US dairy kefir maker Lifeway Foods has said its recent expansion into the UK positions the company to pursue additional distribution opportunities throughout Europe.
Lifeway last week announced a deal with upmarket department store Harvey Nichols for the sale of its frozen kefir probiotic dairy product. The retailer will sell four of the brand’s flavours – vanilla, raspberry, strawberry and mango – in 500ml packages.
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Lifeway CEO Julie Smolyansky said the deal with Harvey Nichols is an “exciting opportunity” for the company as it expands the brand internationally.
“Overseas expansion takes advantage of strong growth in the UK frozen yoghurt market, in which sales in the UK have increased 50% with the wave of new fro-yo shops across the region. Most importantly, Lifeway’s expansion into the UK also positions the company to pursue additional distribution opportunities throughout Europe and as the global wallet share for natural foods continues to climb.”
Smolyansky told analysts on the firm’s first-quarter earnings call the market for organic food and beverages in Europe is the largest worldwide, accounting for almost half of all global sales of organically grown products.
“We believe Harvey Nichols is an ideal launching pad in the UK and a solid first step in a broader initiative to bring kefir and our related products to interested consumers anywhere in the world.”
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By GlobalDataTaglich Brothers analyst Howard Halpern suggested Lifeway might be looking to mirror the success it has achieve with kefir in the US, in the UK.
Smolyansky, however, suggested there was no set agenda or sales target for the UK market.
“I don’t think that we have any expectations … it’s a new area for us. We’re really building a foundation. Lifeway is not known in Europe, and Lifeway is not known in UK or London. So we are really testing this out there’s a couple of different models that we can look at, and we’re exploring all options.
“We’re going to kind of go conservatively and see what happens and test the waters and make tweaks as we go. But it’s the beginning hopefully of other things to come down the line. But I don’t have major expectations and won’t even begin to try to plan or project two years down the line.”
Smolyansky said Lifeway might look to introduce more of its products to the UK if kefir is a success.
“The boundaries have changed, social media, the Internet and the ease at which we communicate with each other has taken the walls and barriers away from this. You can do it very conveniently, cost-effective and feeling like you’re there. Britain is a good friend of America and agreements are very complementary, I think.”
Lifeway yesterday announced it had doubled its earnings in the first quarter of the year. Earnings in the three months to the end of March amounted to US$2.4m. This compared to a net profit of $1.1m in the comparable period last year.
