Peanut Corporation of America facts for kids
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| Private | |
| Genre | Peanut processing |
| Fate | Bankruptcy |
| Founded | 1977 |
| Defunct | February 13, 2009 |
| Headquarters |
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United States
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Number of locations
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Blakely, Georgia; Suffolk, Virginia; Plainview, Texas |
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Key people
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Stewart Parnell, Pres. & CEO David Royster, Vice-Pres. |
| Products | Peanut butter, peanut paste, peanut meal, whole and chopped peanuts |
| Revenue | $25.0 million (2007) |
| Owner | Stewart Parnell |
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Number of employees
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90 (2007) |
The Peanut Corporation of America (PCA) was a company that processed peanuts. It stopped operating because of a huge and dangerous food contamination problem in the U.S. PCA started in 1977. It was first run by Hugh Parnell, along with his son Stewart Parnell and two other sons.
The company was sold in 1994–1995, and Hugh Parnell retired. Stewart Parnell later bought the company back in 2000. Over the years, PCA had factories in Blakely, Georgia, Suffolk, Virginia, and Plainview, Texas. They made peanut and peanut butter products for places like schools, prisons, and nursing homes. They also sold to food makers for things like cookies, snacks, ice cream, and even dog treats.
PCA closed down for good after it was found to be the cause of a big Salmonella outbreak. This happened in late 2008 and early 2009. Before closing, PCA had 90 employees and made $25 million in sales in 2007. It was thought to produce about 2.5% of all processed peanuts in the U.S. The 2008 contamination was not the first time the company had food quality problems. There were worries about cleanliness at PCA as far back as the mid-1980s.
In 2008 and 2009, the Salmonella contamination caused 9 people to die and at least 714 people to get sick. All of them got food poisoning from eating products with contaminated peanuts. This led to the biggest food recall in U.S. history at that time. It involved 46 states, over 360 companies, and more than 3,900 different products. On February 13, 2009, PCA stopped all business and filed for bankruptcy. In September 2015, Stewart Parnell was found guilty of many crimes and was sentenced to 28 years in prison for his part in the outbreak.
Contents
About Peanut Corporation of America
What PCA Did
Parnell's Peanuts started in Gorman, Texas, in 1977. They sold peanuts to people, bakeries, and companies that made candy, ice cream, and snacks. In 1990, the FDA found that PCA was selling peanuts with high levels of aflatoxins. Aflatoxins are toxins from a mold that can grow in nuts and seeds.
The company was sold in 1994–1995, and Stewart Parnell bought it back in 2000. PCA had factories in Georgia, Virginia, and Texas. They supplied peanuts, peanut butter, and peanut paste to schools, prisons, and nursing homes. They also sold to discount stores and food manufacturers for cookies, snacks, ice cream, and dog treats. At its busiest, PCA made about 2.5% of processed peanuts in the U.S. It had 90 employees and $25 million in sales in 2007. The company closed after it was found to be the source of the Salmonella outbreak in 2008.
Earlier Problems: Aflatoxin Lawsuits
PCA faced lawsuits in the early 1990s. In 1990, the American Candy Company sued PCA. This was after the FDA found that PCA's peanut butter had too much aflatoxin. American Candy had used this peanut butter to make 8,000 cases of candy for Walmart.
Another lawsuit came from Zachary Confections Inc. in 1991. A large shipment of nuts from PCA was also found to have unsafe levels of aflatoxin. These lawsuits showed that PCA had problems with food safety even before the Salmonella outbreak.
Inspections and Concerns Before 2008
In January 2006, Nestlé checked PCA's Plainview plant. They gave it a "Does Not Meet Standards" score in almost all areas. This meant the plant was not clean enough.
In 2001, FDA inspectors found that products from the Blakely plant might have been exposed to bug killers. Virginia state records also showed similar problems at PCA's Suffolk plant. An inspection in 2008 found mold on peanut containers. They also counted 43 mouse droppings on the floor and saw a live bird inside the warehouse.
The Salmonella Outbreak
How the Contamination Was Found
In late 2008 and early 2009, nine people died. At least 714 people in 46 states got sick from food poisoning. Half of those who got sick were children. They all ate products that had contaminated peanuts. The Centers for Disease Control and Prevention (CDC) reported these numbers. About 23% of the sick people had to go to the hospital. The actual number of sick people was likely much higher. This is because many cases of salmonellosis are not reported.
Officials in Minnesota and Connecticut, the FDA, and the CDC worked together. They found that the Salmonella typhimurium outbreak came from peanut butter, peanut paste, and peanut meal. These products were made by PCA at its Blakely, Georgia, plant. On February 7, 2009, officials in Oregon even confirmed that a dog got sick. It had eaten biscuits with PCA's contaminated peanut products.
PCA first said the claims were not true. But in January 2009, they stopped making products and laid off 50 workers at the Blakely plant.
Massive Product Recall
This contamination caused the largest food recall in U.S. history at that time. By April 22, 2009, it involved at least 361 companies. Over 3,900 different products that used PCA ingredients were recalled. The recall included everything made at the Blakely plant since January 1, 2007. It also included everything ever made at the Plainview, Texas, plant.
Even school lunches and emergency meals from FEMA were recalled. FEMA had sent these meals after a big ice storm. Food banks across the country had to throw away thousands of pounds of food. This happened when many families needed help.
Major peanut butter brands were not part of the recall. PCA mostly sold to low-cost and institutional buyers. But many people stopped buying peanut products altogether. This caused sales of all peanut butter brands to drop by almost 25%. This hurt the peanut industry and farmers a lot. It was estimated that the outbreak caused about $1 billion in losses to the U.S. peanut industry.
Investigations in 2009
Georgia Plant Problems
After the source of the contamination was found, reporters looked closely at PCA's sites. The Washington Post reported on February 14, 2009, that many in the peanut industry knew about PCA's serious cleanliness problems. David Brooks, a buyer who visited PCA in the mid-1980s, said PCA was "a time bomb waiting to go off."
Former employees told the Chicago Tribune that the plant was "filthy and nasty." They said they would never eat the peanut butter or let their children eat it. One worker remembered seeing baby mice in a container of peanuts. Others said they had to walk through standing water after heavy rain. Another former employee told CBS News he saw a rat roasting in a peanut area. A worker told ABC News that employees did not know about positive Salmonella tests.
Texas Plant Issues
PCA also had a plant in Plainview, Texas. This plant opened in March 2005 and had 30 workers. But it was never officially licensed as a food factory in Texas. The state had not inspected it until the problems at the Georgia plant became known.
The Texas plant processed peanuts and shipped them to food companies. An inspection in January 2009 found unclean parts of the peanut-roasting line. On February 10, 2009, PCA announced the Texas plant was shut down. This happened after samples from February 4 tested positive for Salmonella.
Former workers at the Texas plant told The New York Times it was "disgusting." They said it had problems like a leaky roof and many rodents, similar to the Georgia plant. A former plant manager said he told Stewart Parnell about the dirty conditions. This included "water leaking off a roof and bird feces washing in." But Parnell would not pay for repairs.
On February 12, 2009, Texas health officials ordered a huge recall. It included all products ever shipped from the Texas plant since 2005. They found that the plant's air system was pulling dirt from a crawl space. This space had "dead rodents, rodent waste, and bird feathers" into the production areas.
Virginia Plant Closure
PCA's peanut processing plant in Suffolk, Virginia, had 13 workers. It was shut down on the same day PCA filed for bankruptcy.
Company Closure and Bankruptcy
On February 13, 2009, PCA announced it was stopping all operations for good. It also filed for Chapter 7 bankruptcy. This type of bankruptcy means the company will sell its assets to pay off debts. The company decided to close because all its plants were shut down.
Other Government Actions
Stewart Parnell was on the U.S. Department of Agriculture's Peanut Standards Board. This board sets rules for peanut quality. He was removed from the board on February 5, 2009.
Also on February 5, 2009, the USDA banned PCA and its other company, Tidewater Blanching LLC, from all federal government contracts for one year. The USDA said PCA "lacks business integrity and business honesty." This made it unable to do business with the government.
The Owner's Role
Stewart Parnell was the owner, president, and CEO of Peanut Corporation of America during the contamination. His father, Hugh Parnell, started the business in 1977. Stewart Parnell bought the company back in 2000 and the Blakely, Georgia, plant in 2001. He greatly increased sales at the Blakely plant. However, the FDA did not know the plant made peanut butter until the 2008-2009 outbreak.
The Parnells ran PCA on a very tight budget. Stewart Parnell ran PCA from a converted garage at his home. He also used workers who were paid minimum wage.
Even after more than 12 tests in 2007 and 2008 showed Salmonella in his products, Parnell sent an email on January 12, 2009. He wrote, "We have never found any salmonella at all. No salmonella has been found anywhere in our products or in our plants." Parnell ordered products with Salmonella to be shipped. He complained that the tests were "costing us huge $$$$$." In one email, he complained about finding Salmonella again. He wrote, "I will hold my breath ... again."
After PCA was found to be the source of the outbreak, Parnell tried to get regulators to let him keep using peanuts from the contaminated plant. He wrote that company leaders "desperately at least need to turn the raw peanuts on our floor into money."
On February 11, Parnell appeared before a U.S. House committee. He refused to answer questions, using his right to remain silent. One question he refused to answer was about eating the contaminated products himself. A representative showed an email from Parnell about products that tested positive for Salmonella. Parnell had written: "Let's turn them loose."
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