Gerry’s Insights: Odwalla Swan Song

As I stroll my New York streets during this pandemic and see once-vibrant spots like restaurants, music clubs and bookstores shuttered – some of them possibly for good – it brings home the impermanence of so many things we take for granted. What was a robust city-living ecosystem has turned into a desert in the blink of an eye, at the hand of an invisible enemy.

From this perspective, it’s odd thinking about the news that Coca-Cola has decided to shutter its Odwalla refrigerated juice brand, due to go dark around the time you’ll be reading this. The confirmation from its owner of 19 years came abruptly. Given the brand’s long erosion, the move was both shocking and not shocking to me.

Still, the franchise had been around 40 years, and I found myself getting sentimental about this grocery juice-case mainstay. But that begs the question: do we have any business getting sentimental about consumer brands in the first place? And why Odwalla? Would I feel even more sentimental at the loss of brands like Pepsi-Cola or Poland Spring that have amassed far more equity? Actually, I don’t think so.

So what makes Odwalla different? One is the branding itself. The name came from a character conjured up by the avant-garde collective Art Ensemble of Chicago, and as a jazz guy myself (and fan specifically of the Ensemble), I’m going to miss that rare consumer item that takes its branding queues from America’s original musical form. And the graphic identity was unusual in consumer products, heralding bright Africa-tinged bird and fruit motifs. To this day, even as the liquid inside was a pallid imitation of the vibrant juice of the early days, Odwalla’s packaging certainly brightened up the cooler.

That in turn is tied to the brand’s founding myth. The brand was created by a trio of struggling jazz musicians in the Bay Area – most familiarly to BevNet readers the serial entrepreneur Greg Steltenpohl – as a way of making ends meet. They sold their homemade juice out of a Volkswagen van that Coke, in one of its sporadic efforts to reinvigorate the faltering brand, reprised (in far plusher form, as Steltenpohl then observed) for a sampling tour two summers back, in 2018. That may be one difference with a brand like Pepsi-Cola: though Pepsi can similarly boast entrepreneurial roots, that was well over a century ago, while Odwalla’s creation still seems fresh, even if the juices aren’t any more.

Even as an independent brand Odwalla had its ups and downs. An e-coli disaster cost a consumer’s life and prompted a massive recall. At one time, Odwalla itself was a consolidator in the beverage space, absorbing East Coast rival Fresh Samantha and closing its Maine factory; once Coke bought Odwalla a year later, it shut down the Fresh Sam brand entirely. (Odwalla rival Naked Juice, now a Pepsi brand, similarly acquired and discontinued the Midwest’s Fantasia brand.)

How did Coca-Cola fare as a steward of the Odwalla brand? Given the outcome, it’s definitely not getting an “A.” But it also was fighting some tough trends: consumers’ sudden reaction against juice as their concerns about sugar outweighed the products’ nutritional benefits. The product compromises – were they inevitable? – that occurred as Coke tried to scale Odwalla to billion-dollar status as an approachable, affordable brand. Indeed, on social media one finds outspoken old-guard consumers bitterly decrying those compromises. And the difficulty that refrigeration poses, as I’d outlined in this space a few months ago. Truth be told, as far as I can tell, all the major refrigerated juice players are so highly pasteurized by now that they’re essentially shelf-stable brands masquerading as fresh, refrigerated entries. In doing so, they opened the doors to the wave of cold-pressed entries looking to bring back the flavor, nutrition and excitement that once characterized Odwalla, Naked and Bolthouse Farms.

Still, it wasn’t so long ago that Coke executives would brag to investors about their multiple routes to retail, including the captive refrigerated arm that handled Minute Maid, Odwalla and other brands. But they’d been quietly dismantling parts of it over the past decade, and now will call it a day on that effort, too, relaying mainly on broadline distributors, I suppose. I heard Coke did embark on some effort, however brief, to find a buyer before deciding to just kill the brand and distribution system.

On the positive side of the ledger, I supposed, Coke’s ceo, James Quincey, has made it clear that he believes the only way to move forward effectively with innovation is to unhesitatingly kill the “zombie” brands that aren’t cutting it. In confirming Odwalla’s fate, the company pointed to brands like Honest Tea, Topo Chico and Fairlife as brands it remains bullish about. So it’s continuing to fight the good fight to diversify its reliance on CSDs.

A couple of years ago I lured Steltenpohl, who’s now running another ingeniously branded refrigerated brand he’s created, Califia Farms, to a remarkable, if grungy, underground store in Chinatown called Downtown Music Gallery for a live show featuring an out-there sax player named Jack Wright. It turned out Steltenpohl had a reason for being willing to make the trip: it was Wright who’d replaced him in his jazz combo after Greg left to become a full-time beverage entrepreneur in the late 1980s. That night at DMG was the first time they’d met. So count on Steltenpohl to bring a long perspective. How does he feel about the demise of Odwalla? He’s philosophical: the brand had a good run, and the real loss had occurred years back when its unique culture dissipated. Odwalla’s exit, he argued, simply opens up shelf space for the mission-based entrepreneurs who’ve been invading the food and beverage space. So that zombie might have started off as his own kid, but he wasn’t entirely upset to see it go. Still, he couldn’t help but add that the Art Ensemble tune that inspired the brand name was a lament.