Edward Smolyansky, one of kefir maker Lifeway Foods’ biggest shareholders, has acquired a dairy plant in the US.
Smolyansky is engaged in a proxy campaign at Lifeway Foods after he and his mother Ludmilla filed a consent statement to unseat the company’s current board of directors, including CEO Julie Smolyansky, his sister.
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If the proxy campaign is successful, Mr Smolyansky will present the facility in Belmont, Wisconsin for review by Lifeway’s reconstituted board. Alternatively, his new venture, Pure Culture Organics, may use the plant as its first kefir production site.
The circa 100,000-square-foot factory will be repurposed for kefir production, with operations expected to start in 2025, a statement said. The facility can process approximately one million pounds of fluid milk per day, with the potential to scale capacity.
Part of the plant will also produce an alt-kefir beverage derived from almonds and cashews.
Mr Smolyansky said: “There doesn’t appear to be a non-dairy based kefir product in the United States right now, so several retailers have approached me about filling that void with a nut-based probiotic drink.
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By GlobalData“This facility’s unique footprint and capabilities should allow us to produce both products without the risk of allergy cross-contamination, a common issue in food processing plants.”
The facility was previously owned by Saputo, and was shut late last year to “further streamline” the Canadian dairy major’s manufacturing network in the US.
Mr Smolyansky added: “As the probiotic dairy market continues to grow post-pandemic, this plant will enable us to better meet increasing demand with efficient, large-scale production.
“It’s a prime example of how smart investment and innovation can drive sustainability while reducing costs.”
Lifeway Foods was founded by Michael Smolyansky in 1986 and run with support from his wife Ludmila. Following Michael’s death in 2002, his children Julie and Edward took over leadership, with Julie as CEO and Edward as COO.
However, in March 2022, Ludmila and Edward – who together own just short of 30% of the business – called for Julie Smolyansky to step down and for Lifeway to begin pursuing “strategic alternatives”.
The issue was said to have been resolved the following August, as Lifeway agreed to review strategic alternatives, as well as find a financial advisor and new replacements for its board.
However, the family feud has been rekindled in recent months. A statement last month from Ludmila and Edward was issued through Pure Culture Organics, a business Edward set up this year, calling for the CEO to leave.
The establishment of Pure Culture Organics sparked a legal dispute between the Smolyanskys. In April, Lifeway filed a claim against Pure Culture Organics, claiming it had stolen proprietary information to set up the business. Lifeway ended the lawsuit in June.
