Action Follows Successful Tests of Yogurt-Like Beverage in Several Major Cities

MORTON GROVE, Ill./PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY - news) today announced that it is expanding distribution of its new cultured beverage product La Fruta(TM) to Hispanic markets across the country. La Fruta, a yogurt-like drink similar to a milkshake or smoothie, will be sold through retail chains and specialty grocery stores in Hispanic neighborhoods across the country in four fruit-based flavors.

The decision follows successful tests in several major cities with large Hispanic populations during the summer and fall. In response to those tests, conducted under the private label Yogurito, participating retailers expressed interest in nationwide distribution. Lifeway has agreed to supply the La Fruta product in strawberry, banana/strawberry, mango and pina colada varieties.

"The Hispanic market is the fastest-growing demographic in the United States and we are extremely excited to be entering this new market," said Mike Smolyansky, President and CEO of Lifeway. "Our 2001 fiscal year is our best to date, and with this expanded distribution and new products that are now in the pipeline, we are optimistic that we will set new records in 2002."

Lifeway Kefir has a creamy, slightly effervescent taste reminiscent of drinkable yogurt but with more than double the amount of live and active cultures. These friendly microorganisms, known as "probiotics" (literally "beneficial to life"), deliver a wide variety of health benefits ranging from easier milk digestion to restoration of the beneficial intestinal bacteria destroyed in the course of antibiotic treatment. This makes it possible for consumers to obtain good taste and good health in the same beverage.

Lifeway is a manufacturer of cultured, probiotic and functional food products and is America's leading supplier of the cultured dairy product known as kefir. The Company markets 12 flavors of kefir and does a successful business exporting its products to Eastern Europe and Canada. The Company continues to market a dairy based immune-supporting dietary supplement beverage called Basics Plus(TM), as well as Kefir Starter for consumers to make kefir at home or in travel. With the recent introduction of America's first non-dairy soy kefir called SoyTreat(TM) as well as Lifeway Organic(TM), the Company has entered into the organic and soy milk market.

For more information, visit www.lifeway.net or www.kefir.com

SOURCE: Lifeway Foods, Inc.