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As consumer demand for probiotics grows, small fermented milk beverage companies stand to benefit the most.
Lifeway Foods, which makes kefir, a dairy beverage similar to yogurt, reported annual sales of $160 million in 2023, up 13% from the previous year. Lifeway was founded in 1986 by Michael Smolyansky, a Jewish immigrant from Ukraine, in his Illinois home. After his death in 2002, his daughter Julie took over management and became the youngest female CEO of a public company at the age of 27.
During his tenure, Lifeway has grappled with significant changes in the food landscape. 2020 saw many people looking to try new health-oriented foods and beverages, opening up opportunities for the company to become more widely known.
“We have brought many consumers into the Lifeway family since the pandemic began,” she said. “We learned what was important to them and how to use kefir in their cooking and smoothies.”
Despite Lifeway's sales surge, the dairy company faces stiff 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 benefits of dairy and are less sustainable.
Smolyansky said consumers, especially those suffering from Crohn's disease and IBS, choose kefir to regulate digestion. According to Markets and Markets, the global probiotics market is expected to reach $106 billion by 2029, growing at a CAGR of 8.2%.
Kefir isn't the only product experiencing a surge in popularity at Lifeway, Smolyansky said.
Lifeway also sells Farmer Cheese, which she describes as similar to a “blended cottage cheese.” Smolyansky said the product is seeing a resurgence as home cooking pushes consumers to try new functional ingredients.
“With today’s trends toward high-protein foods, real nutrition and demand for satiety, Farmer Cheese is a great bridge to new trends in the dairy aisle,” Smolyansky said. “Cream cheese on a bagel is a great alternative.”
Lifeway's story also includes family turmoil.
In 2022, Smolyansky's mother and brothers Ludmila and Edward, who controlled 38% of the company at the time, urged the board to oust Julie from her position.
Julie Smolyansky declined to comment on the feud.
Last year, shareholder David Kanen, who holds a 4.1% stake in the company, said the kefir maker's board and CEO were “mismanaging the business.” LifeWay condemned “open attacks” on the business and said positive sales growth in recent years demonstrated the strength of its leadership.
