LIFEWAY FOODS (LWAY) Message Board

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Non-Tech : LIFEWAY FOODS (LWAY)

LWAY 22.91

-3.0%

2:02 PM EST

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To: mark cox who wrote (300)	1/18/1999 1:21:00 AM
From: mark cox	Read Replies (1) of 352

I spoke with the CEO. ... He was pleasantly surprised and excited by the online sales of their kefir starter culture. They are just learning how to utilize the internet for selling products. He expects to develop about 10 new products to sell on the internet. His daughter is mostly responsible for what LWAY is doing online. She is the director of marketing for the company. She has a degree in the psychology of consumer behavior. I like that. ... In the 4th quarter they installed more equipment in the new production facility. They are now finished with buying new equipment for a while. All of the equipment that they bought and installed last year is completely paid for. They added no additional debt. During 1998 they put the cash generated from operations back into the plant. That is going to change this year. Now they are going to direct those cash flows towards marketing. He said that up until this point, LWAY has 'never' really marketed their products heavily. But it's quote, " time to move to a different level." ... They have signed an agreement with a company that will allow their kefir to be 'placed' in about 30 movies and shows. This is called 'placement'. Next week they will finalize their 'integrated marketing plan'. They have placed some full page color ads in some senior citizen papers in St. Louis. They are presently negotiating with a national health magazine that has a circulation of 315,000. Over the next 1 1/2 to 2 years they plan to cover the entire country with continuous advertising by advertising in up to 60 different magazines 6 times per year in each on an alternating basis. ... This week they will start selling 4 different products in the 8oz. single serving size. They are going to be selling these in convience stores like 7-11 etc., coffee shops and health clubs. He said this was a brand new opportunity for LWAY. ... The collaborations with other companies to produce new products are still underway. He wouldn't tell us anything about them. There will be some new products launched in the next few months. I like the fact that they will be expanding their presence on the internet and adding new products to it. That as of yet they have never really done any heavy advertising and yet they have shown high growth over the years. With heavy advertising to come and online stores selling their products this should have a very positive effect. This integrated marketing plan is what I am most excited about. I know their kefir is healthy and delicious and I feel that when the word gets out in this advertising over the next couple of years, kefir is going to catch on. The functional food market is just beginning and so are probiotics. LWAY is positioned to take advantage of both. The single serving products open a whole new door to their products. I think a lot more people will be willing to try kefir for the first time by only having to pay for 8oz. instead of paying $3.00 for a quart. If they like the product then maybe they will be more likely to pick up a quart the next time they see it in a supermarket. Mark

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