s role as being a less important part of an even larger problem.
Summary and Conclusions
Benoit (1995a, 1995b) has suggested that in the final analysis and evaluation, the critic should look for evidence that the image restoration strategies had an effect on intended audiences. While acknowledging that interpretive or rhetorical work places limits on our ability to suggest any kind of causality or specific effects, we feel it is possible, nonetheless, to offer an opinion that the Odwalla strategy did, in fact, contribute to a favorable shortterm resolution of the crisis and the company’s ability to maintain its goodwill. We base this assessment on an analysis of Odwalla’s financial performance through the 1997 fiscal year, the final decision by the FDA not to require pasteurization of all juice beverages, and the company’s ability to play a key role in the development of an industrywide council to promote product safety.
In a Jan. 7, 1997 press release, Odwalla reported that during the fiscal quarter in which the crisis occurred the company posted a nearly $5 million loss (“Odwalla, Inc. announces first quarter,” 1997). In that release, however, company leaders declared the crisis over and suggested that the company would rebound and continue to expand. Financial information obtained through America Online,4 however, indicates that in the three quarters following the crisis the company had not completely returned to its pre-crisis financial performance, as measured by net profit and losses, as well as earnings per share. Total revenues, however, exceeded all previous years, increasing from $35.9 million in 1995 to $59.2 million in 1996. As Robert Kruger, an investment analyst with San Francisco-based Van Kasper & Co., explained in a Jan. 8 interview with the Los Angeles Times:
Many people thought the crisis would destroy the company. It hasn’t done that. They’ve weathered the immediate crisis. (Groves, 1997)
On Feb. 4, 1997, nearly three months after the outbreak and juice recall, Odwalla joined with other juicemakers to form the American Fresh Juice Council (AFJC), which, according to an AFJC press release, was created to “promote the value and development of a safe fresh juice industry through education, communication, and continuous improvement of Good Manufacturing Practices (GMP)” (“Fresh juice industry,” 1997). Steltenpohl is listed in the release as a founding member and officer. We contend that the creation of the AFJC illustrates and provides evidence for the effectiveness of Odwalla’s strategy to reconstruct the crisis as an industry-wide problem and thus reduce the focus on the company and its failure to maintain proper sanitation conditions at its production plant. Odwalla’s ability to play a role in the creation of an industry council, particularly when so many of its competitors were initially angered by its declaration of industry safety concerns, confirms that the rhetorical vision of an industry-wide problem was largely accepted.
In summary, it is our contention that Odwalla made effective use of bolstering, corrective action, and defeasibility in the early stages of the crisis. When it became clear that Odwalla had failed to meet proper sanitation guidelines, the company was able to effectively use transcendence to shift the public and government scrutiny onto the general practices of the fresh juice and vegetable beverage industry. As has been suggested by Heath (1997), no strategy can be effective if the actions of the organization are not consistent with the expectations and demands of key audiences. In the case of Odwalla, it was not the mere words alone but the company’s quick and prompt actions combined with its well-developed goodwill that enabled it to effectively resolve the crisis.
Future research should continue to examine the use of image restoration strategies in response to crisis situations. We suggest, however, that future research consider the ethical implications of these strategies. Even though it was determined that Odwalla had in fact failed to follow and maintain proper sanitation procedures, a direct, specific public apology for that failure was never offered. While mortification may have been the most “ethical” response, Odwalla chose instead to employ transcendence, moving away from the specific facts of the crisis to a more general examination of an entire industry’s practices. What are the moral and ethical implications of such a tactic? Under what circumstances is a transcendent strategy ethical? Under what circumstances is it not? Does this imply, as some critics suggest, that clever public relations strategies can be employed as a means of evading responsibility for an organization’s actions and to manipulate the opinions of key stakeholders? These are issues for the field of public relations to debate and explore.
In 1998, the news has been a mixed bag for Odwalla. Spurred by its entry into the Chicago market, Odwalla’s first quarter sales continued to rise above 1997 levels and pre-crisis totals (“Odwalla, Inc. Reports,” 1998). In April, San Francisco Focus magazine named Odwalla “The Best Brand Name” in its “Best-of-the-Bay-Area” issue. And in June, the company reported that it had reached agreements in 17 of the 21 civil suits filed by victims of the e. coli poisonings. Finally, in late July, Odwalla announced that it had pleaded guilty to 16 misdemeanor charges of selling adulterated food products and had agreed to pay a $1.5 million fine the largest criminal fine in a food injury case in FDA history and the first criminal conviction in a large-scale outbreak of this kind (“Odwalla to pay,” 1998). At least $250,000 of that money would be given to support research on food safety by U.S. universities. In an official statement issued July 23, Odwalla acknowledged the end of the investigation, which it described as a “very painful chapter” in the company’s history. The statement explained, “We will never forget the lessons we have learned.” (“Statement by Odwalla,” 1998).
2 Information about Odwalla history can be obtained on the
company’s web site at www.Odwallazone.com. 3 Information about Odwalla social/service activities can be obtained from the company’s web site at www.odwallazone.com. This information also is available in hard copy form in the company’s media kit.
4 Data was obtained through the Morningstar Inc. Service on American Online. Data was posted September 30, 1997. Morningstar materials contain the following disclaimer: “Although data are gathered from reliable sources, completeness and accuracy cannot be guaranteed.”
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Steven R. Thomsen, Ph.D. is an assistant professor in the Department of Communication at Brigham Young University, where he teaches in the public relations sequence. He taught previously at Washington State University and Ball State University. Prior to entering the academic world, he worked as a reporter for the Cincinnati Post and as corporate publications editor at Toyota Motor Sales USA. Bret Rawson is a graduate student in public relations at BYU. Dept. of Communications, F-337 HFAC, Brigham Young University, Provo, Utah 04602, 801-378-2078, email email@example.com.
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