A bitter struggle for control is emerging as a significant threat to the positive momentum at Lifeway Foods, the probiotic and kefir producer. Despite the company posting record operational results, a major shareholder is pushing for a complete overhaul of the board of directors, leading to a public war of words. This internal conflict leaves investors weighing which faction to trust amidst the corporate turmoil.
Operational Strength Amidst Governance Chaos
The leadership crisis unfolds against a backdrop of robust financial health. For the third quarter of 2025, Lifeway Foods reported solid figures, demonstrating underlying business strength:
- Net Sales: Reached $57.1 million, representing a 29% increase on a comparable basis.
- Gross Margin: Expanded significantly by 300 basis points.
- Net Income: Grew by 19%.
This performance was fueled by sustained demand for its flagship kefir products and its protein-rich Farmer Cheese line, alongside benefits from strategic capacity expansions like its facility in Waukesha.
Proxy Fight Reaches Critical Juncture
The conflict has now entered a decisive phase. Edward Smolyansky, the former Chief Operating Officer and a substantial shareholder, has filed an official proxy statement with the U.S. Securities and Exchange Commission (SEC). His objective is a “comprehensive change” to the board, aiming to address what he calls failures in governance, value destruction, and entrenched leadership practices.
Should investors sell immediately? Or is it worth buying Lifeway Foods?
Smolyansky is actively soliciting votes for his slate of director nominees, which includes himself and George Sent. He is urging shareholders to withhold support from current directors Dorri McWhorter, Jason Scher, and CEO Julie Smolyansky. Furthermore, he advocates for establishing a special committee to review the company’s management, its strategic plan, and various strategic alternatives.
A Clash of Accusations
The dispute intensified following a December 3, 2025, shareholder letter from Edward Smolyansky. In it, he accuses the incumbent board of disseminating “misleading and false public statements” about his nominees. He criticizes what he sees as a distraction through “personal attacks” and “distorted narratives” away from core governance issues and states he is considering legal action.
Lifeway Foods had issued a rebuttal on December 2, 2025. The company expressed “serious concerns” regarding the qualifications and intentions of both Edward Smolyansky and George Sent. The statement referenced Smolyansky’s termination for cause from his COO role in 2022, alleging misconduct that included false negative social media posts and building a competing business. It also raised questions about his financial stability and legal issues involving his mother. The current leadership asserts that the board is optimally positioned to drive future success, whether independently or via a transaction, and calls on shareholders to reject the dissident group’s proposals.
Market Analysts Maintain a Cautiously Optimistic View
Despite the public feud, market observers appear convinced by the firm’s fundamental business metrics. The consensus rating for Lifeway Foods shares stands at “Moderate Buy.” Among three covering analysts, two recommend a “Buy” while one advises a “Hold.” The average 12-month price target is $34.00, implying a potential upside of over 42% from the current trading level of approximately $24. The target range spans from $33.00 to $35.00. This suggests that some market experts believe the intrinsic value of the company’s position in the kefir market is not fully reflected in its current share price, which is weighed down by governance uncertainty.
Ad
Lifeway Foods Stock: Buy or Sell?! New Lifeway Foods Analysis from December 6 delivers the answer:
The latest Lifeway Foods figures speak for themselves: Urgent action needed for Lifeway Foods investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 6.
Lifeway Foods: Buy or sell? Read more here...
