Ludmila and Edward Smolyansky, the largest investors in US-based kefir producer Lifeway Foods, have filed a consent statement to unseat 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 – mother and brother of CEO Julie respectively – are trying 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, where net sales grew 25.3% year-on-year to $49.2m. The business said the rise was “was primarily driven by higher volumes of our branded drinkable kefir”.
Net income reached $3.8m, up from $3.2m the year before.
Edward Smolyansky, former COO of Lifeway Foods, nevertheless said 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, co-founder and 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 honors its legacy while securing its future. A new path forward will benefit everyone - our employees, our shareholders, and even my daughter Julie.”
Just Drinks has contacted Lifeway for comment on the latest update on the feud.
Lifeway Foods was founded by Michael Smolyansky in 1986 and 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 short of 30% of the business - called for Julie Smolyansky to step down and for Lifeway to begin pursuing “strategic alternatives”.
The issue was said to have been resolved the following August, as Lifeway agreed to review strategic alternatives, as well as find a financial advisor and new replacements for its board.
However, the family feud has been rekindled in recent months. A statement last month from Ludmila and Edward was issued through Pure Culture Organics, a Lifeway competitor Edward set up this year, calling for the CEO to leave.
The establishment of Pure Culture Organics sparked a legal dispute between the Smolyanskys. In April, Lifeway filed a claim against Pure Culture Organics, claiming it had stolen proprietary information to set up the business. Lifeway ended the lawsuit in June.
Also last month, the kefir maker hit back at Ludmila and Edward. A Lifeway statement said: “Edward and Ludmila Smolyansky’s conduct in recent litigation demonstrated repeatedly that they do not have Lifeway’s best interests at heart.”
