Lifeway Foods Expands Reach With Walmart Pact

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2:15You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Shares of Lifeway Foods. It's the company behind kefir or kefir, depending on how you pronounce it when you see it at the grocery store. I don't know. You're Captain Yogurt. I am Captain Yogurt. They also do probiotic smoothies, farmer's cheese and more. They swung wildly earlier this month, shares that is, surging as much as 15.7 percent, but falling as much as 7.5 percent to close lower by 2.5 percent. That was the day the company reported earnings that trailed in sales that topped estimates for the quarter.

2:49I want to bring in Julie Smolanski. She's CEO of the$360 million market cap Lifeway Food. She joins us from Los Angeles. Julie, good to have you back with us. How are you?

2:59Julie Smolyansky:Great. Thank you so much for having me. Well, thanks for joining us. I want to talk about the state of the company, how you view the consumer, and then also talk a little bit about the most recent news that you guys have with Danone because you've spent a lot of time on our program talking about that. Let's start with the consumer and where you're seeing areas of growth because I know last time you spoke with us, you said, yes, Kefir is certainly where we're seeing growth, but we're also branching out to other things, including farmer's cheese. Where are the areas of growth for you right now? Yeah, I mean, we're seeing, thank you so much.

3:34Julie Smolyansky:Well, Lifeway has never been stronger. We are going to have record growth this year, record, our highest historic year of success ever. And we're seeing a record demand for functional, nutritious, gut-healthy foods, high protein, and not just protein, but high-quality bioavailable protein. Not all protein is the same, and we're seeing it everywhere. But, you know, I think smart consumers are really doing deep dives and research into their protein choices. And they're going to find that. Yeah, I'm going to I know I'm going to steal a question from Carol, but it's one question that she always asks.

4:11You know, Sweetgreen announced this like ultra high protein salad recently. And it's all about for GLP one users. It's like 100 grams of protein in a salad. Need it for your muscles. Are you are you seeing this in the move with people on GLP ones? Are you seeing them reach for kefir?

4:27Julie Smolyansky:Absolutely. It is critical that people who are on GLP-1s, and roughly 15 % of Americans are using a GLP-1 right now, and one out of three are curious and considering it next year. And I think that's going to be a continued rise in consumer behavior. And we are there is an absolute necessity in consuming high quality bioavailable protein to make sure that you are preventing muscle loss. And we also see an all time high in women using strength and muscle building exercises at an all time high. So there's a lot of kind of trends happening all at the same time. And we're right at the center of that, really meeting the moment at Lifeway.

5:15So, you know, just looking at all your products, I mean, what's your moneymaker? What do you sell the most of?

5:22Julie Smolyansky:Obviously, plain kefir is our number one. Farmer cheese, which we started off the program with. Farmer cheese has been one of our early product number two. My father made this in Slavic communities, Russia, Ukraine, Eastern Europe. It's tvarug, which is like a soft, unripened cheese. Kind of, I would say, the sexier version of cottage cheese. It's already blended. It's spreadable. It's a great canvas to do a lot. And right now, it's our time to shine with Thanksgiving upon us. We have a whole cheesecake campaign so you can make a healthy cheesecake with this, sweet or savory. I also like to put this on a potato chip and some black caviar.

6:00Julie Smolyansky:That's my favorite chef's kit. That's fancy. Yeah, very fancy and healthy. Because, again, high-quality real protein, not synthetic lab-created protein. Super, super important. So, yeah, we are really seeing this kind of intersection of culture and trends and gut health and probiotics all coming together. Protein, high-quality dairy is back. Well, so just give me an idea of some growth rates. I'm looking at a release, I think it was from you guys, or some research here, that your Farmer Cheese, you guys are available in, what, 2 ,000 Walmart stores nationwide. That's pretty huge. Huge. But my understanding is it's growing at double-digit year-over-year rates.

6:46Is that correct?

6:47Julie Smolyansky:That is correct. Yeah. We just picked up 2 ,000 Walmart stores. We're in all of Albertsons nationwide, and we are expanding into other mass market stores, really kind of following along with Kefir, which we have for 40 years been bringing into mainstream. So our growth is remarkable. We've had 24 consecutive quarters year over year of growth. That's six full years of growth. both. We have year to date from just for 2025, we're at 157 million. That's compared to six years ago, we're up 123%. So we are on fire. Our shareholder return backs from six years ago when we announced Lifeway 2.0 plan back in November, exactly six years ago.

7:37Julie Smolyansky:Our shareholder return is 860%. So we are really, you know, just again, on fire. And this isn't just a trend. This is something that has been long happening, like in Eastern Europe. Go ahead. Well, I just wanted to we don't have a ton of time, but I wanted to make sure I got into what's been happening lately with the Danone interest, because back in September, Danone said it will no longer pursue an acquisition of Lifeway and said it's in the process of reviewing alternatives for its investment. It owns, according to the Bloomberg Terminal, about 22.7 % of the company. You guys said you will continue to explore value-enhancing opportunities.

8:14You've formed a strategic review committee. What's going to happen to Danone Stake?

8:20Julie Smolyansky:Well, they've registered their shares. So we will be looking for alternatives, just like you said. And we're really focused on our growth right now. We have a lot of opportunities, new products that we've launched, new collaborations and partnerships. We're expanding internationally. We're the number one brand in Mexico. But Julie, the alternatives that you guys are exploring, does that maybe also include maybe selling to somebody else? Or are you planning to continue to go it alone? I mean, we believe that we are a strong company independent, you know, as an independent company. But, you know, we always take every offer and evaluate it and make sure that all shareholders are going to benefit from any kind of transaction.

9:05Part of the agreement that you made with Danone was that you would separate the chair and CEO roles. So now you're continuing as CEO. You're no longer chair. That's right. How I mean, what what are you thinking about in terms of of of your commitment to the company? Are you staying on as CEO for like how many more years? What's your what's your plan?

9:26Julie Smolyansky:I don't have a crystal ball, but I am very much committed and dedicated to Lifeway. My father founded this company, and I have been CEO for 23 years, and it is my pride and joy. And we have done a tremendous, remarkable job in our growth, and I feel like we're just getting started. It really feels like that startup energy, founder energy every single day. I am very excited about some of the things. We've entered the zeitgeist of culture. And that's not by accident. That is by strategic marketing, strategic vision and leadership. And, you know, we were a wordle, a word in wordle. We had our very first NASCAR.

10:12Julie Smolyansky:We had the first ever Kiefer drone show in Chicago, which we're going to be making bigger next year. National Kiefer Day. So much more to come. Okay. Okay. We have to go. But we'll have you back soon. Julie Smolanski, she's CEO of Lifeway Foods. This is Bloomberg.

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