Kefir maker Lifeway Foods posted a loss for 2008 as charges on marketable securities offset rising sales.

The US group booked a loss of US$733,647 after an “impairment to marketable securities” of $958,879.

However, the company said it would be able to deduct the loss on its tax return this year as capital gains generated on those marketable securities in the previous three years offset the loss in 2008.

Lifeway’s consolidated sales for the year increased 15% from 2007 to reach $44.5m. The figure was boosted by increased sales and awareness of Lifeway’s flagship product, Kefir and ProBugs, the company’s organic kids oriented Kefir. The Lifeway ProBugs line grew 124% year on year.

CEO Julie Smolyansky said: “The last quarter of 2008 and December 2008 specifically proved to be a historically challenging environment. Retailers and consumers slowed purchasing and reduced inventory levels. We feel this was a temporary slowdown as was evident in the quick bounce-back we have seen in sales for the first quarter of 2009, which were about 15% higher than the previous quarter.”

Total consolidated sales for the fourth quarter of 2008 increased 4% to $10.57bn as flagship brand Lifeway grew 8% compared to the same quarter in 2007.

Fourth-quarter gross profit, however, decreased 10% to $1.9m due to an increase in labour expenses and the costs of packaging supplies and transportation expenses.

Operating expenses as a percentage of sales was around 19% during the fourth quarter 2008, compared to about 20% in the comparable period of 2007.

CFO Edward Smolyansky added: “The average cost of conventional milk on the whole was similar in 2008 compared to 2007, but we have seen those prices significantly drop off beginning in February 2009. This along with the robust cash flows we experiencing from the recent Freshmade acquisition should give us the necessary leverage we need to continue to invest in our brand and continue to drive revenues in 2009.”