Father’s influence endures for ethnic-foods company’s CEO

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Lifeway Foods President and CEO Julie Smolyansky holds a photo of her father, Michael Smolyansky, while in her office June 6 in Niles. | Buzz Orr~Sun-Times Media

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When she sits at the large, mirror-top, white desk in the CEO’s office at Lifeway Foods, Julie Smolyansky is never far from a photograph of her father, Michael.

A large color portrait of him sits on the desk within easy reach.

On one wall is an old black-and-white photo of her father, much younger, with long sideburns, holding the just-born Julie at a hospital in Kiev, Ukraine, then part of the Soviet Union. Another wall holds a photo of the grown Julie smiling, looking at the camera from over her father’s shoulder.

For Smolyansky the month of June and Father’s Day in particular are bittersweet this year.

Her father died 10 years ago this month. That is also when Smolyansky, then just 27, unexpectedly took over and president and CEO of her father’s company.

“I anticipated it to be when I was in my 40s,” she said. “I thought my father would follow a typical career path where he would retire in his 60s, and my brother and I would take over.

“He turned 55 and then he died a month later. It was tragic.”

At the same time, this June is also a landmark for the company as it reached $2 million a week in sales of its Kefir and other fermented milk products.

Michael and Ludmila Smolyansky brought their 1-year-old daughter, Julie, to the United States in 1976, one of 48 families allowed to leave the former Soviet Union and resettle in Chicago following the Helsinki Accords.

“We came to this country in ’76 with $100 to our name,” she said. “We were one of 48 families to arrive. There were no resources. There were no Russians to translate. They were really like dropped in the middle of a city with no help or support.”

But she said her parents embraced their new country and saw it as a place of unlimited opportunity.

Her father, an engineer in Kiev, initially took a job as a draftsman, eventually working his way back to engineering.

Her mother, no less hard-working, opened a Russian deli in Rogers Park, where the family had settled. She eventually owned five delis in Chicago.

Smolyansky said her father suffered from Crohn’s disease and could no longer find the cultured milk product, Kefir, that he drank in Kiev. Somewhat like yoghurt, Kefir is packed with probiotics that aid with digestive problems.

A common product there, it was not available in the United States. He decided he could manufacture it and meet the needs of a growing Russian population in the area.

He opened Lifeway Foods in Skokie in 1986. The company went public two years later.

The company now has offices and warehouse facilities in Niles and a plant in Morton Grove.

“He was an early pioneer in the natural-food market,” Smolyansky said. “He knew there were foods that had medicinal properties.”

Growing up in Skokie — Smolyansky graduated from Niles North High School — Smolyansky said her relationship with her father was typical for a teenager.

“We had a conflicted relationship growing up, as most teenagers do,” she said. “I gained a lot of respect for him as I grew up.”

Part of the problem, she said, was that between the stores and the new company both of her parents spent much of their time working. She and her brother, Edward, were left on their own much of the time.

“He spent all of his time working. There were weeks I didn’t see him,” she said.

Looking back now she can understand why they were so busy, but says that at the time “it was tough. They were busy establishing themselves in America. It was a really, really tough life for them.”

Smolyansky enrolled in graduate school with the goal of becoming a clinical psychologist. At the same time her dad gave her a part-time job at Lifeway.

Smolyansky worked at computer data entry. But she would listen to her father’s conversations with customers and others, and was drawn into the business.

“Within two weeks of working with my dad I fell in love with the company,” she said.

Whether he realized it at the time Michael Smolyansky began preparing his daughter to take over the company. She said he took her to meetings; let her make presentations to the board of directors and at annual shareholders meetings.

“He tried to teach me as much as he could as fast as he could,” Smolyansky said.

In 1998 when Danon bought 20 percent of Lifeway, Smolyansky accompanied her father to all of the negotiations.

“He believed in me and my brother,” she said.

Like Smolyansky her brother, Edward, was working for the company when their father died of a heart attack.

“He had a finance position in the company. Six months later he’s the director of finance and later the CFO,” she said.

When her father died, Smolyansky said, there was no question about keeping the company running.

“My brother and my mother and I said we were going to continue,” she said. “The company was financially sound. We had a good team.”

Financially, though, the company did suffer temporarily.

Smolyansky said friends of her father who had invested in the company dumped their stock the day after they learned of his death.

In fact, she said, she heard them talk about it at the funeral.

“Practically every one of my dad’s friends turned on me,” she said. “They sold all their stock the morning after they heard that he died. The stock crashed.”

In a way she understands, though she had been working there for five years at that point and was familiar with the operation.

“It may not have been personal. When it comes to money, they didn’t think a 27-year-old female could do it,” she said. “At the same time, those having said that gave me a really good reason to prove them wrong.”

The worst had already happened, Smolyansky added.

“I knew we’d be successful. Nothing worse could happen that had already happened,” she said. “I went to work for my escape. It was a great escape from my feelings of mourning.

“I just put my head down and spent 18 to 22 hours a day getting my head around everything I needed to know.”

As a kid Smolyansky said she gave little attention to Kefir. It was something that was always there.

“Growing up I kind of waved my hand at it; it’s a little Russian product we have at home,” she said.

At the same time, though, she said she had always tried to eat healthy food and the Kefir fit in with that lifestyle.

“I was always interested in nutrition,” she said. “I was always a healthy eater.”

Her father had initially marketed the Kefir primarily to health-oriented stores like Whole Foods and ethnic stores that carried European foods.

Smolyansky set out to make it more mainstream, helped along by a growth in natural and healthy foods.

“He wasn’t really doing a lot of marketing to Americans,” she said. “At the time the natural-foods movement was just starting.”

In the 10 years Smolyansky has run Lifeway Foods the company it has grown with national distribution, boasting products in mainstream stores like Target and Jewel. She also has purchased other smaller, regional companies to expand its reach.

Even during the recession Lifeway has continued to grow.

“We could have easily gotten scared and started cutting costs,” Smolyansky said.

But instead she thought about her father and his belief in America.

“The sky is not falling. This is America. People have to eat,” she said.

Failure, Smolyansky said, was never an option for her or the company.

“I said that to myself over and over,” she said. “It was like my father and his values. He held values of the opportunities that are available in America that are not readily available in other parts of the world.

“That here, if you have the will and desire to succeed, there’s every opportunity at your disposal if you want to use it my father believed that.

“He constantly put it into my head that anything is possible. He said, ‘You can do anything but run for president.’ ”