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Coke consumes Odwalla
HALF MOON BAY— Those weren’t rumors. It’s the real thing.
The Coca-Cola Co., which posted worldwide sales of $20 billion last year, has swallowed the locally grown Odwalla juice company in one gulp.
Odwalla, created 21 years ago in a shed behind a yellow Victorian on Seabright Avenue in Santa Cruz, will become part of Coke’s Minute Maid juice division when the deal is completed, probably in December.
In an announcement Tuesday, Coke said it will pay $181 million for the organic-juice company, or $15.25 a share in cash, for all of Odwalla’s outstanding common stock.
"Who would have thought 20 years ago that anything like this would ever happen?" said Odwalla co-founder Gerry Percy, who is still a stockholder in the company.
Stephen Williamson, Odwalla’s chief executive officer, told employees via e-mail Tuesday that Odwalla’s vision of "nourishing the body whole" won’t be affected by the sale to the world’s largest soft-drink maker. He said Coke has no plans to change the product or the management.
"Coke is embracing our vision, and they are looking long term," Williamson said. "Coke wants to give us support to touch more people with our vision."
Odwalla’s stock closed Tuesday at $15.13, up $3.30 from Monday. The stock has climbed 120 percent from $6.80 since rumors of the impending sale surfaced Oct. 22.
Some might say the two companies have about as much in common as milk and Pepsi. In its early years, Odwalla, whose organic drinks are sold under the slogan "Juice for Humans," made big decisions by consensus with its employees. Workers at all levels had access to senior management to talk about the company’s direction.
"It’s an ancient idea, the way Native Americans have always governed themselves," co-founder Greg Steltenpohl said in a 1995 interview. "They sit around a campfire and talk, and then in the morning everyone knows what to do."
Six years later, Steltenpohl acknowledges the culture has changed and will continue to change at Odwalla but said Coke’s resources will allow the company to grow.
"I actually think it’s very positive for the people who work there and for our vision for the product. Companies like Coca-Cola need the spirit that companies like Odwalla have," he said.
Steltenpohl, who lives in the area, is still a minor stockholder in the company.
Percy, who now lives in Kauai, Hawaii, agreed the pairing of Coke and Odwalla is unusual but said a deal that allows Odwalla to be available to more people is a good one.
"In the long run, it’s going to be great for the juice," he said. "There will be more opportunities for people to have access to the juice, and I think that is a very good thing."
Bonnie Bassett, another of Odwalla’s founders, who once called its organic juices "love in a bottle," was philosophical about the sale Tuesday.
To the former Santa Cruz juice maker, Odwalla was created in the "spirit of love and healing," and the product was something close to her heart. She hopes that spirit will be infectious.
"I would hope that it is this spirit that has taken over Coke, not Coke taking over Odwalla," Bassett said.
Contact Michael de Give at BellaWellaInk@Cruzio.com
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