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Segments, Products and Customers
 9 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
Note 13 - Segments, Products and Customers

The Company manufactures probiotic, cultured, functional dairy health food products. The Company’s primary product is kefir, a dairy beverage similar to but distinct from yogurt, in several flavors and in several packages. In addition to the drinkable products, Lifeway manufactures “Lifeway Farmer Cheese,” a line of various farmer cheeses.

 

Net sales of products by category for the three and nine months ended September 30 were as follows:

 

   

Three months ended

September 30,

    

Nine months ended

September 30,

  
    2015     2014     2015     2014  
                                 
Drinkable Kefir other than ProBugs   $ 25,901,949     $ 26,142,269     $ 76,723,238     $ 76,793,828  
Pro Bugs     1,702,481       1,898,439       5,999,457       5,582,374  
Lifeway Farmer Cheese     1,660,377       1,565,652       5,124,754       4,933,441  
Frozen Kefir     333,858       503,862       1,194,528       1,497,701  
Net Sales   $ 29,598,665     $ 30,110,222     $ 89,041,977     $ 88,807,344  
                                 

  

The Company has two operating segments, the sale of fermented dairy products and three retail locations in Illinois that sell the Company’s fermented dairy products. The Company has determined reportable segments based on how the Company’s 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 performance of the operating segments, has been identified as the Chief Financial Officer and the board of directors that makes strategic decisions. Substantially all of the consolidated revenues of the Company relate to the sale of fermented dairy products which are produced using the same processes and materials and are sold to consumer retail food sellers through direct delivery and distributors in the United States.

 

The Company has less than $1 million in revenues attributable to its retail locations during the three and nine months ended September 30, 2015 and 2014. The annual revenues attributable to the three retail locations are not material and accordingly the Company has not presented financial information separately for this operating segment. Substantially all of the consolidated revenues and assets of the Company are within the United States.

 

Significant Customers -Sales are predominately to companies in the retail food industry, located within the United States. Two major customers accounted for approximately 27% and 28% of gross sales for the nine months ended September 30, 2015 and 2014, respectively and 25% and 29% of gross sales for the three months ended September 30, 2015 and 2014, respectively.