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Talk about a life-or-death situation.

When Odwalla Inc. CEO Stephen Williamson learned that his company's apple juice had been linked to a strain of deadly E. coli in Washington State, he feared that his company would never recover. When 16-month-old Anna Grace Gimmestad died 10 days later from drinking the contaminated juice, he almost wished that his company would just surrender and collapse.

In the span of one week in late 1996, Williamson found himself at the center of a human tragedy and a business crisis that could have destroyed Odwalla, a company built around its commitment to healthy products. Key employees quit, sales plunged, and the will to fight wavered as Odwalla -- and Williamson himself -- faced the ultimate setback. "Our vision statement is about nourishing the body whole, yet people were getting sick from our product," says Williamson, 42. "Then a little girl named Anna died from our apple juice, and Odwalla's world changed forever. Our company will never be the same."

That was five years ago. Today, the company is healthy, growing, and profitable. The nation's number-one fresh-juice distributor, Odwalla has entered the soy-milk and energy-bar markets, upgraded its production facilities significantly, and purchased Maine's Fresh Samantha Inc. -- none of which should suggest that Williamson, Odwalla, or its 750 employees have forgotten the 1996 tragedy or the lessons learned about resilience.

A Healthy Start

Odwalla (pronounced "odewalla") sprouted from the back of a 1968 Volkswagen van in Santa Cruz, California 21 years ago, when now chairman Greg Steltenpohl and friends Gerry Percy and Bonnie Bassett began squeezing fresh oranges on a $200 hand juicer. Within eight years, the motley crew had incorporated Odwalla, named for a musical piece performed by the Art Ensemble of Chicago, and expanded its juice distribution through Silicon Valley and into San Francisco. In 1992, Steltenpohl moved the company's production facility from the seaside hamlet of Davenport to California's fertile Central Valley, where Odwalla thrived by creating juice concoctions like "C" Monster, Mo' Beta, and Femme Vitale.

When Williamson joined the company in March 1991, Odwalla's annual sales totaled $6 million. Before the E. coli crisis, the company projected 1996 sales of $90 million. Odwalla was growing by about 30% a year and was expanding distribution into the Pacific Northwest, the Rocky Mountains, Texas, and southern California. While competitors like Snapple teetered on the brink of bankruptcy, Odwalla was reaping the profits of its strong brand and customer loyalty.

"Managing Odwalla's rapid growth was challenging but exhilarating," Williamson says. "We were sourcing, squeezing, mixing, blending, bottling, shipping, and delivering our products to more retailers and more consumers every day."

A Growth Spurt Arrested

Odwalla's Cinderella story ended abruptly on October 30, 1996, when the State of Washington Environmental Health Services notified Williamson of a possible epidemiological link between several cases of E. coli O157:H7 and Odwalla's apple juice. Though the E. coli link remained uncertain, Williamson ordered a complete recall of all products containing apple or carrot juice from 4,600 retail outlets in seven states and British Columbia. Within 48 hours, the $6.5 million recall was completed.