| Lifeway Foods, Inc.For Immediate Release |   |
|------------------------------------------|--------|

| · | Sales increased more than seven percent to $15,546,556 |
|--------|--------------------------------------------------------|

| · | Increased marketing fueling organic growth |
|--------|--------------------------------------------|

| · | Working capital increased more than 11 percent to $8,682,934 |
|--------|--------------------------------------------------------------|

| · | Signed a 90-day exclusive distribution agreement with Whole Foods to bring three flavors of new Bio Kefir to store locations nationwide |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

| · | Paid outstanding debt notes totaling approximately $850,000 on August 5th, six months ahead of schedule, due to strong cash flow |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

| · | Purchased 101,476 shares during the second quarter, due to strong cash flow |
|--------|-----------------------------------------------------------------------------|

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|                              |   | (Unaudited)        |       |   | (Unaudited)      |   |
|-----------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                              |   | Three Months Ended |       |   | Six Months Ended |   |
|                              |   | June 30,           |       |   | June 30,         |   |
|                              |   | 2010               |       |   | 2009             |   |   | 2010 |   |   | 2009 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |
| Sales                             |   |               | 15,546,556 |   |             |   | 14,479,429 |   |   |   | 31,510,715 |   |   |   | 28,215,509 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                |   |               | 9,273,872  |   |             |   | 7,978,110 |   |   |   | 17,892,871 |   |   |   | 16,102,691 |   |
| Depreciation expense              |   |               | 281,220    |   |             |   | 353,654 |   |   |   | 684,595 |   |   |   | 570,428 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total cost of goods sold          |   |               | 9,555,092  |   |             |   | 8,331,764 |   |   |   | 18,577,466 |   |   |   | 16,673,119 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                      |   |               | 5,991,464  |   |             |   | 6,147,665 |   |   |   | 12,933,249 |   |   |   | 11,542,390 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                  |   |               | 2,183,304  |   |             |   | 1,386,815 |   |   |   | 4,710,777 |   |   |   | 2,694,740 |   |
| General and administrative        |   |               | 1,478,062  |   |             |   | 1,437,505 |   |   |   | 2,968,219 |   |   |   | 2,810,103 |   |
| Amortization expense              |   |               | 175,761    |   |             |   | 168,698 |   |   |   | 351,521 |   |   |   | 339,388 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses          |   |               | 3,837,127  |   |             |   | 2,993,018 |   |   |   | 8,030,517 |   |   |   | 5,844,231 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations            |   |               | 2,154,337  |   |             |   | 3,154,647 |   |   |   | 4,902,732 |   |   |   | 5,698,159 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):           |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest and dividend income      |   |               | 53,176     |   |             |   | 48,506 |   |   |   | 107,684 |   |   |   | 110,717 |   |
| Rental Income                     |   |               | 2,800      |   |             |   | 11,947 |   |   |   | 4,035 |   |   |   | 21,294 |   |
| Interest expense                  |   |               | (80,164    | )      |             |   | (110,090 | ) |   |   | (176,106 | ) |   |   | (264,473 | ) |
| Loss on Disposition of Equipment  |   |               | ---        |   |             |   | (2,825 | ) |   |   | --- |   |   |   | (2,825 | ) |
| Gain (loss) on sale of marketable |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|   securities, net       |   |               | 84,043     |   |             |   | 53,638 |   |   |   | 54,784 |   |   |   | (96,152 | ) |
| Total other income (expense)      |   |               | 59,855     |   |             |   | 1,176 |   |   |   | (9,603 | ) |   |   | (231,439 | ) |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Income before provision for       |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| income taxes                      |   |               | 2,214,192  |   |             |   | 3,155,823 |   |   |   | 4,893,129 |   |   |   | 5,466,720 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes        |   |               | 1,029,688  |   |             |   | 623,918 |   |   |   | 1,939,936 |   |   |   | 1,387,350 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income                        |   | $                  | 1,184,504  |   |             | $      | 2,531,905 |   |   | $ | 2,953,193 |   |   | $ | 4,079,370 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings        |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| per common share                  |   |               | 0.07       |   |             |   | 0.15 |   |   |   | 0.18 |   |   |   | 0.24 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of        |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| shares outstanding                |   |               | 16,701,539 |   |             |   | 16,823,691 |   |   |   | 16,731,549 |   |   |   | 16,823,691 |   |

----

|                                                      |   | (Unaudited) |             |   |   |   |              |         |   |
|-----------------------------------------------------------|--------|-------------|------------------|--------|--------|--------|-------------------|--------------|--------|
|                                                      |   | June 30,    |             |   |   |   |              | December 31, |   |
|                                                      |   | 2010        |             |   | 2009   |   |              | 2009         |   |
|                                                      |   |        |             |   |   |   |              |         |   |
| Cash flows from operating activities:                     |   |        |             |   |   |   |              |         |   |
| Net income                                                |   | $           | 2,953,193        |   |   | $      | 4,079,370         |         |   | $ | 5,569,702 |   |
| Adjustments to reconcile net income to net                |   |        |             |   |   |   |              |         |   |   |   |   |
| cash flows from operating activities, net of acquisition: |   |        |             |   |   |   |              |         |   |   |   |   |
| Depreciation and amortization                             |   |        | 1,036,116        |   |   |   | 909,816           |         |   |   | 1,811,190 |   |
| (Gain) Loss on sale of investments, net                   |   |        | ( 54,784    | )      |   |   | 96,152            |         |   |   | 278,474 |   |
| Loss on disposition of assets                             |   |        | ---              |   |   |   | 2,825             |         |   |   | 2,826 |   |
| Deferred income taxes                                     |   |        | ( 290,465   | )      |   |   | 179,796           |         |   |   | 389,754 |   |
| Treasury stock issued for compensation                    |   |        | 62,317           |   |   |   | 82,318            |         |   |   | 144,636 |   |
| Decrease in allowance for doubtful accounts               |   |        | ---              |   |   |   | ---               |         |   |   | ( 75,000 | ) |
| (Increase) decrease in operating assets:                  |   |        |             |   |   |   |              |         |   |   |   |   |
| Accounts receivable                                       |   |        | ( 1,780,774 | )      |   |   | ( 752,978    | )            |   |   | ( 612,915 | ) |
| Other receivables                                         |   |        | ( 92,631    | )      |   |   | ( 25,416     | )            |   |   | ( 7,758 | ) |
| Inventories                                               |   |        | ( 857,743   | )      |   |   | ( 346,800    | )            |   |   | 173,419 |   |
| Refundable income taxes                                   |   |        | 1,308,978        |   |   |   | ( 435,205    | )            |   |   | ( 475,635 | ) |
| Prepaid expenses and other current assets                 |   |        | ( 29,433    | )      |   |   | 5,029             |         |   |   | 9,506 |   |
| Increase (decrease) in operating liabilities:             |   |        |             |   |   |   |              |         |   |   |   |   |
| Accounts payable                                          |   |        | ( 504,764   | )      |   |   | ( 440,911    | )            |   |   | 298,800 |   |
| Accrued expenses                                          |   |        | ( 82,791    | )      |   |   | 36,719            |         |   |   | 96,062 |   |
| Accrued income taxes                                      |   |        | 604,323          |   |   |   | ---               |         |   |   | --- |   |
| Net cash provided by financing activities                 |   |        | 2,271,542        |   |   |   | 3,390,715         |         |   |   | 7,603,061 |   |
|                                                      |   |        |             |   |   |   |              |         |   |   |   |   |
| Cash flows from investing activities:                     |   |        |             |   |   |   |              |         |   |   |   |   |
| Purchases of investments                                  |   |        | ( 538,852   | )      |   |   | ( 3,342,662  | )            |   |   | ( 6,156,682 | ) |
| Proceeds from sale of investments                         |   |        | 1,502,724        |   |   |   | 4,127,666         |         |   |   | 6,928,321 |   |
| Proceeds from redemption of certificates of deposit       |   |        | 102,545          |   |   |   | ---               |         |   |   | --- |   |
| Purchases of property and equipment                       |   |        | ( 1,292,741 | )      |   |   | ( 714,052    | )            |   |   | ( 1,766,280 | ) |
| Acquisition of Fresh Made, net of cash acquired           |   |        | ---              |   |   |   | ( 10,498,224 | )            |   |   | ( 11,042,546 | ) |
| Net cash used in investing activities                     |   |        | ( 226,324   | )      |   |   | ( 10,427,272 | )            |   |   | ( 12,037,187 | ) |
|                                                      |   |        |             |   |   |   |              |         |   |   |   |   |
| Cash flows from financing activities:                     |   |        |             |   |   |   |              |         |   |   |   |   |
| Proceeds of note payable                                  |   |        | 250,000          |   |   |   | 9,342,085         |         |   |   | 9,353,504 |   |
| Checks written in excess of bank balances                 |   |        | 504,398          |   |   |   | ---               |         |   |   | 342,976 |   |
| Purchases of treasury stock                               |   |        | ( 1,418,657 | )      |   |   | ( 402,947    | )            |   |   | ( 905,607 | ) |
| Repayment of notes payable                                |   |        | ( 1,152,876 | )      |   |   | ( 1,597,063  | )            |   |   | ( 4,003,588 | ) |
| Net cash (used in) provided by in financing activities    |   |        | ( 1,817,135 | )      |   |   | 7,342,075         |         |   |   | 4,787,285 |   |
|                                                      |   |        |             |   |   |   |              |         |   |   |   |   |
| Net increase in cash and cash equivalents                 |   |        | 228,083          |   |   |   | 305,518           |         |   |   | 353,159 |   |
|                                                      |   |        |             |   |   |   |              |         |   |   |   |   |
| Cash and cash equivalents at the beginning of the period  |   |        | 630,407          |   |   |   | 277,248           |         |   |   | 277,248 |   |
|                                                      |   |        |             |   |   |   |              |         |   |   |   |   |
| Cash and cash equivalents at the end of the period        |   | $           | 858,490          |   |   | $      | 582,766           |         |   | $ | 630,407 |   |

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