Lifeway Posts Record Growth Amid $45M Production Facility Expansion

Leading U.S. kefir brand Lifeway Foods posted its 24th consecutive quarter of growth, with net sales up 24% year-over-year to $57.1 million, in its third-quarter earnings report this morning.

The net sales growth was “entirely volume-led,” according to CEO Julie Smolyansky, driven by “explosive” demand for the brand’s flagship kefir and high-protein Farmer Cheese. During prepared remarks on Wednesday, Smolyansky called Lifeway’s growth “consistent and sustainable.”

The company attributed the strong topline growth to several factors, including rising demand for protein-rich probiotic functional foods, heightened awareness of the gut’s role in overall health and an increase in GLP-1 users seeking nutrient-dense foods.

“We are at the forefront of these trends, which show no signs of slowing down, and we are investing heavily in our marketing efforts and manufacturing capabilities to support our accelerating velocities to comfortably meet growing demand,” said Smolyansky.

Lifeway’s most recent portfolio addition, Muscle Mates, taps into the “exploding” creatine market, which has seen triple-digit growth at certain retailers in recent years, according to the company. Available in three flavors at launch – Mixed Berry, Strawberry Banana and Vanilla – each 8 oz. bottle delivers 20 grams of protein and 5 grams of creatine.

Capitalizing on the power of collaboration, the company is also expanding its reach through innovative launches and immersive experiences. Lifeway recently completed its second partnership with Erewhon – the Love Your Gut Pumpkin Spice Smoothie – in October. Now, the company is embarking on its “Sorority Tour” to introduce young women to the benefits of gut health.

Earlier this week, Lifeway initiated phase two of its four-phase, $45 million project to double production capacity at its Waukesha, Wis., facility, increase operational efficiencies and expand production hours and staffing. The second phase is focused on installing a cooling system to support the company’s expanded fermentation and bottling operations.

Phase one, completed in September, included installing additional fermentation tanks to combine raw milk with live kefir cultures. To date, Lifeway has invested over $9 million in the project.

The facility improvements thus far, alongside strong volume growth, have aided margin expansion. In the most recent quarter, Lifeway’s gross profit margin was 28.7%, up 300 basis points from last year.

In the third quarter, the company also expanded distribution across key product channels. This included placement in “everyday places” at BJ’s Wholesale Club and a rotation at Costco in San Diego. Looking ahead to the fourth quarter, Smolyansky said Lifeway “has visibility” into a significant nationwide distribution expansion for its Farmer Cheese.

“What we have accomplished is extraordinary, but our momentum is only intensifying. We’re well on pace to deliver our strongest annual sales in company history in 2025 and are operating from a position of strength,” said Smolyansky.

The strong results come after Lifeway and Danone North America last month entered a cooperation agreement, which includes an “orderly refreshment” of Lifeway’s board of directors. Danone agreed to “not act by written consent in favor of proposals” in the consent solicitation filed by Smolyansky’s family members, Edward and Ludmila Smolyansky, who have led efforts to unseat Julie from control of the company.