Lifeway Foods Drinks Up Probiotic Kefir Competitor Fresh Made Dairy

Lifeway Foods, manufacturers of the probiotic dairy product kefir, announced the acquisition of Fresh Made Dairy on February 6, 2009. Lifeway will pay a reported $14.1 million for all shares of Fresh Made stock, according to a company release.


The deal will solidify Lifeway’s presence in the probiotic dairy market, as the company eliminates its closest competitor. Fresh Made rung up total sales of $10 million in 2008 and previously owned the No. 2 overall market share in the category. The deal made a great deal of sense from the perspective of Lifeway CFO, and incoming Fresh Made CEO, Edward Smolyansky. "We serve the same customers, we share the same shelf space, we purchase the same raw materials, and we exhibit at the same trade shows,” he said in a statement. “This transaction will enhance Lifeway's purchasing power, increase our ability to target our market category, and alleviate some of the competitive pressures in our business.”

The acquisition will also provide Lifeway with enhanced distribution access to the northeast part of the United States, an area where Fresh Made traditionally had a strangle hold on market share. Fresh Made products will still continued to be manufactured under the Fresh Made brand at its 25,000 square foot manufacturing facility in Philadelphia, Pennsylvania. With the exception of several top executives, Lifeway expects to keep Fresh Made’s entire workforce intact.

This transaction comes at a good time for Lifeway, despite the troubling economy. “Most of our input costs are at multi-year lows, including many of our production supply costs, transportation costs, and most of our raw materials, including milk,” said Smolyansky. “Milk prices are at multi year lows, with February, 2009, prices coming in at their lowest levels in six years. Additionally, with interest rates where they currently sit, the costs to finance a portion of the acquisition purchase price are also at all time lows.”

Lifeway Foods reported 15% growth in 2008, with sales of $44.5 million.

If you are an NBJ Subscriber Click to Read More:
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