It’s unfortunate, but food recalls happen frequently and for various reasons. There were 65 recalls in 2023 and according to the USDA, the most common reasons were an import violation and undeclared allergen. The 2012 recall of Sunland brand peanut butter sold at Costco and other stores, though, was more serious because of contamination with Salmonella. This might not be one of the food recalls that will always haunt Costco — like when plastic was found in Foster Farms chicken patties in 2022 — but it’s one of the peanut butter recalls that everyone should know about. After all, it led to Sunland, Inc. filing for bankruptcy and closing its doors.

The voluntary peanut butter recall was announced on September 24, 2012 with an official press release from Sunland. At the time, less than 100 of its peanut butter and almond butter products were at risk of being contaminated by Salmonella, an organism with the potential to cause fatal infections. Despite that, these products were sold in more than just Costco; they were also sold at Kroeger, Target, Trader Joe’s, Walmart, and Whole Foods. The recall was expanded by mid-October to more than 400 products just a few weeks later. Even roasted peanuts, ice creams, and MoonPies were added to the list. Plus, 35 people in 19 states had gotten sick from the contaminated butters. However, that wasn’t the end of it.

By November, 42 people in 20 states had taken ill from Sunland’s bacteria outbreak. While no deaths were reported, 10 people were hospitalized, and some might have considered making homemade peanut butter in the future. So, just a little over a month after the recall was expanded to hundreds of products, the FDA revoked the registration of the Sunland plant in Portales, New Mexico. It was the first time the agency had ever taken such a step.

The FDA explained that its decision was based on the outbreak and a long history of health violations at the Sunland plant. In an official document, the agency’s investigators cited instances of Salmonella in Sunland products dating back to 2009 and its finding that Sunland had failed to clean its production packaging equipment lines in its peanut butter plant after Salmonella was detected in the intervening period. Plus, a September 2012 inspection found Salmonella in 42 product samples.

Since a registration is required to sell products in the United States, the FDA’s decision to revoke it from Sunland effectively shut down the plant’s operations. The New Mexico-based plant was the largest organic peanut butter producer in the country at the time, so the company experienced ongoing challenges despite getting FDA authorization to resume operations in May 2013. After filing for Chapter 7 bankruptcy in October 2013, the U.S. Bankruptcy Court ordered the plant’s auction.