Lifeway Foods, Inc.

Lifeway was founded in 1986 by Michael Smolyansky, ten years after he and his family emigrated from Eastern Europe to the United States. Lifeway was the first to successfully introduce kefir to the U.S. consumer on a commercial scale, initially catering to ethnic consumers in the Chicago, Illinois metropolitan area. Lifeway has grown to become the largest producer and marketer of kefir in the U.S. and an important player in the broader market spaces of probiotic-based products and natural, better for you foods. Unless otherwise noted herein, all amounts in this Form 10-K are in thousands, except per share numbers. PRODUCTS Our primary product is drinkable kefir, a cultured dairy product. Lifeway kefir is tart and tangy, high in protein, calcium and vitamin D. We manufacture (directly or through co-packers) and market products under the Lifeway, Fresh Made and GlenOaks Farms brand names, as well as under private labels on behalf of certain customers. Our product categories are: Drinkable kefir, a cultured dairy product sold in a variety of organic and non-organic sizes, flavors, and milk types; European-style soft cheeses, including farmer cheese, white cheese, and Sweet Kiss; Cream and other, which consists primarily of cream, a byproduct of making our kefir; Drinkable yogurt, sold in a variety of sizes and flavors; ProBugs, a line of kefir products designed for children; Other dairy, which consists primarily of Fresh Made butter and sour cream.