As part of its ‘Lifeway 2.0’ strategy, the company has also ditched slow sellers, discontined its Elixir soda line and kefir bites, revamped its packaging, and introduced smaller pack sizes, which have been a big hit, says Smolyansky, who is launching new 3.5oz 'kefir minis' and kids beverages in pouches under the Plantiful line.
While it is waiting until there is more clarity from the FDA about the regulatory path forward for CBD before hitting the launch button, Lifeway is developing a probiotic-infused plant-based beverage (Plantiful + CBD) in a biodegradable 3.5oz bottle.
FNU: Why is Lifeway entering the CBD market?
JS: I’m really excited to be one of the first early bigger food companies to really push forward this conversation. Lifeway has always been known for its pioneering work on innovation and leading conversations that have not necessarily hit the mass market yet.
We created the kefir category here in the US and we’ve built grass roots support around ingredients and concepts that the mass market doesn’t understand yet, so it felt like a very natural pathway for Lifeway to get into CBD, which shows incredible promise around anxiety, pain, inflammation, and mental health issues such as PTSD…
We’re seeing that the marketplace is interested and wanting this kind of functional product: Plantiful +CBD – it’s derived from a plant, so adding it to the Plantiful line makes perfect sense, it feels like a very natural place for Lifeway to go.
FNU: Are you concerned about the regulatory landscape around CBD?
JS: We’re watching the FDA and helping to drive that conversation on the federal level, as I believe this is also a human rights issue. We can reduce the use of opioids and reduce suffering, so it’s our responsibility as leaders in the food industry to have the conversation and make CBD products widely available and accessible to people.
We’re waiting [for regulatory clarity before launching] but it’s coming, you can’t ignore it. There is so much demand for this that they can’t ignore it. (Read Lifeway’s submission to the FDA.)
FNU: What dosage are you planning to put in your product and why?
JS: There will be different products and dosages and needs, so products will be customized. There’s a whole industry now around psychiatric nutrition. Food is medicine. If you’re a veteran suffering from intense PTSD your needs might be different from someone dealing with day to day anxiety. We want to offer options for people for a self care routine so they can find products that work for them, but we’ve not pinned down the exact dosage yet. I can say it will be from organic, sustainable source, however.
FNU: Why have sales of kefir dropped?
JS: Big picture, there is really big demand for dairy alternatives and we’ve had to take time to really understand the changes in the marketplace and how consumers are resolving their nutritional needs, so we launched Plantiful in March [combining organic pea protein and live and active cultures] and we’ve seen tremendous success. Americans are looking for more plant-based proteins, and our consumers are also looking for probiotics, so we’ve combined both.
We changed some of our labels and that also really contributed to a reinvigoration of our entire line. We also announced our Lifeway 2.0 strategy at the end of 2018 and the results of our strategy are starting to show now in the numbers.
A lot of the changes we made are starting to show in the bottom line and we’re only going to see more of that.
FNU: Where do you see growth opportunities for Lifeway Foods?
JS: The Plantiful line is growing over 32% year-on-year and sales of plant-based yogurt drinks are also up dramatically.
We recently unlocked distribution in healthy vending machines in the east coast for 6am for Lifeway kefir and Plantiful, and we’ve also done a test run with Rite Aid, which is a completely new channel for us.
While we’re seeing our 32oz line face challenges, we’re seeing a big increase in demand for our 8oz sizes, and we’re also seeing that consumers want premium whole milk products, and our whole milk with real fruit puree products are doing phenomenally well. Consumers are not afraid to have fat anymore.