Peanut Corporation of America
| Company type | Private |
|---|---|
| Industry | Food processing |
| Founded | 1977 |
| Founder | Hugh Parnell |
| Defunct | 2009 |
| Fate | Chapter 7 bankruptcy liquidation |
| Headquarters | United States |
Area served | United States |
Key people | Stewart Parnell (sole proprietor, president, CEO) |
| Products | Peanut butter, peanut paste, peanut meal, whole or chopped peanuts |
Number of employees | 90 (2007) |
Peanut Corporation of America (PCA) was a peanut-processing firm based in the United States, originally established in 1977 by Hugh Parnell along with his sons, including Stewart Parnell. After the company changed hands in 1994–1995, Stewart Parnell reacquired PCA in 2000 and expanded its operations to include plants located in Blakely, Georgia; Suffolk, Virginia; and Plainview, Texas. PCA’s product line consisted of various peanut-based items such as peanut butter, paste, meal, and whole or chopped peanuts. Its primary clientele comprised institutional food providers—like schools, correctional facilities, and nursing homes—as well as manufacturers producing cookies, snack foods, ice cream, and pet treats.
By 2007, PCA employed approximately 90 individuals and reported annual revenues of $25 million, holding an estimated share of 2.5% within the processed peanut sector across the U.S. Despite this growth trajectory, the company had a longstanding record of food safety violations dating back to the mid-1980s under Hugh Parnell’s management, which included legal actions related to aflatoxin contamination exceeding FDA thresholds.
During late 2008 and early 2009, PCA was identified as the origin of a nationwide Salmonella outbreak that resulted in nine fatalities and sickened over 700 individuals. This incident triggered what was then the largest food recall in U.S. history—affecting 46 states, more than 360 businesses, and upwards of 3,900 products containing PCA ingredients. The repercussions severely undermined PCA’s market standing and financial health.
On February 13, 2009, PCA halted all business activities and pursued Chapter 7 bankruptcy liquidation amid ongoing federal criminal probes and numerous civil lawsuits. In September 2015, Stewart Parnell received a prison sentence of 28 years for his involvement in the outbreak; his brother Michael was sentenced to 20 years. The downfall of PCA is frequently cited as a cautionary example underscoring the vital importance of regulatory compliance and rigorous quality assurance within the food processing industry.
Scope of business
Parnell's Peanuts was founded by Hugh Parnell Sr. in Gorman, Texas, in 1977 with a focus on supplying consumers as well as bakeries and manufacturers producing candy, ice cream, and snack products. The business changed ownership during 1994–1995 when Hugh retired while Stewart Parnell stayed on as a consultant. In 2000, Stewart Parnell reacquired PCA through a private transaction. At that point, PCA operated processing plants in Blakely, Georgia, Suffolk, Virginia, and Plainview, Texas, delivering peanuts and peanut derivatives such as butter, meal, and paste mainly to institutional clients including schools, prisons, nursing homes; discount retail outlets like dollar stores; plus food producers making cookies, snacks, ice cream treats, and pet foods.
At its operational height by 2007, PCA employed around ninety people and generated annual sales amounting to $25 million while commanding roughly 2.5% of the U.S. processed peanut market.
In 1990, the FDA detected that PCA had distributed peanuts contaminated with elevated aflatoxin levels caused by mold growth. Subsequently in 1992, the American Candy Company initiated litigation against PCA over tainted nuts. Following its identification as the source of a significant Salmonella outbreak in 2008, PCA ultimately ceased operations permanently after filing for Chapter 7 bankruptcy.
Owner
Peanut Corporation of America was originally established by Hugh Parnell, the father of Stewart Parnell. However, at the time the contamination crisis emerged, Stewart held the positions of sole proprietor, president, and CEO.
Hugh Parnell entered the peanut industry alongside Stewart and his siblings in 1977, growing a modest roasting operation with annual revenues of $50,000 into a $30 million enterprise before selling it between 1994 and 1995. Stewart continued as a consultant after the sale until he reacquired the Gorman, Texas facility in 2000. The following year, he purchased the plant located in Blakely, Georgia, which initially focused solely on roasting and blanching peanuts. By 2004, Stewart had tripled the company’s revenue and achieved its first profitability in 15 years, with output surpassing 2.5 million pounds per month. Notably, during the 2008–2009 outbreak, the FDA only became aware that this plant was producing peanut butter.
The Parnell family managed PCA with a stringent budget, employing minimal personnel and relying heavily on workers earning minimum wage. Stewart operated the company from a converted garage near Lynchburg, Virginia.
Despite more than twelve positive tests for Salmonella contamination between 2007 and 2008, Stewart Parnell publicly denied any contamination in January 2009. He authorized shipments of tainted products and expressed frustration over the financial burdens imposed by testing procedures. Following a positive test in June 2008, he wrote, "I go thru this about once a week... I will hold my breath ... again." After being identified as the source of the outbreak, Parnell sought federal permission to continue processing peanuts from the contaminated facility, stressing the critical need to convert existing inventory into revenue.
Media
In 2015, Food Republic produced and broadcasted an episode titled Food Crimes: "P.B. & Jail."
On July 3, 2017, CNBC aired an installment of American Greed entitled "From Peanuts to Sick Millions" (Season II, Episode AG 141).