Liquid gold - Lifeway Foods' kefir product

Nation's Business, July, 1989 by Michael Barrier

Liquid Gold Late last year, Mike Smolyansky was walking through the new plant in Skokie, Ill., just north of Chicago, where his dairy-products company, Lifeway Foods, would start production in a few weeks. The building was twice as large as Lifeway's old plant, and Lifeway was moving in with no debt except the mortgage on the building itself. But Smolyansky had one regret.

"I came to this country too late," he said. "I came 12 years ago. If I'd come 20 years ago, I'd probably have five plants like this."

It is, however, remarkable that Smolyansky, 42, got here at all. He is a Russian-born Jew; he and his wife and infant daughter were allowed to emigrate during a thaw in U.S.-Soviet relations in the mid-1970s. Now, through Lifeway Foods, he is bringing a bit of Russia to the U.S.

Lifeway's principal product is kefir, a thick, slightly effervescent, milk-based drink that resembles a liquid yogurt. Like yogurt, Lifeway's kefir comes in plain and fruit flavors; it sells at retail for around $2 a quart. Still little known here, kefir is common in eastern Europe and the Middle East.

Smokyansky founded Lifeway in February 1986 and took it public two years later. With the October 1987 stock-market drop still fresh in investors' memories, the offering brought in little more than the $600,000 that Smolyansky had set as a minimum.

That turned out to be enough, however. Trained as a chemical engineer in the Soviet Union, Smolyansky worked in a Chicago machine shop before going into business for himself. In equipping his new plant, he says, "I became the general contractor. On everything, we saved money."

Its limited capacity at the old plant held Lifeway's sales last year to less than $800,000, but Smolyansky says that sales this year will be more than double that, with a profit of around 20 percent of sales.

The big question remaining is whether Lifeway can convert the American public as a whole to a drink that is still an ethnic specialty.

Smolyansky is glad simply to have the chance to try.

"I speak with an accent," he says. "I probably will never get rid of it. But still, if I were to go to France, I would always be considered a foreigner, no matter how well I spoke French. In this country, pwople will say, okay, you speak with an accent, but you are an American. You have hundreds and hundreds of different nationalities. Whoever loves to work and uses their brains, you not only can make money, you can really show what you're capable of."