Lifeway also disclosed its second-quarter results today (13 August), reporting a 25.3% year-on-year increase in net sales to $49.2m.
Ludmila and Edward Smolyansky, the largest shareholders in US-based kefir producer Lifeway Foods, have submitted a consent statement seeking to remove the company’s current board of directors, including CEO Julie Smolyansky.
The shareholders announced the filing with the US Securities and Exchange Commission today (13 August), thereby launching their “Life Back to Lifeway” campaign.
Ludmila and Edward – the mother and brother of CEO Julie respectively – are aiming to bring in leadership “committed to revitalising the company with a strategic vision aligned with the best interests of its shareholders,” according to a statement.
The pair added: “The Lifeway board has overseen significant and repeated failures of corporate governance that have harmed the business and its employees and driven poor financial results for shareholders.”
Lifeway also revealed its second-quarter results today, showing net sales growth of 25.3% year-on-year to $49.2m. The company attributed the rise to “higher volumes of our branded drinkable kefir.”
Net income reached $3.8m, up from $3.2m the previous year.
Edward Smolyansky, former COO of Lifeway Foods, nevertheless commented today: “Under my sister Julie’s authority, Lifeway has been on autopilot for far too long, missing critical market opportunities due to a lack of strategic vision. It’s time for a fresh approach to leadership that prioritises growth and innovation over personal agendas.”
Ludmila Smolyansky, former chairperson of Lifeway Foods, added: “This decision hasn’t been easy, but my focus is on what’s best for Lifeway. The company, started by my husband and me in 1986, needs a fresh direction that honours its legacy while securing its future. A new path forward will benefit everyone – our employees, our shareholders, and even my daughter Julie.”
Food Future has contacted Lifeway for comment on the latest development in the ongoing feud.
Lifeway Foods was founded by Michael Smolyansky in 1986 and was run with support from his wife Ludmila. Following Michael’s death in 2002, his children Julie and Edward took over leadership, with Julie as CEO and Edward as COO.
However, in March 2022, Ludmila and Edward – who together own just under 30% of the business – called for Julie Smolyansky to step down and for Lifeway to begin exploring “strategic alternatives.”
The issue was believed to have been resolved in August of that year when Lifeway agreed to review strategic alternatives, as well as to engage a financial advisor and seek new replacements for its board.
However, the family feud has resurfaced in recent months. A statement issued last month by Ludmila and Edward, through Pure Culture Organics, a Lifeway competitor founded by Edward this year, reiterated their call for the CEO to step down.
The establishment of Pure Culture Organics sparked a legal dispute between the Smolyanskys. In April, Lifeway filed a claim against Pure Culture Organics, alleging that proprietary information had been stolen to establish the business. Lifeway withdrew the lawsuit in June.
Also last month, the kefir maker responded to Ludmila and Edward. A Lifeway statement read: “Edward and Ludmila Smolyansky’s conduct in recent litigation demonstrated repeatedly that they do not have Lifeway’s best interests at heart.”
