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A years-long feud has flared up again as relatives of LifeWay Foods CEO Julie Smolianski seek to oust her and the company's board once again.
Her brother, Edward Smolyanski, and her mother, Ludmila Smolyanski, filed a motion with the U.S. Securities and Exchange Commission this week, alleging that Lifeway’s board “oversaw serious and repeated failures of corporate governance that harmed the company and its employees and resulted in poor financial results for shareholders.”
In filings also filed by two relatives of the CEO, the dairy business argued it needed a new approach under Lifeway Foods' new leader.
In an interview with Food Dive, Edward Smolianski said there's a real lack of leadership among kefir producers.
“There’s no one running the company. It’s on autopilot,” Edwards said. “The board has no idea what’s going on. Julie and her team aren’t present. They don’t understand trends. They’re behind the times and don’t invest heavily in marketing.”
Lifeway Foods and its CEO did not respond to requests for comment on the SEC filing or to Edwards' comments as of press time.
Michael and Ludmila Smolyanski founded the company about 40 years ago. When Michael died in 2002, his daughter Julie took over as CEO at age 27, and his son Edward served as COO until 2022. Edward currently serves as president of Pure Culture Organics, a competing kefir company.
Lyudmila Smolyanski said the decision to file was not easy, but she was focused on what was best for Lifeway Foods. “The company my husband and I started in 1986 needs a new direction that honors its legacy while also ensuring its future,” she said in a statement. “The new path is good for everyone: our employees, our shareholders and even my daughter Julie.”
Lifeway believes its current strategy is working for the company. In June, the company reported revenues up 13% year-over-year and $160 million in 2023.
Julie Smolianski told Food Dive in June that the pandemic era has brought about a new wave of consumers interested in gut health, and the company is keeping up.
The CEO's brother disagrees with his sister, saying Lifeway has “growth at the same rate for the last 20 years.” Edwards said Lifeway's leadership failures have caused the company to fall behind other leading brands in the cultural dairy category, including Chobani and Siggi's.
“We're stuck in the mud because my sister is more interested in sitting around doing nothing while she and her friends live off the shareholders' money,” Edward said. “They're ethically challenged. What kind of employee would follow you when the people running the company are essentially criminals?”
