Lifeway Foods posted 24% sales growth for the first quarter as total sales increased from $11.1 million for the period ending March 31, 2008, to $13.7 million for the same period in 2009. Fresh Made Dairy contributed slightly less than $1.4 million in sales since being acquired on February 9 and is on track to exceed 2008 sales, according to a company release. Lifeway’s existing product lines grew 11% for the quarter.

Julie Smolyansky, chief executive officer of Lifeway Foods, recently told NBJ that the company was able to bounce back well from a particularly difficult fourth quarter in 2008. “In my years of working in this company–my father started the business when I was 9 years old–I’ve never seen a quarter like that. That’s not just us, it’s the whole world. Considering that, I’m very pleased with the business. We had a bounce back pretty much immediately in January.”

Edward Smolyansky, chief financial officer, talked about the company’s improved performance in a prepared statement. “We are extremely pleased with our first quarter 2009 revenue results. Given these tough economic times, the strong growth we experienced in the first quarter is a direct result of the marketing and educational initiatives we have invested in during the second half of 2008, and will serve as a strong foundation for future growth.”

Lifeway has also benefited from being in a product category that is on the rise. Natural & organic dairy sales in the U.S. increased 11% to $4.2 billion in 2008, according to NBJ estimates. Organic yogurt and kefir sales increased 9% to $937 million. Julie Smolyanksky thinks that the food industry has been able to bounce back from the recession more quickly than many others, due in part to more consumers shopping for groceries and preparing their meals as opposed to eating out. “I think food is somewhat recession proof. So maybe the recession isn’t over, maybe it’s just because we’re in a great industry. If there was any effect, I think it’s probably over for our company at least.” Lifeway Foods reported total sales of $44.5 million in 2008.

NBJ’s Healthy Kids issue will feature additional coverage of Lifeway Foods’ Pro Bugs children’s beverage, as well as complete analysis of the U.S. kids’ supplement, personal care and food markets in 2008. To order a copy of the issue, subscribe to NBJ or download a free 32-page sample issue, please click here.

Related Links:

Lifeway Foods Drinks Up Probiotic Kefir Competitor Fresh Made Dairy

Lifeway Foods Produces Probiotic Profits

Dean Foods Reports Strong 2008 Sales, Despite Q4 Softening

The economic downturn is touching every company in the nutrition industry, but the smaller entrepreneurial companies potentially stand to lose the most should the recession deepen or linger because their access to capital and credit will only grow tighter. So how is a CEO expected to protect and even continue growing her company in the midst of this recession? For Gigi Lee Chang, founder and president of organic frozen baby food maker Plum Organics, the answer was to join forces with Nest Collective, an Emeryville, California-based firm dedicated to amassing a suite of healthy, organic and nutritional consumer products brands. Along with Plum, Nest also owns a growing line of organic lunchbox snacks and kids meals under the Revolution Foods brand.

“It made sense for us to come together because I felt Nest would safeguard the mission of Plum and help me take it to the next level,” said Lee Chang, who sold her company to Nest at the end of 2008. She said Plum’s next goal is to develop a suite of shelf-stable toddler foods that will become the organic equivalent of the popular Gerber Graduates line. “Parents who would normally buy only organic for their children use Gerber Graduates because there is no organic option. We want to be that option.”

Jed Smith, founder and managing director of Catamount Ventures, which is Nest’s primary financial backer, said partnering with other fast-growing, mission-minded businesses is one viable way for small- to medium-sized companies in the nutrition industry to continue expanding in the current environment, while protecting their brands and company ideals. “As access to capital dries up and as these smaller companies start to get to scale and need more resources, they will need to find other ways to compete,” Smith told Nutrition Business Journal in recent interview. “Nest is providing a real alternative for entrepreneurs so that they don’t necessarily have to sell to a big private equity firm or a big consumer products company, but rather can be part of something that is pure and authentic.”

NBJ’s April issue focuses on the children’s nutrition market and includes an in-depth profile of Nest Collective. To order a copy of the issue, subscribe to NBJ or download a free 32-page sample issue of the journal, go to www.nutritionbusinessjournal.com.

Related links:

The Nest Gobbles Up Frozen Baby Foods Maker, Plum Organics

Health Concerns Drive Growth Spurt for Organic Baby Food

The U.S. Department of Agriculture (USDA) has its hackles up over mounting criticisms of its school lunch, food stamp and other public nutrition programs, which critics argue are feeding America’s growing obesity crisis. The agency—whose food nutrition programs will cost taxpayers about $73 billion and affect an estimated 61 million Americans during the 2009 fiscal year—said no definitive proof exists linking its programs to increased obesity.

“USDA is not aware of any convincing evidence that school meals or other federal nutrition programs cause obesity and overweight. The evidence that does exist is mixed,” Thomas O’Connor, USDA’s acting deputy undersecretary for nutrition, told a House Appropriations subcommittee on March 12.

As the parent of school-age children, I know that all one has to do is check out the menu of a typical public school lunch program to see that the food the USDA is feeding our nation’s children is not nearly as nutritious as it could or should be. That’s why I’m particularly interested in seeing changes occur within the USDA’s school lunch program, which continues to serve high-fat and high-sodium food to school kids every day. Fortunately, President Obama has proposed adding $1 billion a year in funding for child nutrition programs, with a portion of this money going toward improving the nutritional quality of school meals.

Here in Boulder, where Nutrition Business Journal is based, we are lucky to have Ann Cooper—a.k.a. the Renegade Lunch Lady and author of Lunch Lessons: Changing the Way we Feed Our Children—taking over the public school system’s lunch program. We’re hoping she’s able to do here what she achieved in Berkeley, California, where Cooper eliminated all trans fats and frozen foods from the city’s school lunch program and introduced healthful new menus that emphasize whole grains, low-fat protein and lots of fresh fruits and vegetables.

Cooper discussed the issue of children’s nutrition and the work she is doing to clean up school lunch programs across the country during a packed education session at Natural Products Expo West on March 5. She is also one of the experts who will help shed light on this issue for NBJ’s upcoming Healthy Kids issue, which will publish in April.

You can order the issue, subscribe to NBJ or download a free 32-page sample issue of the journal via the NBJ Website.

Related links:

Much Work Remains in U.S. Diabesity War, Author Says

Healthy Beverage Mandates For Schools Fuels Business For Switch Beverage Co.

Organic agriculture is growing around the globe, thanks to government backing and increased consumer demand. That was the finding from a new study by the International Federation of Organic Agriculture Movements (IFOAM) and the Research Institute of Organic Agriculture (FiBL). Although the amount of land dedicated to organic agriculture has increased in the United States, it hasn’t grown as quickly as U.S. consumer demand, Mark Lipson, senior policy analyst for the Organic Farming Research Foundation (OFRF) told Nutrition Business Journal on February 20.

“A lot of the increase globally has been driven by government goals and support,” Lipson said. “In the United States, that has not been the case. The [2008] Farm Bill has started to change that, but we are still not at the point where the government is saying, ‘More organic agriculture is a good thing for America.’”

Winner of NBJ’s 2008 Organic Excellence Award, Lipson has been recognized by us and others for his tireless efforts to get important organic research funding into the 2008 Farm Bill, which is being touted as an important first step toward bringing U.S. organic farmers their fair share of government money.

Even though the bill has been signed into law, Lipson said the organic community must still do everything it can to “hold on to its Farm Bill money.” As he explained, $78 million in the bill was earmarked for organic agriculture research and education. However, should the agriculture department start running short on money for food stamps or other nutritional support programs—which is increasingly likely given the growing numbers of people losing their jobs and ability to pay for food—Uncle Sam could potentially use dedicated research money to shore up the deficit. “Fortunately, the stimulus bill addressed some of those concerns—but only for the current fiscal year.”

Part of the OFRF’s and the organic industry’s plan for defending against losing its hard-won research funding is to continue educating legislators about the public benefits of organic agriculture. But, as Lipson explained, the flagging economy is making even this more difficult. “The economy does just dominate all of the policy discussions, so any given goal or objective has to be framed in terms of what it will do for jobs and trade,” he said. “That is pushing other considerations like health and the environment to the side.”

While the economy is certainly posing many challenges for organic producers, Lipson said he is hopeful about what the next few years could mean for organic agriculture—particularly from a policy perspective. “For the last decade, the government has basically been very cautious not to say organic is better but rather that it is just a marketing choice or a lifestyle choice,” he said. “But I think the new administration will be more open to saying, ‘Organic is good for the environment and the economy, and there are good reasons for us to support growing the organic footprint in American agriculture.’”

NBJ’s March issue will be dedicated to the organic food and beverage industry, and will feature insights from leading organic “insiders,” such as Lipson. To order your copy of the issue, subscribe to NBJ or download a free sample issue of the journal, go to www.nutritionbusinessjournal.com.

How will the supplement industry manage an economic downturn? Industry historians will tell you that in the last few recessions, the supplement industry handled slower consumer spending quite well. But is recent economic history a good comparable for how the current supplement industry will handle the foreseeable future? Is it the same supplement industry that it was before?

This critical question is exactly what the 2008 Supplement Business Report addresses with over 400 charts of data and 160 large and small supplement company profiles. Forecasts through 2017 are also included based on most recently available research, so you can chart your company’s growth against our experienced expectations for the industry.

Certainly, 2008 has been a good year for the U.S. supplement industry. Both IRI and SPINS data show solid growth in multivitamins, but a resurgence in herbs and vitamin D sales may drive growth for the overall supplement industry higher than achieved in 2007 (5.9% to $23.7 billion in consumer sales).

But how long will this last? Will private label grow its marketshare in ways we’re seeing it do in organic food? What about consumer pricing? Will prices decline as expected? And what about suppliers, how will they manage through rising ingredient costs, transportation costs and bad debt from customers?

Walking the show floor at Expo East and Supply Side West, one thing was clear. There is confidence that the primary demographic and self-care drivers of the nutrition and supplement industry position it better than most to weather a recession. However, when I asked executives, “Is your business feeling any impact from the economic downturn?” the quick answer was, “No.” But when I probed further and asked about bad debt, late payments and a slowdown in product development - they all confirmed one or all.

So is there a bit of schizophrenia in the U.S. nutrition industry? I feel there is. And if there wasn’t, I would be more concerned. One thing is certain, staying on top of industry trends is what Nutrition Business Journal has made its only business since 1996 and will continue to make its primary business through to the other side of this recession. So if you have any questions about what’s going on in any product segment or sales channel in the nutrition industry, don’t hesitate to call. 303.998.9229 If I don’t have the answer, I’ll find someone that does for you.

All the best,

Patrick Rea

Editorial Director

Nutrition Business Journal