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March 1, 2022

US kefir maker Lifeway Foods embroiled in family feud

Two family members want the Illinois-based company to pursue "strategic alternatives".

By Andy Coyne

Lifeway Foods, a US-based manufacturer of fermented milk product kefir, has become the subject of an apparent family feud after directors Ludmila and Edward Smolyansky moved to remove Julie Smolyansky as the company’s CEO.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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The two directors want the Illinois-based company, established by Ukrainian immigrants in 1986, to pursue “strategic alternatives” .

Ludmila, Julie’s mother and Edward, her brother, together own 34.9% of the company’s shares. Julie, who became Lifeway’s CEO in 2002 at the age of 27, has a 13.2% stake in the firm.

Ludmila is the company’s chairperson and Edward was its COO until he was ousted in January.

French dairy giant Danone owns 22.4% of Lifeway.

On 25 February. Lifeway confirmed Ludmila and Edward Smolyansky’s request for their relative’s removal as CEO in an SEC filing.

“The reporting persons notified the board of directors of Lifeway Foods, Inc. of their belief that the company should replace the company’s chief executive officer and commence an exploration of the company’s strategic alternatives,” it said.

Some analysts suggest that one of those alternative strategies could be a sale of the business.

In August, Lifeway, which has annual revenues of around US$120m, acquired GlenOaks Farms, a local probiotic drinkable yogurt brand founded in 1984, for $5.8m and in September sought to extend its product portfolio with the launch of oat milk.

Danone did not want to comment on the situation or on its strategy for its investment in Lifeway when contacted by Just Food. Lifeway did not respond to a request for comment.

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Free Report
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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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