ISS recommends shareholders reject dissident campaign at Lifeway Foods

MORTON GROVE, Ill. - Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, has recommended that shareholders "do not vote" on proposals put forward by Ludmila and Edward Smolyansky in their consent solicitation campaign against Lifeway Foods, Inc. (NASDAQ:LWAY), a company currently valued at $391 million with a "GREAT" financial health score according to InvestingPro analysis.

In its report, ISS concluded that "the dissident has not presented a compelling case for change" regarding the kefir and fermented probiotic products supplier, according to a company press release issued Tuesday.

The proxy advisory firm’s analysis highlighted Lifeway’s "directionally positive" financial performance and noted that its share price has "rallied over the preceding year on multiple positive earnings announcements," with total shareholder returns outperforming peers in the Russell 3000 Food Producers Index.

ISS also stated that the dissident group’s critiques "are generally presented without adequate context" and that they "have not presented a plan should it successfully secure a majority of board seats" for governance or operational improvement.

Julie Smolyansky, CEO and Chair of Lifeway Foods, said, "We appreciate ISS’s thorough review and are pleased that their recommendation supports our belief that this consent solicitation is unwarranted, disruptive and not in the best interest of Lifeway shareholders."

The company’s board and management team stated they remain focused on maximizing shareholder value and encouraged shareholders to follow ISS’s guidance by taking no action on the consent solicitation.

Lifeway Foods describes itself as America’s leading supplier of kefir, with products sold across the United States, Mexico, Ireland, South Africa, United Arab Emirates and France.

In other recent news, Lifeway Foods reported record weekly sales of $5.5 million for the week ending July 13, 2025, marking a 66% increase from the same period last year. The company also announced a 10.7% rise in net sales for the first two months of the second quarter, reaching $37.6 million, with year-to-date net sales as of May 31, 2025, totaling $83.7 million. Lifeway Foods forecasts second-quarter net sales to range between $52 million and $56 million. In addition to strong sales performance, Lifeway Foods has expanded its product distribution across major retailers nationwide.

Meanwhile, a shareholder dispute has emerged as Edward and Ludmila Smolyansky, who control about 26% of Lifeway Foods’ voting shares, are advancing a consent solicitation to remove the current board of directors. This move is linked to disagreements over the company’s direction and a potential acquisition offer from Danone at $27 per share. Lifeway Foods has responded by urging shareholders to disregard the Smolyanskys’ consent solicitation, labeling it legally deficient and in violation of Illinois law. These developments reflect ongoing tensions within the company’s leadership and strategic direction.

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