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Odwalla Juice Company

Uploaded by mubles on Nov 17, 2006

Odwalla is a juice company with a healthy vision. It was created by Greg Steltenpohl, Gerry Percy and Bonnie Bassett a few decades ago. Steltenpohl was a jazz musician and only wanted to make enough money to finance his musical career, so he began selling his juice to local restaurants, making the juice with a $200 juicer. During the 1980’s, Odwalla began to extend its market and expanded its own distribution and production capabilities by purchasing other juice company’s. In 1983 Odwalla introduced carrots to their market and moved into a larger production facility, and by 1993 Odwalla went public and offered to sell 1 million shares of common stock at an initial price of $6,375/share. The proceeds from the IPO were used to construct a 65,000 square foot production facility in Dinuba, California. Odwalla was becoming the largest producer of fresh fruit, and vegetable-based beverages in the western United States (1).

By the fall of 1996 their sales were $59 million, an increase of 40% from the previous fiscal year. Odwalla used its market niche of fresh, minimally processed juice and juice-based beverages to bring them to the top. A ½ gallon jug of juice would cost the consumer around $5.00; this was consistently purchased because of the company’s total commitment to make a fresh product that was not pasteurized, which was uncommon in the juice industry. The company was growing with annual sales approaching $90m. The company had established a strong brand with enormous customer loyalty (5).

Odwalla mainly sold their juice to supermarkets, warehouse outlets, specialty stores, natural food stores, and institutions such as restaurants and universities. They used a direct store distribution policy, meaning each site was provided with their own refrigerated cooler with Odwalla’s label. Each account was serviced by route salespeople, who were responsible for stocking and removing unsold juice. The RSP’s kept strict records of local sales and adjusted the products to meet that area’s preference in juice. Odwalla Inc gave bonuses to the RSP’s based on their route sales and each employee received stock options, extensive wellness programs, and an allowance for fresh juice. Odwalla wanted to make sure the company’s growth would not interfere with their vision, so the company initiated a three day training session called, Living Vision Conference, for employees to talk about applying the vision...

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Uploaded by:   mubles

Date:   11/17/2006

Category:   Case Studies

Length:   14 pages (3,154 words)

Views:   8314

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