Nearly a year after the loss of its founder, Lifeway Foods continues to grow

Last November Julie Smolyansky, went to Pack Expo in Chicago looking for shrink sleeve equipment, and she found something more. Her company, Lifeway Foods Inc., Morton Grove, Ill., eventually purchased a system to add full-body shrink sleeve labels to its line of Kefir probiotic dairy and soy drinks.

In the process, Smolyansky quieted some doubts she had about fostering the company her father built. See, last June she became CEO and president of Lifeway, and her brother Edward became its financial director, when their father died of a heart attack. There was no warning.

"It's been so intense since he passed away," Julie says. "I don't know if I'll ever get used to the idea of him not being here, running the company. But now his dream has become my dream, and I have to make sure that everything he worked for was not in vain."

With these thoughts in mind, Smolyansky went right to work upon her father's passing. Soon she and her brother were faced with a major decision.

"Eddie and I talked about it, and we knew we needed to create packaging that would appeal to our customers and attract new customers," she says. "So we went to Pack Expo, and I had never been to that particular show with my father, so when we first walked in Eddie and I had tears in our eyes and I was thinking how it would have been nice if he were walking the floor with us. Then we got down to business."

An exhibitor at the show had the kind of system they needed, and a few weeks later they placed the order.

"It was the biggest purchase we've made and I was kind of nervous. But we signed the contract right around New Year's Eve so we celebrated with Champagne."

The full-sleeve bottles should begin to reach the shelves next month.

Unique product

In going from pressure-sensitive to full-body labels, Lifeway will have more label real estate on which to tell the story of the company and its product.

Kefir is a unique food of Turkish ancestry that's distinct from drinkable yogurt in that it contains yeast as well as probiotic Saccharomyces kefir, and Torula kefir bacteria.

Michael Smolyansky and his young family were among the few pre-Glasnost Soviet immigrants to the U.S. in the mid-70s. They settled in Chicago in 1976, and Michael, an engineer in Russia, took a draftsman's position while his wife opened a Russian deli. Scouting for products at a Germany food show, they were reintroduced to kefir, which is popular throughout Eastern Europe, and Michael began thinking about producing kefir in the United States.

"He thought it would be great to add flavors for the American pallet," Julie Smolyansky says. Lifeway was founded in 1986, and grew quickly as Chicago-area consumers embraced the kefir products and European-style cheeses. Always looking to grow the company, Michael Smolyansky was intrigued when friends and colleagues suggested going public.

"Coming from the Soviet Union, and not having a business background, I'm not sure if he had any idea what they meant," Julie says. "He went down to the library and found out that he could print these pieces of paper and sell shares in the company."

The initial public offering in 1988 raised somewhere in the neighborhood of $800,000, Julie says. Last year the company's net income rose 39% on sales of about $12 million. Her father's naivet¿ay have helped him, Julie says, noting that he might not have made some of his business moves had he fully appreciated the risks.

Lifeway's current president set aside her education in clinical psychology several years ago to work with her father. She now believes that by continuing to innovate she can keep his company growing and keep his memory alive. Buying the new sleever was a good example, she says.

"If there is such a thing as an afterlife, our dad is in shock," she says. "He wouldn't believe that his kids could have done this without him."