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Lifeway's CEO talks about making kefir a household name and why she holds a grudge
Julie Smolyansky took over Lifeway Foods in 2002 after her father, Michael Smolyansky, died of a heart attack at 55. The Morton Grove-based maker of kefir, a yogurtlike probiotic drink, has grown from $12 million in revenue to more than $80 million with Julie Smolyansky at the helm. The CEO talks about what’s next as Americans develop a taste for kefir, and she dishes on holding a grudge against those who didn’t believe a then-27-year-old woman could run a public company.
Grid: Lifeway controls 97 percent of the kefir market. What is your approach as demand grows by leaps and bounds?
JS: I have no doubt in my mind that competition is coming down the pipeline. I think it’s kind of natural. Like Red Bull – a lot of other players came in, but there’s only one Red Bull. We’re a brand that has sustained for 26 years, we have a great story, and our consumers are really loyal to our brand. So we want to position ourselves as the gold standard, the very transparent, authentic brand with real people behind it. We’re not just here for a quick buck, which so many companies, when they start launching, it’s like: “Me too, me too. I want a piece of that.”
We’re in a sweet spot, where we’re not big enough for the really big brands to do it yet, and we’re too big for a startups or a really small brands to compete with us, so it’s a nice place to be.
We’ve always been really careful about how fast we grow, we don’t push too hard, which I think has been our saving grace. We’ve never gone into debt to try to build our brand, which is also really important. A lot of companies are in it for the short term. They want to build it really quick and then they want to get out. That’s never been of interest. It’s always been a long-term family business.”
Grid: Was there a point at which you thought of stepping away?
JS: No. Never. I mean, I was overwhelmed a lot, but I never thought that I would let someone else do it. It was a mix between loss and mourning and really missing my dad and feeling like the world was toppling in on me, to just being overwhelmed in regular business day-to-day. My brother (Lifeway Chief Financial Officer Edward Smolyansky) was equally kind of going through these things with me, and I think we just went day-by-day and issue-by-issue and kind of hired people as we needed to.
And that I think was the one big thing, but we both really had the sense that failure wasn’t an option, and our parents worked really hard to get to a certain space. We were Russian immigrants, we came to the U.S. in 1976. I guess I just compared it to the fact that when my mom and dad came to the U.S., they didn’t have any language, they didn’t have any money, they came with $100 in their pocket, they didn’t have any friends, they didn’t have any network, so they overcame those obstacles and challenges and landed on their feet with multiple businesses. And people literally said to me at my dad’s funeral which I’ve talked about so many times, ‘There’s no way this girl can run a public company,’ they just didn’t believe it and they already felt that it was too big for me to run.
Grid: How did you react when Lifeway stock plummeted after your father’s death?
JS: It was pretty devastating, and scary. It was really scary. And just to know that it was all of our friends that were selling; it was all our friends that weren’t supporting us. So that was really tough. Do I hold a grudge? Yes, I do. I don’t speak to anybody who was a former friend. I mean, we had 400 people at my wedding and I can count on two hands how many friends I had left from my father’s friends. Nobody called in the weeks after to say, “How are you doing?” There was a small handful of close real friends. The rest of them didn’t really believe.
Photo by Mike Schwartz