Lifeway Foods Rallies on Costco Deal

Shares of Lifeway Foods Inc., a maker of drinkable yogurt, cheese and other dairy products, rallied on Wednesday, after the company said it has started selling its products on a test basis to Costco Wholesale Corp., the nation's biggest wholesale retailer.

Shares of Lifeway advanced $1.03, or 9.8 percent, to $11.53 on the Nasdaq, where it was among the biggest percentage gainers in the session. The company's best-known product is kefir, a dairy drink that is marketed as being as more nutritional than regular yogurt.

Lifeway has begun distributing its products to a test market of certain Costco stores in the Midwest region, the company said in a release after Tuesday's market close.

The agreement with Costco shows that Kefir is "growing in popularity and acceptance" in the mass market, Lifeway said. Kefir is now sold in the dairy section of grocery and gourmet food stores.

The first shipments of kefir are expected to show up in Costco this week, Lifeway said. The Costco deal follows sales agreements with Target Corp. and sandwich chain Cosi Inc. that Lifeway signed earlier this year.

Lifeway shares hit a 52-week high of $18.17 in mid-July and are up 26 percent so far this year.