Lifeway Foods Inc. Faces Board Shake-Up Amid Legal Dispute

In a dramatic turn of events, Lifeway Foods Inc., a leading U.S. supplier of kefir and fermented probiotic products, finds itself at the center of a contentious boardroom battle. The company, known for its strong performance in the health food sector, is currently urging shareholders to disregard a consent solicitation statement filed by Edward and Ludmila Smolyansky, who collectively control approximately 23.2% of the company’s shares.

Background and Performance

Lifeway Foods, headquartered in Morton Grove, Illinois, has been a significant player in the consumer staples sector, particularly within the food products industry. The company has demonstrated robust financial health, with a close price of $25.95 as of July 1, 2025. Over the past five years, Lifeway has delivered impressive shareholder returns of 788% and achieved approximately 100% revenue growth from FY ‘19 through FY ‘24. These figures underscore the company’s strategic success and market resilience.

The Smolyanskys’ Move

On July 2, 2025, Edward and Ludmila Smolyansky filed a definitive consent statement with the U.S. Securities and Exchange Commission (SEC), aiming to replace the entire board of directors at Lifeway Foods. Their proposals include repealing recent bylaw amendments, removing current directors, electing seven new board members, and prohibiting immediate family employment in executive positions. The Smolyanskys have criticized the current board, led by CEO and Chair Julie Smolyansky, for disregarding shareholder feedback and lacking strategic direction.

Lifeway’s Response

In response, Lifeway Foods has issued a strong rebuttal, asserting that the Smolyanskys’ consent solicitation statement violates Illinois law and the company’s organizational documents. The company specifically points out that the Smolyanskys’ statement improperly sets a record date for their proposals and fails to meet proper shareholder notification requirements. Lifeway has urged its shareholders to disregard the Smolyanskys’ communications, labeling them as legally deficient.

Looking Ahead

As the situation unfolds, Lifeway Foods remains focused on its strategic goals and maintaining its trajectory of strong financial performance. The company continues to emphasize its commitment to maximizing shareholder value and delivering innovative probiotic products to its customers. The outcome of this boardroom battle will be closely watched by investors and industry observers, as it could have significant implications for Lifeway’s future direction and governance.

In the meantime, Lifeway Foods is likely to engage in further communications with its shareholders to reinforce its position and ensure continued support. The company’s ability to navigate this challenge will be a testament to its resilience and strategic acumen in the competitive health food market.