12. Segments, Products and Customers

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segments, Products and Customers

Note 12 – Segments, Products and Customers

Lifeway’s primary product is drinkable kefir, a cultured dairy product. Lifeway Kefir is tart and tangy, high in protein, calcium and vitamin D. Thanks to our exclusive blend of kefir cultures, each cup of kefir contains 12 live and active cultures and 25 to 30 billion beneficial CFU (Colony Forming Units) at the time of manufacture.

We manufacture (directly or through co-packers) and market products under the Lifeway and Fresh Made brand names, as well as under private labels on behalf of certain customers.

Our product categories are:

· Drinkable Kefir, sold in a variety of organic and non-organic sizes, flavors, and types, including low-fat, non-fat, whole milk, protein, and BioKefir (a 3.5 oz. kefir with additional probiotic cultures).

· 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.

· ProBugs, a line of kefir products designed for children.

· Other Dairy, which includes Cupped Kefir and Icelandic Skyr, a line of strained kefir and yogurt products in resealable cups.

· Frozen Kefir, available in soft serve and pint-size containers.

Lifeway has determined that it has one reportable segment based on how our chief operating decision maker manages the business and in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing our performance, has been identified collectively as the Chief Financial Officer, the Chief Operating Officer, the Chief Executive Officer, and Chairperson of the board of directors. Substantially all of our consolidated revenues relate to the sale of cultured dairy products that we produce using the same processes and materials and are sold to consumers through a common network of distributors and retailers in the United States.

Net sales of products by category were as follows for the three months ended March 31:

	2021				2020
	$		%		$		%
Drinkable Kefir other than ProBugs	$	24,203		82%	$	19,857		78%
Cheese		3,199		11%		3,260		13%
Cream and other		863		3%		781		3%
ProBugs Kefir		680		2%		860		3%
Other dairy		384		1%		371		2%
Frozen Kefir (a)		47		1%		259		1%
Net Sales	$	29,376		100%	$	25,388		100%

(a) Includes Lifeway Kefir Shop sales

Significant Customers – Sales are predominately to companies in the retail food industry located within the United States. Two major customers accounted for approximately 22% and 21% of net sales for the three months ended March 31, 2021 and 2020, respectively.