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Created For and Commissioned By: LIFEWAY FOODS
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Trusting Your Gut: Business Lessons From A Probiotics Entrepreneur

Trusting Your Gut: Business Lessons From A Probiotics Entrepreneur
Lifeway’s ProBugs Organic Whole Milk Kefir

As the CEO of Lifeway Foods, the company that has popularized the probiotic dairy product known as kefir, Julie Smolyansky knows a thing or two about attending to the gut. 

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Julie Smolyansky, CEO Lifeway Foods

Julie Smolyansky was just 27 when her father Michael died of a heart attack at 55. Michael Smolyansky had begun brewing kefir—a probiotic fermented milk drink popular in his native Russia—in his Skokie, Il., basement in 1986, back when Julie was just a girl. He and his wife Ludmila grew Lifeway Foods into a business with $12 million in annual revenues by his death in 2002. Julie, who had been working side-by-side with her father, was the heir apparent.

Suddenly, she was the youngest female CEO of a publicly traded company in the country. Her brother, Ed, just 23, became the CFO & COO.

Milling about at the funeral, a friend of her father said something shocking and disparaging: “A 27-year-old girl can’t run this company. Sell your stock.” An outraged Smolyansky took that as a challenge. “That statement for me was the thing that caused me to really fight for my company, for my family, and for our future.”

She showed him. Under Julie Smolyansky’s tenure, Lifeway Foods has revitalized its image, introduced numerous successful brand extensions, and grown to $130 million in annual revenues, with a market capitalization of $165 million. What’s more, as a pioneer and leader in the world of probiotics, Lifeway stands poised to further capitalize on a growing interest—in both medical circles and the marketplace—on the central importance of the gut, and the ways probiotics can help strengthen it. The company’s latest product, Lifeway Elixir, a line of nondairy, sparkling beverages, launched this year.

In a recent interview, Smolyansky mused on where she gets her ideas, the increasing power of women in business, and the importance of trusting—what else?—your gut.

FCW: When you took over Lifeway, what are some early changes you made that led to your startling growth?

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Julie: One was packaging. We changed from this very plain, boring, medicinal-looking package to a shrink sleeve, and that really made a big change in our sales. That was low-hanging fruit. We’re constantly changing packaging. We’re also constantly recreating ourselves and launching innovative products, like our new Elixir or Plantiful, another dairy-free plant-based probiotic using pea protein.

FCW: Where do you get ideas for new products?

JS: First and foremost, our customers. They drive the innovation. They tell us what they want or need. They inspire us and challenge us. They force us to go further, and they keep us on our toes.

Fruit Dotted Goo Berry ProBugs Pouches

The story behind ProBugs [a kefir product for kids] is my favorite. We knew we needed a children’s product—my friends would take their kefir bottle and pour it into a sippy cup—but we thought bottles were boring. We didn’t know what the delivery method should be. Then I was running the London marathon, and someone gave out a Gatorade-type energy water in a pouch. I thought this would be the perfect delivery method for kids.

This pouch had a no-spill spout, so if it fell out of your kids’ hands, it wouldn’t make a mess. We finally launched it in 2007. We were the first to do a pouch in the United States, and it was super disruptive. Twenty-five percent of all baby food is now coming out of pouches.

FCW: ProBugs has become a strong brand in its own right, with product extensions into frozen kefir products and chewable probiotic supplements. How do you decide to extend a concept?

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JS: In some cases, we just know that we need to bring something into the marketplace, whether it be a conversation, a new ingredient, or a new health benefit based on emerging science.

We were the first company to write “probiotics” on the package. People would call us and say, “Oh, I want the kefir that’s not probiotic.” We had to educate consumers.

Lifeway’s New Ginger Elixir

We’re still learning about the benefits. We always knew it was good for your gut and digestion. But now we’re learning there’s a second brain in our gut, and that second brain communicates with our first brain, impacting mental health. This is one of the most exciting things happening in food and science in my opinion.

Food can heal the body. What we have known intuitively for centuries is now being backed up by science. Realizing that we can all be empowered to manipulate our mental health, our moods, anxiety, depression and stress on top of general good health by lifestyle choices and specifically using kefir is incredibly exciting to us.

FCW: You make products that benefit the gut, but you’ve also spoken about the importance of “trusting your gut” in making business decisions.

JS: I believe the universe has your back, and whatever “mistake” you’re making, there’s a lesson to be learned out of it. There are no mistakes, really. Once you start there, it’s easy to take risks. The universe continues to send you messages until you’re ready to hear them. When your gut is telling you to do something, that’s your destiny. It’s a higher level of thinking.

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With ProBugs, initially it was a huge failure: Not the pouch, but the way we put four pouches together in a pack. The dairy manager would put them on the shelf, and they’d all fall over. So we went back to the drawing board, fixed it, and relaunched it. I just believed this was the right thing. I knew it. I have hundreds of cases like that, from hiring decisions to even agreeing to take certain meetings or attending certain conferences. Sometimes I don’t want to get on a plane and attend another event or conference. But my gut tells me to go and be open to what comes, and every time, the most game-changing learnings, connections, and growth occur.

The way I see it, the role of a CEO is to be courageous. Whether that’s related to making bold packaging changes or integrating socially conscious messaging into our marketing. The evolving role of executives includes helping to shape company culture in ways that are not traditionally thought of as brand-related.

Furthermore, we have a crisis in leadership in our world at the moment. We have communities across the country and around the world facing many challenges, incredible anxiety, scarcity of resources, and we lack diversity in role models. Now more than ever, it’s on all of us to lead in our communities, to be a source of stability, to show compassion and empathy. The next generation is counting on us.

FCW: In recent years, you made a big personal decision: to use your platform as a successful CEO to speak out about life after surviving sexual assault.

JS: I spent a lot of time analyzing if I should be out with it or keep it to myself. It felt incredibly risky, but I felt an obligation to share my story. If I could be a mirror for someone else, or if it helps one person find a path forward, it will all be worth it. Is it easy? No. I have clawed my way to a life and worked really, really hard.

There is a way to restore wholeness. I am certain that the advocacy work I’ve done over the years and specifically with “The Hunting Ground” have paved the path for the unprecedented disclosures we have seen in the last few weeks. It’s a watershed moment.

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The next generations will not stand for silence or tolerate a culture of abuse. The statistics of sexual harassment and abuse in our society are so high that at any company, your coworkers, friends, and family have experienced it. All women have and even many men have. And as women, we’re such survivors and warriors. We’re finally standing in our own truth.

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This article was created with and commissioned by Lifeway Foods.