Why Lifeway’s CEO believes dairy is driving gut health boom
As consumer demand for probiotics intensifies, a small fermented milk beverage company is among the biggest beneficiaries.
Lifeway Foods — which makes kefir, a dairy beverage that is similar to yogurt — reported record annual sales of $160 million in 2023, an increase of 13% from the prior year. Lifeway was founded in 1986 by Michael Smolyansky, a Jewish immigrant from Ukraine, in his Illinois home. His daughter Julie took over in 2002 after he died, becoming the youngest female CEO of a publicly held company at the age of 27.
Throughout her tenure, Lifeway has grappled with significant changes in the food landscape. In 2020, an opening emerged for the company to gain wider prominence, with people eager to try new health-oriented foods and beverages.
“We brought a lot of consumers into the Lifeway family since the pandemic began,” she said. “We learned about what’s important to them and how they use kefir in their cooking and smoothies.”
Even as sales at Lifeway have surged, the dairy company has faced mounting competition from plant-based options as consumers look for healthier alternatives. Smolyansky said many plant-based products touted for their nutritional benefits lack the gut health advantages of dairy, while also being less sustainable to create.
Smolyansky said consumers turn to kefir to regulate their digestion, particularly people afflicted with Crohn’s disease and IBS. The global probiotics market is projected to be worth $106 billion by 2029, increasing at a compound annual growth rate of 8.2% according to Markets and Markets.
Smolyansky said kefir isn’t the only product at Lifeway experiencing a boom in popularity.
Lifeway also sells Farmer Cheese, which she describes as similar to “blended cottage cheese.” Smolyansky said the product is seeing a resurgence as home cooking leads consumers to try new functional ingredients.
“With today’s trends around the demand for high protein foods, real nutrition and satiation, Farmer Cheese is a great bridge to an emerging trend in the dairy aisle,” Smolyansky said. “It’s a great alternative to cream cheese to spread onto a bagel.”
The story of Lifeway also has included family turmoil.
In 2022, Smolyansky’s mother and brother, Ludmila and Edward, who at the time controlled 38% of the company, urged its board to oust Julie from her position.
Julie Smolyansky declined to comment on the feud.
Last year, David Kanen, a shareholder with a 4.1% stake in the company, said the kefir maker’s board and CEO have been “mismanaging the business.” Lifeway decried the “public attack” on the business and said its positive sales growth in recent years is a testament to the strength of its leadership.
Source: fooddive.com