Lifeway Continues Growth Streak in Q1 on Back of Drinkable Kefirs

Leading U.S. kefir brand Lifeway Foods had its 22nd consecutive quarter of year-over-year growth, with net sales up 3.3% to $46.1 million, in its Q1 2025 earnings report this morning.

The net sales growth was fueled primarily by volume improvement for Lifeway’s line of branded drinkable kefirs and its farmer’s cheese, the company reported.

Gross profit as a percentage of net sales during the quarter was 24%, while expenses as a percentage of net sales was 20.2%.

Headwinds came from higher prices for milk, as well as promotions and slotting fees related to distribution expansion, said Lifeway CEO Julie Smolyansky on a call with investors and analysts.

Smolyansky attributed the strong topline growth to several factors, such as rising demand for “protein-rich, probiotic and bioavailable foods” as well as recent business decisions, including one to drop a private label retail relationship “that contributed meaningfully to net sales on a quarterly basis” in order to emphasize its own branded portfolio and increase margins.

Smolyansky also cited a move by “a sizable distributor” in late 2024 to shift orders from delivery to direct pick-ups, lowering both billed sales and freight costs. She said the move was “accretive to profits and margins.”

“Excluding the impact from both of these strategic adjustments, on a like-for-like basis, we delivered nearly 11% volume-led growth in the quarter, underscoring the power of our Lifeway branded products and the loyalty of our growing customer base,” Smolyansky said in a statement.

“Our strategic sales and marketing investments are clearly paying dividends, driving increased brand recognition, strong product velocities, and introducing the Lifeway brand to more and more customers who value premium, nutritious offerings,” she added.

Lifeway will continue to market around the rise in GLP-1 drug use, as Smolyansky noted that the brand’s products can help to “naturally stimulate GLP-1 hormone production” and have a long runway for growth from consumers adopting the medication.

She noted that so far in 2025, Lifeways received commitments from retailers for over 2,000 new points of distribution across all of its product lines, including Farmer Cheese, Flavor Fusions kefirs and its new Probiotic Smoothies with Collagen.

The business is also well-positioned to withstand the brunt of tariffs, as Smolyansky said that the company is seeing “no impact” currently or for the foreseeable future.

“The second quarter is off to a good start, and we plan to continue our investments behind our core branded products in 2025 to further capitalize on the tremendous market opportunity in front of us and extend upon the vast momentum we have achieved,” she said.