FDA Report Indicates No E. Coli O157:H7 Found at Dinuba Plant

Odwalla Pledges to Lead Industry on Solving E. Coli O157:H7 Introduces Advisory Council, HACCP Plan, Considers Form of Heat Treatment for Apple Juice

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HALF MOON BAY, Calif., Nov. 18, 1996 -- Odwalla, Inc. (Nasdaq: ODWA) announced today, at a press briefing, that initial findings of the FDA field inspector's investigation of its Dinuba, Calif. production facility indicate no presence of E. coli O157:H7 in the plant. The FDA is continuing its investigation into the cause of the bacteria, but has now shifted its attention to sources other than the plant.

To Odwalla, the recent incidents of E. coli O157:H7 are a call to action for the entire fresh apple juice industry. Adherence to industry standards for good manufacturing practices is no longer enough to assure that E. coli O157:H7 is not present in fresh apple juice. "Previously accepted practices for preventing E. coli O157:H7 contamination, such as thoroughly washing apples, cannot assure safety," said Stephen Williamson, CEO of Odwalla. Further, according to Dr. Michael Doyle, microbiologist from the University of Georgia, "Testing of finished product does not guarantee the absence of harmful pathogens such as E. coli O157:H7."

Odwalla pledged to lead the industry in solving the complex E. coli O157:H7 issue as it relates to fresh apple juice. To that end the company has created the Odwalla Nourishment and Food Safety Advisory Council, of which two members, Dr. "Nick" Nickelson and Dr. Michael Doyle, participated in the briefing. Nickelson is founder and president of Red Mesa Microbiology, a consulting company specializing in food quality and safety programs. Doyle is professor of food microbiology and director of the University of Georgia's Department of Food Science and Technology.

With their guidance, Odwalla will be developing the first Hazard Analysis Critical Control Points (HACCP) program in the fresh apple juice industry, which has become a regulatory standard in the beef, poultry and seafood industries. "We now know that E. coli O157:H7 is a hazard in fresh apple juice," said Nickelson. "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."

Finally, among other methods, the company is considering some form of heat treatment to kill bacteria while maintaining integrity and optimal nutritional content of the fresh apple juice, producing a safe product that is in keeping with the company's vision of producing nourishing beverages. "Our core values are based around the idea of optimal nutrition," said Greg Steltenpohl, chairman of Odwalla. "It may be possible to heat treat and still maintain the primary nutritional content of our apple juice. We're researching that now and when we have all the information we'll make a decision and share our findings with the industry and the public." Until that time, the company has stopped production of all fresh apple juice and encouraged other producers of fresh apple juice to do the same.

Odwalla produces and distributes fresh juices to major grocery stores and small retailers in seven Western states and Canada, including California, Colorado, Nevada, New Mexico, Oregon, Texas, Washington and British Columbia, Canada.

CONTACT: Sydney Fisher of Odwalla, Inc., 415-712-5512; or Jackson Holtz of Edelman Worldwide, 415-433-5381, for Odwalla, Inc.