Lifeway Foods CEO Julie Smolyansky’s relatives are once again seeking to oust her and the company’s board of directors, reigniting a years-long dispute.
Her brother, Edward Smolyansky and mother, Ludmila Smolyansky filed a consent statement with the U.S. Securities and Exchange Commission this week. The two shareholders argue 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.”
The chief executive’s two relatives also argue in the filing that the fermented milk business needs a fresh approach with new leaders at the helm at Lifeway Foods.
In an interview with Food Dive, Edward Smolyansky said there is a lack of real leadership at the kefir producer.
“No one is actually running the company. It is on autopilot,” Edward said. “The board has no idea what’s going on. Julie and her team are not present. They don’t understand trends. They are behind the curve and are woefully under investing in marketing.”
Lifeway Foods and the chief executive did not respond to a request for comment on the SEC filing or Edward’s comments at press time.
Michael and Ludmila Smolyansky founded the company nearly 40 years ago. When Michael died in 2002, their daughter Julie took over as CEO at age 27 while their son Edward served as chief operating officer until 2022. Edward now serves as the president of a rival kefir company, Pure Culture Organics.
Ludmila Smolyansky said that while the decision to file the consent statement was not easy, she is focused on what is best for Lifeway Foods. “The company, started by my husband and me in 1986, needs a fresh direction that honors its legacy while securing its future,” she said in a statement. “A new path forward will benefit everyone — our employees, our shareholders, and even my daughter Julie.”
Lifeway believes its current strategy is benefiting the company. In June, the company reported a 13% year-over-year increase in sales, netting $160 million in 2023.
In an interview with Food Dive in June, Julie Smolyansky said the pandemic era brought a new wave of consumers interested in gut health, which the company has maintained.
The chief executive’s brother disagrees with his sister, stating Lifeway has “been growing at the same rate for the last 20 years.” Edward said the company has fallen behind other leading brands in the cultured dairy space, including Chobani and Siggi’s, because of the failures of Lifeway’s leadership.
“We’re stuck in the mud because my sister is more interested in paying her and her cronies to sit around and do nothing while they feed off of the shareholders’ money,” Edward said. “They’re ethically challenged. What employees are going to follow you when the people who are essentially running the company are borderline criminals?”
