Transcript

Rapid Response: Leading with your gut, w/Lifeway Foods CEO Julie Smolyansky

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Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. My parents and I were immigrants from the former Soviet Union. We were refugees. My parents talked about surviving famine. Енсові сторі.

They were part of my DNA. When this coronavirus started to become a bigger chatter, I did start thinking about what LifeWay's role was gonna be. We reacted really quickly to get the company ready to build out that inventory, to make sure that our supply chain was strong, to create and deploy the various emergency plans. Absorbing this data and understanding what you can do with it is really important.

I hope that we really take this moment and use it as a teachable moment for generations to come because This isn't the last global pandemic. That's Julie Smoliansky. CEO of Lifeways, which makes the dairy probiotic drink. Keefer.

Brands like Lifeways have seen a boom in demand. As food consumption in the US has shifted during the pandemic. From fifty percent restaurants and food services to nearly a hundred percent groceries. But filling those orders And managing the safety needs of food facilities.

Has been anything but simple. I'm Bob Saphion. Former editor of Fast Company. Founder of the Flux Group and host of Masters of Scale Rapid Response. I wanted to talk with Julie because in her business life and her family life.

She's had plenty of experience grappling with crisis. A first generation American She both relishes the opportunities she's had. And reflects on how hard she's had to fight for them. She's an advocate for entrepreneurs.

For global health readiness. And for what she calls She rows. Women, she argues. Are particularly well suited to leading in today's challenging times.

I'm Bob Safian and I'm here with Julie Smoliansky, the CEO of Lifeways. Julie is no stranger to crisis, having taken over running the publicly held lifeways. At age twenty seven. After her father, the previous CEO, unexpectedly passed away.

The business has thrived under her stюршіp. But the crisis posed by coronavirus is very different. Uh, Julie is coming to us today remotely from her home in Chicago as I ask my questions. From my home in New York. Julie, thanks for joining us.

Thanks for uh inviting me to join you. It's great to be with you. So Julie, tell me how the Coronavirus. First came. to your attention.

I remember Waking up in January, watching the news in the morning, hearing about this coronavirus. Also having knowledge about pandemics. Uh I'd done some work with the UN in the past. So This was actually on my radar, just the possibility of an outbreak of some sort of global health crisis. And I remember

walking into my kids room and bedrooms and just saying, you know, Good morning, hey, there's this virus that's going around, just be a little bit extra cautious. Wash your hands more often. Just be conscious of that. And that was it. And then in march, our biggest natural food convention. Uh was about to kick off Expo West. The entire food industry goes down there. Every buyer, every food brand.

And Expo West got canceled and you know my team was already down there. Our booth was built out, obviously. I was surprised. I was a little dis you know, obviously disappointed, frustrated. Uh all the feelings And then I started to really Tune in. That feeling of impending doom is and crisis allowed me to make some critical decisions on behalf of the company that really put us in a stronger place. We reacted really

quickly I knew that there was gonna be a big demand for kefir and for probiotics and for immune supporting products and for food in general. You saw a rise in actual sales start first in your business in Europe. Yeah, we started to see a lot of chatter around this in Europe and around coronavirus in general and immunity were able to

take what happened there and apply it to the United States, I knew that the pattern would follow. So you stockpiled. А я за руко сем век'спродак. And then You wrote a letter to every customer.

Correct. Tell me why you wrote this letter, what the goal was, and what the response was. Mm-hmm. I'll give you a little context. My parents

And I were immigrants from the former Soviet Union. We were refugees, the first of forty eight families that were settled in the United States in nineteen seventy six through a small slit in the iron curtain. That's the context for how Kiefer came to be in the United States. Keefer is a ancient two thousand year old product that originated in the Caucus Mountains where my ancestors are from. And it survived through word of mouth. It survived through storytelling, through folklore. And there were these known immune supporting benefits. So My parents

When they came to the United States they saw that there was no kefir in the United States. And my mother specifically saw that the food in the United States was really different than the food that she was used to in her country and they overcame scarcity. You know, my parents talked about surviving um famine and my mother thought that she was gonna die of starvation in the Soviet Union and that They had breadlines, everyone sort of remembers breadlines and those iconic images of the seventies and eighties of people in the Soviet Union waiting for food. And so these stories they were part of my DNA. They are part of

everyday life the reason why my parents entered into the food industry in general was to feed people. This was an intuitive Response by my mother. Two Feed her community. That was sort of the context for.

My decision making And I remember nineteen seventy nine, the historic Chicago snowstorm. And Within hours of that snowstorm being announced All of the toilet paper was gone. milk, bread, eggs, all of those essentials were gone within hours. And I was four years old at the time. And I vividly remember that experience. Um, it was a few years before my parents would start Life Way, but

This experience, this feeling was With me For always and When this coronavirus started to become a bigger chatter, I did start thinking about what life way's role was gonna be.

I took that time as critical time to prepare to get the company ready, to build out that inventory, to make sure that our supply chain was strong, to create And deploy the various emergency plans and so in terms of this letter. I knew that it was so critically important to warn to light the fire under everyone's Tush um to make sure that people were thoughtful about their ordering. I really

Um was hoping that they were really aware of the possible Demand. I think one of the drawbacks to all the technology is that our computerized inventory systems Can't Accommodate

the human reaction of a global pandemic. And so You know, the surges that they were predicting didn't even scratch the surface when the orders did come through, or two weeks later. And they were three, four, five, six times the quantity we were able to ship them. you know, upon the order.

The surge Would not have been able to be met. without the warning that we had. So yes, I wrote this nationwide letter to all of the category buyers. Uh, just letting them know that in other countries where the virus had already taken hold the demands that that they were seeing in other countries and that they should probably expect to see the similar types of demands here in the United States. But mostly they didn't really

Listen, because of their own models, right? That's the technology that you're talking about. Yeah, they're all responding based on their inventory systems and their computer systems, but they don't write in An allogarm for panic. That's why you saw the empty shelves across the United States. What I will say is Where in the Soviet Union people would wait in line all day and when they got into the store, there would be nothing left in the shelves. In the United States, the supply chain is very strong. It might be interrupted. There might not be the full range of all of the things you might want in every variety and flavor, but overall the supply chain is very strong. And so people should continue to may remain calm to know that there is enough food.

For everyone in the United States to eat. You have facilities in Three states Wisconsin, Pennsylvania, and Illinois. Did you go to visit Any of your local workers. Most of March I was in the production facilities and the shipping and receiving facilities with my team with my workers and making sure that they knew that we were together. I you know, I was alongside with them.

In offering support, encouragement, motivation. I think everyone on our team recognizes that we're here to bring people better health and wellness and and food. It's a very humanistic response to want to feed people. Did you need New processes at the facility. Or as a food company, were the safety protocols that you had

Already enough. Yeah, it's never enough, right? You can always do more, and especially now there's more to do. We had a lot already in place. I think that's one of the great things about being in food manufacturing. The bar is so high already on sanitizing and cleaning, like we had masks, we have gloves, we have hair nets, we have lab coats. A lot of that we already had. We had to do more, we had to bring in more and change them out more often. we typically did not have to have masks then beginning of March we started to uh make that mandatory. Social distancing wasn't something that was necessary until this Um crisis.

We implemented, you know, the tape on the ground uh to social distance. We already have sanitizing systems. It was just a matter of cleaning more often than we even did already. What we did do immediately was start testing for fevers. Uh, so using the infrared thermometers. And that was really st that was actually a really stressful moment. Initially, I couldn't even get one thermometer in Chicago. I couldn't find one thermometer in the entire city of Chicago. And I needed 10. So you were personally going from store to store looking for Yes. In March I went to probably thirty grocery stores and then I went to a bunch of pharmacies and I was trying to order them online.

Oh yeah, I was personally hunting down thermometers, you know, begging people if anyone knew of a had access to a thermometer. Are there any specific encounters with the workforce with your team that Are memorable or striking to you over the recent weeks? We've shed some tears together when I you know, gave my remarks to the team.

about the changes that were happening within protocol and the safety measurements that we were putting in place. It was important for them to hear that those were coming from me at the top, that they were really important, that I really cared, that I needed them to follow it for their own benefit, that the this wasn't some lawyer out of some office asking for these things and I felt a sense of maternal caretaking of of them, of of the whole company, of the whole team and You know, I got really emotional about it and I think they did too. And I think you know, some of these people have been with my family for over thirty years. It is like family. Uh, so I care deeply about their wellness.

you know, as much as I care about my own family is You donated a bunch of food to food pantries. You mentioned that you went to Wrigley Field Which is now a food pantry to Deliver the food. Why did you go personally?

Um well, I think it's important to be on the ground and to look somebody in the eyes and deliver the food to them. I wore protective gear, I had a mask, I had my gloves, I we did social distancing, we took all of the measures Um that we possibly could, but we started this call talking about leading in crisis and I I think like leading in crisis for me is just part of my DNA and I really feel connected to those

the lineage of of women who came before me who intuitively just run into that fire to go help. And I just have such a a calling to do that personally. That it brings me great purpose. makes me feel like You know, I have existed all of this time to get to this moment to be here. I feel like I'm in a place of privilege. I've been here before, like I've led through crisis before.

And I'd I'd like to feel like I can share something With Another person with a community. Like Chicago is my hometown, and I can't imagine a better place than to be at Wrigley Field, an iconic part of our city.

This town. in the center of the of the country And normally where you'd see a line of cars waiting and traffic waiting to get to see a home game or a concert headliner that what we were seeing was lines of cars of people that are hungry, that are scared, that are food insecure. And that, you know, to be there in that moment showing solidarity, showing and giving hope.

And letting people know that they are not alone, and that we are in this together. When you build substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years.

Building. Creative planning where wealth works together. Lear more at creative planning dot com slash masters of scale. Humans will never be more intelligent than AI. Those were great at AI and those that went out of business because they weren't. How do we build a future.

That is human centered. I'm Rana El Calyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives.

Find pioneers of AI wherever you tune in. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely. From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. I wanna ask you about

Two media efforts this month. That you're a part of. First, you put together Only the second TV commercial that the company has done. And I wanted to ask you. Why?

Now Right. Well, you know, we had all of this great footage and all these great photos that that we had personally taken over the course of this crisis, um, in the production facility, in shipping and receiving. We felt that it was really important to Say thank you to all of the essential workers. We've been so moved by the bravery and the courage by essential workers by supply chain, by all these people who are showing up and keeping things moving for all of us. That was really what was driving us. you know, we want people to feel inspired. Um, so we we put it all together. It was just a lot of photos that were taken off of my my iPhone. My eleven year old daughter, she br wrote and recorded herself on the ukulele. We

you know, laid it over on top of the still photography. And I recorded a little message and I I really just mostly wanted to say thank you to the whole supply chain. And I feel like there's really not an easy way to do that. And um and I mean everyone, the truck drivers, the farmers, the all the food manufacturers, the food processors, delivery people, the grocery store workers. Um these are really underappreciated people who are doing heroic work and I think they need all of the encouragement that they can get. Some other brands have done some thank yous. One of the distinctive things about your message is you say thank you to heroes And She Ros.

Yes, we wanted to shine a light on so many women workers too that are I think not getting exactly you know the light that they deserve. And I wanted to call it out. Some people maybe don't like the term and feel like, oh why genderized it? Um and that's okay. I feel like it's really important, and I think now more than ever, there are gonna be so many women that get kind of pushed out of Um deals pushed out of networking opportunities, pushed out of the workforce, uh, and they're the most impacted, right? I just wanted to really shine a light on female workers as well. Then

A couple days after this commercial air on Mother's Day. You spend part of the time working on a public service announcement. Tell me about this. PSA and why that ended up happening on

Mother's Day. So before I came to work at my father's company at Lifeway I was a trauma and crisis counselor and I specifically worked in the space around ending violence against women. When this crisis happened and I started hearing the lockdowns that were starting to happen and rolling out across the country, I knew and it was confirmed That the domestic violence was gonna go through the roof. We know that in recessions, domestic violence surges. Covet nineteen was no different, and we saw record numbers of calls. going to domestic violence hotlines across the country.

Rain, which is the um national rape and incest national hotline, reached out to me Friday before Mother's Day asked if I would like to participate in their PSA that they were producing. And so of course I said yes. And the only time in my calendar was on Mother's Day. I'm really proud of it. And again, it's one of those moments where I felt like you know, I know why I'm here and why I have continued to survive has been to be in that moment where, you know, I was strong enough to be a part of that campaign. You mentioned earlier that in your work with the UN

You had discussions and did some work around pandemics. Now that we're In one. Are you Surprised at how

We're reacting to it. As a country, as a world I is it following the patterns that you all had Worried about it or expected. Yeah, it is, actually.

Um, I'm surprised that we aren't as prepared as we should be to know that it could have been prevented is really frustrating. I hope that it's a teachable moment for us and one that we will never forget. And to remember that Our greatest strength, our greatest security around the world is only as strongest as our weakest link. We all know this in in business, right? Well, the same thing goes for global health. And when one country gets sick um or has an outbreak, it's not the time to turn away. It's the time to actually double down to invest in those countries to help contain it, to get intelligence around it, to learn about it. I guess to use the time wisely to prepare and help contain it. And if we are as strong as we say that we are, we should look at

global health as a matter of national security for the United States. I think this might be the best lesson that we might ever have around how we think about foreign aid. I hope that we really take this moment and use it as a teachable moment for generations to come because This isn't the last global pandemic. This is One of many, there will continue to be global pandemics in the world. Um, it's only a matter of time. These are stressful times, and I'm curious.

what you do to manage Your own stress? Yeah, well, mental health, uh it has been something that, you know, I have um worked on most of my life. And what I found the thing that really gets me through that has continued to always be something that's important has been self care. It's why life weight even exists. It's eating the right kinds of foods that help fuel my goals, fuel the things that I wanna do. Eating properly, working out, moving your body, how you talk to yourself, how you treat yourself. We're talking about boundaries. We're talking about self-love. We're talking about um giving yourself the space and permission to say, I matter first, and I have to put my oxygen mask on to take care of everyone else. This is a non negotiable for me. And I would say like in that first month of March was really, really challenging. Um I

Belt. A lot like those full first days right after my father died, where it was this really traumatic. crisis like running on adrenaline and then eventually, you know, moving past the initial trauma and initial shock. And I think it's really important that we all recognize that this is kind of the new normal and everyone's doing the best that they can that we're learning to adapt and to recognize that this isn't about, you know, who's the smartest or who has the most you know, we're all in this together, but but that it is about adapting and the ability to be nimble and fast and adapt to these new circumstances. I've been in this feeling of uncertainty and crisis and darkness and I don't

you know, that feeling of like I don't know what to do. But to recognize that we actually do know what to do. Um I think it's really important that we don't forget that women have been navigating crisis since the beginning of time. And now more than ever, I think it's really important that we help women lead and and push them into those positions. Like I think it's gonna be really easy for diversity to kind of fall off the table. I think it's really important that we again remember that Women are really great in crisis, and if I was a board right now, I would be putting as many women into positions of of leadership as I possibly could. How do you balance those two sides of I gotta take care of myself a little bit.

But oh my gosh, if there's any time where I should Sacrifice that it's right now. I've spent the last six seven weeks just working almost twenty-four seven. This week I finally just took a few days and hours kind of For myself to I have found the right

rhythm for myself to balance how much can I push How far can I push? So at some point you have to recognize you are not helping anyone and you need to pull it back a little, take care of yourself. But I think it's intuitive for me. If it's not for you, you know, I think we have a lot of tools we're offering at Lifeway, actually. We've been streaming on demand content with Meditation experts with top of the line best in class. fitness experts, we've been helping folks learn how to cook, we've been doing programming for kids. So offering as many of these self care tools and making them as accessible, really democratizing them for as many people as we possibly could.

What I was remembering was my father, when he was taking Life Way public, we were supposed to go public on Black Friday and Obviously he couldn't, and he was devastated. And I I remember being a kid and experiencing that and how all the adults in the room just looked Really.

like they were in crisis and look where we got, right? So I would say to any entrepreneur That There is always a sunrise. You know, this might feel really daunting. Things look so dismal. Um, that I would say that, you know, human ingenuity always takes over, and we will find the opportunities And then I also, you know, continue to go back to those moments right after my dad died and how dark it felt. And nobody believed in in me, nobody believed in the company, but I believed in me. And uh that was enough. That was enough to get us through.

And the same thing goes for right now, you know, when I look at uh data around, you know, how consumer shopping behavior is changing, how the decisions are are being made, what foods are being selected, you know, our our need for immunity, um, the way that consumers are cooking more at home. You know, all of these things we can all take into consideration. And I would say not just in food, in any space that you're in. absorbing this data and understanding what you can do with it is really important and and to adjust your business model based on that data.

It's going to be a while before things What whatever that even looks like. Make Decisions based on that. Well, Julie, thank you so much for doing this. Masters of Scale Rapid Response is a wait what original.

The show is recorded remotely using sanitized audio gear. It's hosted by me, Bob Saphion, Masters of Scales editor at Large, and Masters of Scale host, Reed Hoffman. Our executive producers are June Cohen and Darren Triff. Our supervising producer is Jay Punjabi. Our producer is Jordan McLeod.

Scripts by Christina Gonzalez. Original music and sound design by Ryan Holiday and Daniel Nissenbaum. Audio editing by Keith J. Nelson and Lina Sillicen. Mixing and Mastering by Brian Pugh. Special thanks to Emily McManus, Sarah Sandman.

Adam Heiner, Kelsey Capitano, Tim Cronin. Charlie Manessis. And Saida Sapia. Visit masters of scale dot com slash rapid response.

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