Here are two brief analogies for Lifeway Foods (LWAY):

1. Chobani for kefir.

2. LaCroix for probiotic drinks.

• Kefir: A line of cultured dairy smoothies made with organic milk and 12 live and active probiotic cultures, available in various flavors and fat levels.
• ProBugs: Organic whole milk kefir specifically formulated for children, available in kid-friendly flavors and packaging.
• Plant-Based Cultured Beverages: A range of dairy-free, cultured beverages, such as oat or coconut-based drinks, providing probiotics for consumers seeking plant-based options.
• Organic Farmer Cheese: A soft, tangy, cultured cheese that is low in fat, high in protein, and made with organic milk.

Lifeway Foods (LWAY) primarily sells its products to other companies, specifically large grocery retail chains, natural food stores, and distributors, rather than directly to individual consumers.

While Lifeway Foods' public filings indicate a high concentration of sales to a few major customers (e.g., 43% and 12% of net sales to its two largest customers in 2023), the company does not disclose the specific names of these customers in its public reports.

However, based on its distribution channels and where its products are widely sold, Lifeway's major customers are likely to be prominent retailers and distributors in the food industry. Examples of large public companies that carry Lifeway products and could represent major customers include:

• Walmart Inc. (NYSE: WMT) - A leading global retailer with a significant grocery presence.
• The Kroger Co. (NYSE: KR) - One of the largest supermarket chains in the United States.
• Amazon.com, Inc. (NASDAQ: AMZN) - Through its ownership of Whole Foods Market and other grocery initiatives.
• Target Corporation (NYSE: TGT) - A major general merchandise retailer with a substantial food and beverage section.
• Albertsons Companies, Inc. (NYSE: ACI) - A large food and drug retailer operating across various banners.
• Sprouts Farmers Market, Inc. (NASDAQ: SFM) - A natural and organic food retailer.
• Costco Wholesale Corporation (NASDAQ: COST) - A membership-only warehouse club known for its bulk grocery offerings.

Julie Smolyansky, Chairperson of the Board, President, Chief Executive Officer

Julie Smolyansky became the youngest female CEO of a publicly held firm at the age of 27 in 2002, taking over Lifeway Foods after the sudden passing of her father, Michael Smolyansky, who founded the company in 1986. Under her leadership, Lifeway's annual revenue has grown significantly, from $12 million in 2002 to a projected $185-$200 million in 2024. She has overseen the expansion of Lifeway's distribution across the United States, Mexico, France, Ireland, and parts of Central and South America and the Caribbean. Smolyansky also co-founded Test400k, a non-profit organization dedicated to eliminating the backlog of untested rape kits in the U.S.

Eric Hanson, Chief Financial and Accounting Officer, Treasurer

Eric Hanson joined Lifeway Foods in July 2016 as Controller and was promoted to Chief Accounting Officer in May 2018, and subsequently to Chief Financial and Accounting Officer and Treasurer in November 2018. He brings over 20 years of experience in accounting and financial reporting. Before his tenure at Lifeway, Hanson served as Director of External Reporting for CPG International (now The AZEK Company) from 2014 to 2016 and as an Audit Manager for Deloitte & Touche from 2012 to 2014. He also held various audit positions with Crowe Horwath from 2003 to 2012. Hanson has a strong background in financial due diligence and has successfully managed numerous transactions for private equity firms.

Amy Feldman, Senior Executive Vice President of Sales

Amy Feldman was appointed Lifeway's Senior Executive Vice President of Sales in October 2018. She has more than 20 years of experience in the food industry, specializing in building businesses, brands, and teams, particularly within the Fresh and Natural Foods sector.

Elsa Burgos, Vice President Human Resources

Elsa Burgos serves as the Vice President of Human Resources at Lifeway Foods.

The accelerated and widespread consumer adoption of plant-based diets, coupled with significant innovation and market penetration of plant-based fermented food and beverage alternatives (e.g., oat, almond, and coconut milk kefirs and yogurts). While Lifeway Foods has introduced some plant-based options, its core business and brand identity remain heavily tied to dairy kefir. This trend represents a fundamental shift in consumer preferences for health, ethical, and environmental reasons, potentially eroding Lifeway's traditional dairy market share as consumers increasingly opt for compelling dairy-free probiotic alternatives from a growing array of competitors.

Lifeway Foods (LWAY) operates within several addressable markets for its main products, primarily kefir, farmer cheese, and probiotic oat milk. The market sizes vary by product and region:

• Kefir:

  • The U.S. kefir market was valued at approximately $162.1 million in 2019 and is projected to reach $241.9 million by 2027. Another estimate predicts the U.S. market to reach $296.13 million by 2032.
  • The North American kefir market was valued at $275.61 million in 2024 and is expected to reach $435.32 million by 2033.
  • Globally, the kefir market was valued at $1.23 billion in 2019 and is projected to reach $2.40 billion by 2032. Other projections place the global market at $1.8 billion in 2023, growing to $2.87 billion by 2032, or $1.83 billion in 2025, reaching $2.78 billion by 2030.

• Farmer Cheese:

  • Lifeway Foods produces farmer cheese, described as a pressed cottage cheese. The U.S. cottage cheese market was valued at $1.85 billion in 2025 and is projected to reach $2.65 billion by 2032. Annual sales for the U.S. cottage cheese market reached $1.75 billion for the 52-week period ending February 23, 2025.

• Probiotic Oat Milk (Lifeway Oat):

  • The global probiotic fermented oat milk market reached $1.21 billion in 2024 and is expected to grow to $3.84 billion by 2033.
  • The U.S. oat milk market is estimated at $0.86 billion (or $859.46 million) in 2025 and is expected to reach $1.56 billion by 2030.
  • The broader global plant-based probiotics market is forecast to reach $2,119.6 million by 2035, up from $1,108.2 million in 2025.

• Broader Fermented Probiotic Products Market:

  • The U.S. fermented milk market is valued at $40.2 billion in 2024 and is expected to reach $85.2 billion by 2035.
  • The global fermented milk market was valued at $292.50 billion in 2023 and is projected to reach $457.67 billion by 2032.
  • The U.S. probiotic drink market was estimated at $8.43 billion in 2022 and is expected to grow to $16.48 billion by 2030.
  • The global probiotic drink market was valued at $49.5 billion in 2024, with expectations to reach $116.9 billion by 2034. Other sources estimate the global probiotic drink market to grow from $40.1 billion in 2025 to $70.2 billion by 2032.

Lifeway Foods (LWAY) is expected to drive future revenue growth over the next 2-3 years through several key strategies:

1. Continued Volume Growth of Core Products: The company anticipates sustained volume-led growth, particularly for its flagship drinkable kefir and farmer cheese products. This growth is bolstered by increasing consumer interest in probiotic, gut-health-focused, protein-rich, and fermented foods.
2. Expanded Distribution and Enhanced Retail Presence: Lifeway Foods is actively expanding its product availability across major U.S. retailers, including recent placements in Amazon Fresh, BJ's Wholesale Club, CVS, Target, Publix, Whole Foods, and Costco. This broader distribution network aims to increase market presence and product accessibility.
3. New Product Innovation and Strategic Introductions: Lifeway is focusing on innovation, such as the launch of new probiotic smoothies with collagen, to meet evolving consumer preferences for health-focused options. These new offerings are designed to expand the product portfolio and capture additional market share.
4. Strategic Sales and Marketing Investments: The company consistently invests in sales and marketing initiatives to drive product trial, accelerate sales velocities, and strengthen brand loyalty. These strategic investments are crucial for creating demand and maintaining top-line growth.

Share Repurchases

• Lifeway Foods' Board of Directors approved a new share repurchase program on June 28, 2025, authorizing the repurchase of up to 250,000 shares over a two-year period, funded by available cash.
• In the fourth quarter of 2022, the company repurchased 850,340 shares of common stock from Ludmila Smolyansky.

Share Issuance

• Share issuances primarily consisted of common stock in connection with stock-based compensation.
• As of March 14, 2025, there were 15,203,241 shares of common stock outstanding, up from 14,690,987 shares outstanding as of March 15, 2024.

Inbound Investments

• On September 23, 2024, Danone North America PBC made an unsolicited proposal to acquire all shares of Lifeway it did not already own for $25.00 per share, an offer which Lifeway's board rejected, stating it substantially undervalued the company.
• In response to Danone's proposal and significant ownership stake, Lifeway's board adopted a limited-duration shareholder rights plan on November 5, 2024, which was subsequently extended to October 29, 2026.

Outbound Investments

• In August 2021, Lifeway Foods acquired GlenOaks Farms, Inc.

Capital Expenditures

• Lifeway Foods reported capital expenditures of $6.682 million in 2024, $4.410 million in 2023, $4.029 million in 2022, and $1.922 million in 2021.
• Capital spending is focused on growth, cost reduction, and facility improvements, including increased production capacity, new product innovation, and enhancing manufacturing efficiency, safety, and productivity.
• The company announced the completion of the first phase of a production capacity expansion at its Waukesha, Wisconsin facility in Q2 2025, aimed at doubling its production capacity.