Lifeway Foods has forged an agreement that could ratchet down a feud between key family shareholders and its CEO, and set the stage for the kefir maker’s future.
In an agreement announced late last week, Lifeway said its board’s Audit and Corporate Governance Committee will lead a review of strategic alternatives for the company. No timeline was given for its completion. In the company’s July 27 8-K filing with the Securities and Exchange Commission, Lifeway said the committee had the authority to hire advisors, attorneys and accountants for the process, and will work with a financial advisor to help it explore strategic alternatives.
In February, Lifeway founder and chair of the board Ludmila Smolyansky and her son Edward Smolyansky had called for the company to take this step, after pushing for the removal of Julie Smolyansky as CEO, according to an SEC filing. Julie Smolyansky is the daughter of Ludmila and sister of Edward, who together control 38.2% of Lifeway’s shares. Food giant Danone has 22% share of the company.
At the time, the mother and son did not share why they were seeking Julie Smolyansky’s ouster. However, Lifeway’s sales had flagged in recent years, falling from $123.9 million in 2016 to $102 million in 2020. The trend has since reversed itself, with the company reporting last month that net sales in 2021 rose 16.7% to hit $119.1 million. Lifeway mainly credited higher volume sales of its kefir, and noted some impact from its acquisition of drinkable yogurt brand GlenOaks Farms in the third quarter.
Meanwhile, Ludmila and Edward Smolyansky agreed to withdraw nominees they had submitted previously and vote in favor of Lifeway's roster at the annual meeting, slated for Aug. 31. They include Ludmila and Julie Smolyansky; former board member Juan Carlos Dalto, president of Americas for Dole Sunshine Co.; Perfecto Sanchez, founder of Keep The Change Consulting; existing independent board members Jodi Levy, Jason Scher and Pol Sikar; and current board member Dorri McWhorter.
“I'm energized by the new members that we plan to welcome to the Board,” said Julie Smolyansky, who took over leadership of Lifeway in 2002. “They are an incredible group of individuals whose skill sets and purpose-driven principles sync up perfectly with the Lifeway mission. We have an amazing team, and we're poised to deliver value to our shareholders, great products to our customers and exceptional company culture to our employees."