8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 7, 2005

LIFEWAY FOODS, INC.

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(Exact name of registrant as specified in its charter)

ILLINOIS -----------------------------------------	0-17363 ----------------------------------	36-3442829 ----------------------------
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

6431 West Oakton St. Morton Grove, IL 60053

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(Address of principal executive offices)(Zip code)

Registrant's telephone number, including area code: (847) 967-1010

N/A

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(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

On October 3, 2005, Lifeway Foods, Inc., an Illinois corporation (the "Company") issued a press release. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

Exhibit No. Description of Exhibit

Exhibit 99.1         Press release dated October 3, 2005 – “Lifeway Foods Reports Record Third Quarter and Nine Months Sales Results”

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 7, 2005

LIFEWAY FOODS, INC.

By: /s/ Julie Smolyansky

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Julie Smolyansky

Chief Executive Officer, President,

and Director

EX-99.1

EXHIBIT 99.1

Lifeway Foods Reports Record Third Quarter and Nine Months Sales Results

Monday, October 3, 4:33 pm ET

• Sales for 3rd Quarter 2005 Rose 26%

• Full 3rd Quarter results and Earnings scheduled for November 14, 2005

• Test marketed Kefir in a healthcare facility for first time.

Morton Grove, IL—October 3, 2005—Lifeway Foods Inc., (Nasdaq: LWAY), makers of a nutritious, milk-based cultured beverage called kefir, announced today for the third quarter ended September 30, 2005, Lifeway Foods sales increased 26% to $5,194,968 from $4,138,606 during the same period a year ago. For the nine months period ended September 30, 2005, sales rose 23% to $14,924,395, compared to $12,075,778 for the same period in 2004.

Julie Smolyansky, Lifeway's CEO, commented, "During the third quarter we were able to achieve new milestones and new distribution opportunities for our products that in previous years were not available. We have started to test market our kefir in club-store channels, restaurant food service, and most recently, an opportunity to offer kefir to an in-patient hospital healthcare setting based on the probiotic benefit that Lifeway Kefir may offer to populations undergoing antibiotic treatment. While most of these opportunities are limited, it offers Lifeway the chance to service new channels while advancing our shelf space and increased purchase orders in traditional grocer stores and natural food stores nationwide.”

In addition, CFO Edward Smolyansky commented, “We are very comfortable about the future growth of the company. In the coming months, we have a wide variety of new and exciting products that we will bring to market, and this, along with the continuing acceptance of our Kefir drinks, should help fuel our growth.” Smolyansky added “Our new warehousing facility is allowing us to purchase our raw materials in greater quantities, thereby reducing our overall cost of goods sold.”

About Lifeway Foods, Inc.

Lifeway, named as Forbes' 38th best small business and Fortune Small Business' 47th Fastest Growing Small Business, is America's leading supplier of the cultured dairy product known as kefir. Kefir is a dairy beverage that contains ten types of "friendly," active probiotic cultures. While most regular yogurt only contains two or three of these cultures, Lifeway kefir products offer more nutritional benefits. Lifeway offers 12 different flavors of its Kefir beverage, Organic Kefir and SoyTreat (a soy based kefir). Lifeway also produces a line of products marketed in US Hispanic communities, called La Fruta Drinkable Yogurt (yogurt drinks distinct from kefir). In addition to its line of Kefir products, the company produces a variety of cheese products and recently introduced a line of organic pudding called It's Pudding!.

For more information, contact Lifeway Foods, Inc. at (847) 967-1010 or e-mail at info@lifeway.net and visit http://www.lifeway.net .

This news release contains forward-looking statements. Investors are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, competitive pressures and other important factors detailed in the Company's reports filed with the Securities and Exchange Commission.