BusinessWeek.com
December 18, 2006
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From Russia, with Yogurt
After her father died in 2002, Julie Smolyansky took over her family company, Lifeway Foods, and the then-27-year-old had to grow up fast
Lifeway Foods (LWAY) has been a fact of life for 31-year-old Chief Executive Officer Julie Smolyansky for more than two decades. Her father, Michael Smolyansky, founded the Morton Grove (Ill.) health-food maker in 1986. Since the younger Smolyansky took over in 2002, shares of the company have risen more than 650%, adjusted for splits, as of afternoon trading Dec. 15. Operating income was up 30% for the first nine months of 2006, compared to the same period last year, on 27% revenue growth.Lifeway makes a creamy, yogurt-like drink called kefir, available in 12 flavors at supermarkets nationwide, including Whole Foods (WFMI) and Wild Oats (OATS). The company's products also include its Drinkable Yogurt and Farmer's Cheese brands, along with Basics Plus dietary supplements. Last year Lifeway launched ProBugs, an organic kefir line aimed at children.
Successful Immigrants
The company started much smaller, however. In 1976, the Smolyansky family emigrated from Russia to Chicago. Nearly 10 years later, Smolyansky's parents rediscovered kefir, a Russian staple, at a food show. Her deli-owner mother and engineer father hit upon the idea of producing kefir themselves for the U.S. market, and soon they were planning recipes in the basement after work.The local media seized on this feel-good story at the height of the Cold War, and the business expanded quickly. Someone, Smolyansky recalls, told her father he should go public. "He didn't even know what that meant," she says. "He went to the local library, about seven blocks away from our offices right now, looked it up, researched what it meant, wrote his own business plan, and found his own investors. He did it all very nontraditionally."
In 1997, Smolyansky began working with her father part-time a year after graduating from the University of Illinois at Chicago. She had never paid much attention to the company or the products, she says, but became drawn to the business and the role she felt she could play there. Smolyansky left graduate school a year later to join Lifeway as director of sales and marketing.
Taking Charge
In June, 2002, Smolyansky's father died of a heart attack, and she stepped in to succeed him at the age of 27. Shares plunged as much as 29.3% the session after the news, leading the Nasdaq to halt trading. "Overnight my life changed just unbelievably," Smolyansky says. "Not only was I mourning the loss of my father, but I was also trying to keep the company together and leading our staff and suppliers to make sure they knew that everything was O.K. Even at my father's funeral, I'd heard people behind my back saying, 'There's no way a little girl's going to run a company like this.' "Nothing could prepare Smolyansky for those challenges, but she was used to juggling the type of busy schedule that is the CEO's daily routine. In high school, she was always doing something, she recalls: figure-skating, playing tennis, organizing a silent auction for a local battered-women's shelter, or leading a community-service organization. "I was always leading people, and I was always overbooked in my calendar," she says. "It was almost a kind of training for me to do what I'm doing now."
Such a busy schedule does have its downside, Smolyansky concedes. "There's less freedom, less personal time, and certainly being a single female in this kind of business makes dating a little bit difficult," she explains. "Those are probably the most difficult parts."
To Smolyansky, the opportunity is worth all the challenges. "I'm just an ordinary immigrant girl," she says. "I grew up just a couple of blocks from where our offices are. I rang the Nasdaq bell in early January to celebrate 20 years of providing healthy New Year's resolution options for people. That was amazing. We got to see the Lifeway logo, and our bottles, and my signature in Times Square in lights. If I pinched myself a million times, I still wouldn't believe that this was all really happening."
Click here to see the list of 40-and-under CEOs of publicly traded U.S. companies.
