Lifeway Announces “3.0” Strategic Plan Following Return to Growth

In 2018, fermented dairy brand Lifeway announced the beginning of “Lifeway 2.0,” a strategic revitalization plan to invigorate growth and expand the brand internationally. Now, speaking today at the virtual 2022 ICR Conference, CEO Julie Smolyansky said the goals of the plan have been achieved and the company is now beginning a new phase: “Lifeway 3.0.”

“We have fulfilled our mission of our 2.0 plan,” Smolyansky said during the presentation. “Some of that included focusing on our core rebuilding of distribution, expanding our footprint, innovating some of our [packaging design, and] increased our trial with consumers.”

When the Lifeway 2.0 initiative began in 2019, the publicly traded kefir maker had faced painful declines, reporting 15% revenue revenue decline and an operating loss of about $599,000 in its Q3 2018 earnings report.

Now, Smolyansky said the company has rebounded stronger than ever. In a preview of the company’s full year earnings result, she said projected net revenue for 2021 is between $117 million and $118.5 million. As of September 2021, top line growth was up 15.2% year-over-year, with gross profit up by $2.2 million. In 2020, net sales grew 8.9% to $102 million from 2019.

In particular, the company benefitted long term from March 2020’s pantry-loading sales surge, retaining about 41% of new consumers who tried the brand during the early days of the pandemic. Now, with kefir sales expected to grow by 11% by 2025, Smolyansky said the company has found itself at the center of multiple macro trends for food and beverage, including increased demand for “protein-packed nutrition” and convenient, on-the-go health and wellness products.

Much of the benefit has come through a diversified product portfolio that now includes plant-based oat products, cheese, and kids drinks – however the core kefir line still comprises 76% of the business. A new functional mushroom adaptogen line was also announced last year.

Last summer, Lifeway acquired California-based yogurt maker GlenOaks Farms for $5.8 million. According to Smolyansky, Lifeway intends to expand the GlenOaks brand this year across the West Coast and debut new innovations, with a broader goal to optimize cross-brand broker and co-packer agreements and expand the brand nationally in 2023.

Looking ahead, Lifeway is also eyeing international growth and aims to scale the business in the U.S., Mexico, the U.K., Ireland and France, Smolyansky said. As the global market for probiotic products is expected to surpass $64 billion by next year, per Mintel data, Lifeway will continue to highlight its gut health bonafides in its marketing for the foreseeable future, she added, making “self care” a leading message for its 2022 marketing initiatives.

“The diversity of your bacteria in your gut is being linked to everything from addiction to suicide to eating disorders, and there is a solution in that as well,” she said. “So the fact that we at Lifeway are bringing this powerful staple product [kefir] to consumers, and doing so in a fun way is really exciting and something that I think is contributing to our success.”