UNITED  STATES
              SECURITIES  AND  EXCHANGE  COMMISSION
                     Washington, D.C.  20549
                                                                 
                           FORM  10-Q
                                
     [x]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

          For the quarterly period ended March 31, 1999

                               OR

     [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from __________ to __________

                 Commission file number 0-22018

                  CELESTIAL  SEASONINGS,  INC.
     (Exact name of Registrant as specified in its charter)


              Delaware                         84-1097571
   (State or other jurisdiction of          (I.R.S. Employer
   incorporation or organization)         Identification No.)
                                                    

          4600 Sleepytime Drive, Boulder CO  80301-3292
  (Address of principal executive offices, including zip code)

                         (303) 530-5300
      (Registrant's telephone number, including area code)


Indicate  by check mark whether the Registrant (1) has filed  all
reports  required  to be filed by Section 13 or  15  (d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the Registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

                     Yes [X]          No [ ]

As  of  April  30,  1999 the Registrant had 8,318,283  shares  of
Common  Stock, $0.01 Par Value, outstanding. This report on  Form
10-Q contains 17 pages.

<PAGE>


                    CELESTIAL  SEASONINGS,  INC.

                                INDEX

PART I - FINANCIAL INFORMATION
------------------------------


                                                PAGE(S)
                                                -------
  ITEM 1. FINANCIAL STATEMENTS                    
                                                
        Unaudited consolidated income              3
        statements
                                                   
        Unaudited consolidated balance sheets      4
                                                   
        Unaudited consolidated statements of       5
        cash flows
                                                   
        Notes to unaudited consolidated           6-8
        financial statements
                                                   
  ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS   9-13
        OF FINANCTIAL CONDITION AND RESULTS OF
        OPERATIONS

PART II - OTHER INFORMATION

  ITEM 1.  LEGAL PROCEEDINGS                      14
                                                   
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF     14
           SECURITY HOLDERS 
                         
  ITEM 5.  OTHER INFORMATION                      14
                                                   
  Item 6.  EXHIBITS AND REPORTS ON FORM 8-K       14
                                                   
  SIGNATURES                                      15



                             PAGE 2


<PAGE>
                                  
                     CELESTIAL SEASONINGS, INC.
                   CONSOLIDATED INCOME STATEMENTS
              (in thousands, except per share amounts)
                             (unaudited)
<TABLE>
<CAPTION>
                                  
                                   Three Months Ended        Six Months Ended
                                       March 31,                 March 31,
                                   ------------------        ----------------
                                     1999      1998           1999      1998
                                     ----      ----           ----      ----
<S>                                <C>       <C>            <C>       <C>
Case volume                          1,733     1,611          3,629     3,102
                                  
Net sales                          $31,576   $32,329        $69,238   $59,729
Cost of goods sold                  10,332    11,198         24,335    21,329
                                   -------   -------        -------   -------
      Gross profit                  21,244    21,131         44,903    38,400
                                  
Operating expenses:
      Selling and marketing         15,288    13,723         32,532    25,342
      General and administrative     1,284     1,516          2,978     3,091
      Amortization of intangibles      305       343            616       663
                                   -------   -------        -------   -------
         Total operating expenses   16,877    15,582         36,126    29,096
                                  
Operating income                     4,367     5,549          8,777     9,304
Interest expense                       186       116            428       232
                                   -------   -------        -------   -------
Income before income taxes           4,181     5,433          8,349     9,072
Income taxes                         1,568     2,092          3,131     3,493
                                   -------   -------        -------   -------
Net income                         $ 2,613   $ 3,341        $ 5,218   $ 5,579
                                   =======   =======        =======   =======
Earnings per share-basic:
      Net income per common share  $  0.31   $  0.40        $  0.63   $  0.68
                                   =======   =======        =======   =======
      Weighted average common shares 8,313     8,256          8,310     8,206
                                   =======   =======        =======   =======
Earnings per share-assuming dilution:
      Net income per common share  $  0.29   $  0.38        $  0.59   $  0.65
                                   =======   =======        =======   =======
      Weighted average common shares 9,003     8,692          8,902     8,615
                                   =======   =======        =======   =======
</TABLE>
                                  
     See accompanying notes to unaudited consolidated financial statements.

                                    PAGE 3
                                  
<PAGE>

                     CELESTIAL  SEASONINGS,  INC.
                    CONSOLIDATED  BALANCE  SHEETS
                       (dollars in thousands)
                             (unaudited)

                               ASSETS

<TABLE>
<CAPTION>
                                               March 31,      September 30,
                                                 1999             1998
                                               --------       ------------

<S>                                            <C>              <C>
Current assets:
  Cash and cash equivalents                    $    276         $  2,533
  Accounts receivable, net of allowance 
    (Mar. - $549 Sept. - $534)                   16,569           15,156
  Inventory                                      19,256           23,185
  Deferred income taxes                             451               93
  Prepaid income taxes                               80              630
  Prepaid expenses                                2,576            2,111
                                               --------         --------
     Total current assets                        39,208           43,708

Property, plant and equipment, net               19,119           19,240
Intangible assets, net                           12,207           12,598
Goodwill, net                                     5,730            5,870
Deferred income taxes                               175              217
Other assets                                        930            1,014
                                               --------         --------
Total assets                                   $ 77,369         $ 82,647
                                               ========         ========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                             $  4,649         $  8,656
  Accrued liabilities and wages                   6,643            7,551
  Accrued interest payable                           71               47
  Current portion of long-term debt                 300            4,323
                                               --------         --------
     Total current liabilities                   11,663           20,577

Long-term debt                                    8,900           10,750

Commitments

Stockholders' equity:
  Common stock, $.01 par value -
   authorized 15,000,000 shares;
    Mar. - issued 8,336,083 shares,
     outstanding 8,318,283 shares;
    Sept. - issued 8,322,528 shares,
     outstanding 8,304,728 shares                    83               83
  Capital surplus                                35,279           35,011
  Retained earnings                              21,619           16,401
  Treasury stock, 17,800 shares of
   common stock at cost                            (175)            (175)
                                               --------         --------
     Total stockholders' equity                  56,806           51,320
                                               --------         --------
Total liabilities and stockholders' equity     $ 77,369         $ 82,647
                                               ========         ========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                 PAGE 4


<PAGE>

                     CELESTIAL SEASONINGS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (in thousands)
                             (unaudited)
<TABLE>
<CAPTION>
                                                          Six Months Ended
                                                             March 31,
                                                          ----------------
                                                           1999      1998
                                                          -------  -------
<S>                                                       <C>      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                $ 5,218  $ 5,579
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
    Depreciation                                              848      643
    Amortization of intangibles                               616      663
    Amortization of financing fees                            105       97
    Deferred income taxes                                    (316)    (316)
    Gain on sale of asset                                    (100)       -
  Changes in operating assets and liabilities:
    Accounts receivable                                    (1,413)  (8,165)
    Inventory                                               3,929   (7,241)
    Prepaid income taxes                                      550        -
    Prepaid expenses                                         (465)    (572)
    Accounts payable                                       (4,007)   5,135
    Accrued liabilities and wages                            (908)   2,250
    Accrued income taxes                                        -    1,388
    Accrued interest payable                                   24       (1)
                                                          -------  -------
Net cash provided by (used in) operating activities         4,081     (540)
                                                          -------  -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of asset                                 148        -
  Capital expenditures                                       (775)    (597)
  Increase in intangible assets                               (85)    (171)
  Increase in other assets                                    (21)       -
                                                          -------  -------
Net cash used in investing activities                        (733)    (768)
                                                          -------  -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from common stock issuance                         268      948
  Increase in long-term debt                                2,800        -
  Reduction in long-term debt                              (8,673)    (169)
                                                          -------  -------
Net cash (used in) provided by financing activities        (5,605)     779
                                                          -------  -------
NET DECREASE IN CASH AND CASH EQUIVALENTS                  (2,257)    (529)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD            2,533    2,829
                                                          -------  -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $   276  $ 2,300
                                                          =======  =======
CASH PAID FOR INTEREST                                    $   300  $   117
CASH PAID FOR INCOME TAXES                                $ 2,897  $ 2,421
</TABLE>

  See accompanying notes to unaudited consolidated financial statements

                              PAGE 5


<PAGE>
                     CELESTIAL SEASONINGS, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  
1.   GENERAL

      Basis  of Presentation - Each fiscal quarter includes  thirteen
weeks.  The Company's second fiscal quarter ends on the last Saturday
of  March.  For  presentation purposes, however,  the  second  fiscal
quarter is presented as if it ended on March 31.

      The  unaudited  consolidated financial statements  include  the
accounts  of the Company and its subsidiaries. Intercompany  balances
have been eliminated in consolidation.

      Interim  Financial  Information  -  The  financial  information
contained  herein is unaudited but includes all normal and  recurring
adjustments  which, in the opinion of management,  are  necessary  to
present  fairly the information set forth. The unaudited consolidated
financial  statements  should  be  read  in  conjunction   with   the
consolidated financial statements which are included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1998. The
Company's  business  is  seasonal;  therefore,  results  for  interim
periods are not necessarily indicative of results to be expected  for
the fiscal year of the Company ending September 30, 1999. The Company
believes   that  this  Quarterly  Report  filed  on  Form   10-Q   is
representative of its financial position, its results  of  operations
and  its  cash  flows for the periods ended March 31, 1999  and  1998
covered thereby.

      Earnings  Per Share - In accordance with Statement of Financial
Accounting  Standards No. 128, "Earnings per Share," the increase  in
weighted  average common shares - assuming dilution  is  due  to  the
application  of  the  treasury  share method  for  outstanding  stock
options. The application of the treasury share method resulted in  an
additional 690,000 and 436,000 weighted average shares for the  three
months  ended   March  31,  1999  and  1998,  respectively,  and   an
additional  592,000 and 409,000 weighted average shares for  the  six
months ended March 31, 1999 and 1998 respectively.

      Comprehensive  Income - In June 1997, the Financial  Accounting
Standards  Board  issued Statement of Financial Accounting  Standards
No.  130  ("SFAS  130"), "Reporting Comprehensive Income."  SFAS  130
requires   companies  to  disclose  comprehensive  income   and   its
components. The Company currently has no items of other comprehensive
income and therefore SFAS 130 does not apply.

                                   PAGE 6

<PAGE>

      Operating  Segments - Commencing with fiscal 1999, the  Company
redefined  its reportable segments as wellness products and  beverage
products.  The  wellness  segment  includes  the  Company's   dietary
supplements  in  capsule form along with related wellness  teas.  The
beverage segment contains the Company's herb, green, specialty black,
organic and chai teas. The Company believes that its current forms of
advertising  are  designed  to develop an  overall  brand  awareness.
Therefore,  advertising  is  treated  as  a  corporate  expense,  not
directly   attributable  to  any  one  segment.  Trade  and  consumer
promotion expenses for specific product lines are charged directly to
operating segments.

<TABLE>
<CAPTION>

                                Three months ended       Six months ended
                                    March 31,                March 31,
                                ------------------       ----------------
                                 1999       1998          1999      1998
                                -------   -------        -------  -------
<S>                             <C>       <C>            <C>      <C>
Net sales:
     Beverages                  $26,820   $25,166        $56,636  $50,690
     Wellness                     4,756     7,163         12,602    9,039
                                -------   -------        -------  -------
         Total net sales        $31,576   $32,329        $69,238  $59,729

Operating income:
     Beverages                  $ 8,021   $ 8,191        $18,407  $14,786
     Wellness                      (112)    1,747            464    1,417
                                -------   -------        -------  ------- 
                                  7,909     9,938         18,871   16,203
     Corporate advertising
       expense                   (1,953)   (2,530)        (6,500)  (3,145)
     General and administrative  (1,284)   (1,516)        (2,978)  (3,091)
     Amortization of intangibles   (305)     (343)          (616)    (663)
                                -------   -------        -------  -------
       Total operating income     4,367     5,549          8,777    9,304
Interest expense                    186       116            428      232
                                -------   -------        -------  -------
Income before income taxes      $ 4,181   $ 5,433        $ 8,349  $ 9,072
                                =======   =======        =======  =======
<CAPTION>
                                 March 31,      September 30,
                                   1999             1998
                                 --------       ------------
<S>                               <C>              <C>
Assets:
     Beverages                    $59,335          $55,894
     Wellness                      13,663           20,341
     Corporate                      4,371            6,412
                                  -------          -------
            Total assets          $77,369          $82,647
                                  =======          =======
</TABLE>

                                    PAGE 7




<PAGE>

2.   DETAIL OF INVENTORY ACCOUNTS

<TABLE>
<CAPTION>
                             March 31,      September 30,
                               1999             1998
                             --------       ------------
<S>                           <C>              <C>
Raw materials and supplies    $11,537          $10,941
Work in process                 1,131            2,047
Finished goods                  7,026           10,406
                              -------          -------                
                               19,694           23,394
Less inventory reserves           438              209
                              -------          -------    
Total                         $19,256          $23,185
                              =======          =======    
</TABLE>

3.   LEGAL  PROCEEDINGS

      On May 5, 1995, a purported stockholder of the Company filed  a
lawsuit,  Schwartz  v. Celestial Seasonings, Inc.  et.  al.,  in  the
United  States  District Court for the District  of  Colorado  (Civil
Action  Number:   95-K-1045), in connection with disclosures  by  the
Company concerning the Company's license agreement with Perrier Group
of  America,  Inc.  which  was terminated on  January  1,  1995.   In
addition to the Company, the complaint names as defendants certain of
the Company's present and former directors and officers, PaineWebber,
Inc., Shearson/Lehman Brothers, Inc., and Vestar/Celestial Investment
Limited Partnership.  The complaint, which was pled as a class action
on  behalf  of persons who acquired the Company's common  stock  from
July  12,  1993 through May 18, 1994, sought money damages  from  the
Company and the other defendants for the class in the amount of their
loss  on  their  investment in the Company's common  stock,  punitive
damages,  costs and expenses of the action, and such other relief  as
the court may order.

     On November 6, 1995, the federal district court granted a motion
by  the  Company and the other defendants to dismiss  the  case.   On
September  5,  1997,  however,  the court  of  appeals  reversed  the
decision  of the district court and returned the case to the district
court for further proceedings. The case has been certified as a class
action.  Due to the uncertainties inherent in the litigation process,
the Company is unable to predict the outcome of this matter.

                                 PAGE 8


<PAGE> 

                    CELESTIAL  SEASONINGS,  INC.
       MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
               CONDITION  AND  RESULTS  OF OPERATIONS

SEASONALITY

      The Company's business is seasonal and its quarterly results of
operations reflect the results of increased demand for the  Company's
hot  tea  products  in the cooler months of the year.  The  following
table  sets forth selected unaudited quarterly consolidated financial
and operational data for the six most recent quarters.

<TABLE>
<CAPTION>
                                       Quarter Ended
                  --------------------------------------------------------------
                   Fiscal 1999                       Fiscal 1998
                  -----------------  -------------------------------------------
                  Mar. 31  Dec. 31     Sept. 30   June 30   Mar. 31   Dec. 31
                  -------  -------     --------   -------   -------   -------
                                (in thousands)
<S>               <C>      <C>          <C>       <C>       <C>       <C>
Case sales          1,733    1,896        1,120       857     1,611     1,491
Net sales         $31,576  $37,662      $23,073   $19,395   $32,329   $27,400
Gross profit       21,244   23,659       14,586    12,573    21,131    17,269
Operating income    4,367    4,410        1,782       355     5,549     3,755
Operating margin     13.8%    11.7%         7.7%      1.8%     17.2%     13.7%
Net income        $ 2,613  $ 2,605      $ 1,053   $   124   $ 3,341   $ 2,238
Percent of fiscal
  year net sales      N/A      N/A         22.6%     19.0%     31.6%     26.8%
                                  
</TABLE>
                                  
     Quarterly fluctuations in sales volume and operating results are
due to a number of factors, including the timing of trade promotions,
advertising,   consumer  promotions,  production   requirements   and
inventory  adjustments by customers. Due to the timing and extent  of
these factors the impact on sales volume and operating results can be
significant.

RESULTS OF OPERATIONS

      The  following  table is derived from the  Company's  unaudited
consolidated income statements for the periods indicated and presents
(i)  the results of operations as a percentage of net sales and  (ii)
the  percentage change in the dollar amounts of each  item  from  the
prior period.

<TABLE>
<CAPTION>
                                                        Period-to-Period
                        Percentage of Net Sales Percentage Increase/(Decrease)
                        ----------------------- ------------------------------
                       Three Months   Six Months   Three Months  Six Months
                          Ended         Ended         Ended        Ended
                        March  31,    March 31,     March  31,   March 31,
                       ------------  -----------   ------------  -----------
                       1999    1998  1999   1998   1999 to 1998  1999 to 1998
                       -----  -----  -----  -----  ------------  ------------
<S>                    <C>    <C>    <C>    <C>       <C>           <C>
Net sales              100.0% 100.0% 100.0% 100.0%    (2.3)%        15.9%
Cost of goods sold      32.7   34.6   35.2   35.7     (7.7)         14.1
                       -----  -----  -----  -----   
Gross profit            67.3   65.4   64.8   64.3      0.5          16.9
Selling and marketing   48.4   42.5   47.0   42.4     11.4          28.4
General and
  administrative         4.1    4.7    4.3    5.2    (15.3)         (3.7)
Amortization of
  intangibles            1.0    1.0    0.9    1.1    (11.1)         (7.1)
                       -----  -----  -----  -----
Operating income        13.8   17.2   12.6   15.6    (21.3)         (5.7)
Interest expense         0.6    0.4    0.6    0.4     60.3          84.5
                       -----  -----  -----  -----
Income before income
  taxes                 13.2   16.8   12.0   15.2    (23.0)         (8.0)
Income taxes             4.9    6.5    4.5    5.9    (25.0)        (10.4)
                       -----  -----  -----  -----
Net income               8.3%  10.3%   7.5%   9.3%   (21.8)%        (6.5)%
                       =====  =====  =====  =====

</TABLE>
                             PAGE 9


<PAGE>

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 1998

      Net  sales. Net sales for the three months ended March 31, 1999
decreased 2.3% to $31.6 million from $32.3 million for the comparable
period in fiscal 1998. The net sales decline was primarily the result
of  a  33.6% decrease in sales of the Company's wellness products  to
$4.8  million  during  the second quarter of fiscal  1999  from  $7.2
million  for  the  comparable period in 1998. A general  softness  in
dietary supplements and 1998's inventory build up contributed to  the
decline. While the wellness capsules experienced a significant  sales
decrease, an increase in the Company's wellness teas partially offset
this  decline. In addition, a significant number of late  orders  for
the  Company's tea products were not shipped prior to the  conclusion
of  the  three  months ended March 31, 1999 due to transition  issues
related to a new leased warehouse and production shortages of certain
tea products. These issues are being addressed by the Company through
the  completion  of  the  transition to its new  warehouse,  and  the
installation  of  a  new production line which is anticipated  to  be
completed  during  the fall of 1999. This new  line  is  expected  to
increase  production capacity by approximately  18%.  The  net  sales
decrease  was  partially offset by a 6.6% increase in  sales  of  the
Company's  beverage products to $26.8 million from $25.1 million  for
the   comparable   period  in  1998.  The  increase   was   primarily
attributable to increased sales of the Company's green tea products.

      Gross profit. Gross profit for the three months ended March 31,
1999  was essentially unchanged from the comparable period in  fiscal
1998.  The  Company's gross profit margin as a percent of  net  sales
increased  to 67.3% from 65.4% for the comparable prior year  period.
The Company experienced increased margins in its beverage segment due
to  increased  sales  of  its higher margin green  tea  products  and
decreased  sales  of its lower margin specialty black  tea  products.
This  increase  was partially offset by the effect of  lower  margins
realized  on the Company's wellness products. Lower margins from  its
wellness  products are expected to continue for the next few quarters
as  the  Company transitions its customers to a new 60-count line  of
capsules  from the existing 30-count line. The Company believes  this
new  line will represent a better value to the consumer and hopes  to
implement  production improvements that will permit gross margins  to
recover to that of previous levels for capsule products.

      Selling  and marketing expenses. Selling and marketing expenses
for  the  three months ended March 31, 1999 increased 11.4% to  $15.3
million from $13.7 million for the comparable period in fiscal  1998,
and  increased as a percentage of net sales to 48.4% from 42.5%.  The
increase  in  selling  and marketing expenses was  primarily  due  to
increased  trade  promotion  expenses  associated  with  the  ongoing
development of its wellness products and increased consumer promotion
expenses  associated  with  the  Company's  beverage  products.   The
increase was partially offset by a decrease in advertising expenses.

      General and administrative expenses. General and administrative
expenses  for  the three months ended March 31, 1999 decreased  15.3%
from  the  comparable  period in fiscal  1998,  and  decreased  as  a
percentage  of  net  sales  to  4.0% from  4.7%.   The  decrease  was
primarily  due to decreased expenses associated with the  support  of
accounts receivable.

      Operating  income. Operating income for the three months  ended
March 31, 1999, decreased 21.3% to $4.4 million from $5.5 million for
the comparable period in fiscal 1998 and as a percentage of net sales
decreased to 13.9% from 17.2%, primarily due to matters discussed  in
Net sales coupled with increased selling and marketing expenses.

      Interest  expense. Interest expense for the three months  ended
March  31, 1999 increased 60.3% from the comparable period in  fiscal
1998  primarily  as  a  result  of  increased  borrowings  under  the
Company's  credit facility in support of inventories of its  wellness
capsule products and accounts receivable.

                             PAGE 10


<PAGE>

SIX MONTHS ENDED MARCH 31, 1999 COMPARED TO THE SIX MONTHS ENDED
MARCH 31, 1998

      Net  sales. Net sales for the six months ended March  31,  1999
increased  15.9%  to  $69.2  million  from  $59.7  million  for   the
comparable period in fiscal 1998. Net sales growth was primarily  the
result of increased sales of the Company's green tea and wellness tea
products. This increase was partially offset by a decrease  in  sales
of the Company's specialty black tea products. The Company's wellness
products contributed net sales of approximately $12.6 million  during
the  first  half 1999, as compared to $9.0 million for the comparable
period  in  1998.  Net  sales  of  the  Company's  beverage  products
increased  11.7%  to  $  56.6  million from  $50.7  million  for  the
comparable period in fiscal 1998.

      Gross  profit. Gross profit for the six months ended March  31,
1999  increased  16.9% to $44.9 million from $38.4  million  for  the
comparable  period in fiscal 1998. The Company's gross profit  margin
as  a  percent of net sales remained relatively unchanged from  1998.
The Company experienced increased margins in its beverage segment due
to  increased  sales  of  its higher margin green  tea  products  and
decreased sales of its lower margin specialty black tea products. The
increase was partially offset by the effect of lower margins realized
on sales of the Company's wellness products.

      Selling  and marketing expenses. Selling and marketing expenses
for  the  six  months ended March 31, 1999 increased 28.4%  to  $32.5
million from $25.3 million for the comparable period in fiscal  1998,
and  increased as a percentage of net sales to 47.0% from 42.4%.  The
increase  in  selling  and marketing expenses was  primarily  due  to
increased  advertising  expenses associated  with  the  building  the
Company's   brand  awareness,  increased  trade  promotion   expenses
associated  with  ongoing development of its  wellness  products  and
increased  consumer promotion expenses associated with the  Company's
beverage products.

      General and administrative expenses. General and administrative
expenses for the six months ended March 31, 1999 decreased 3.7%  from
the  comparable period in fiscal 1998, and decreased as a  percentage
of net sales to 4.3% from 5.2%. The decrease was primarily due to the
recognition  of  a  gain associated with the sale  of  an  asset  and
decreased   expenses   associated  with  the  support   of   accounts
receivable.

      Operating  income. Operating income for the  six  months  ended
March 31, 1999, decreased 5.7% to $8.8 million from $9.3 million  for
the  comparable  period in fiscal 1998, and as a  percentage  of  net
sales  decreased  to  12.6% from 15.6%, primarily  due  to  increased
selling and marketing expenses.

      Interest  expense. Interest expense for the  six  months  ended
March  31, 1999 increased 84.5% from the comparable period in  fiscal
1998  primarily  as  a  result  of  increased  borrowings  under  the
Company's  credit facility in support of inventories of its  wellness
capsule products and accounts receivable.

                             PAGE 11


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The operations of the Company historically have been funded with
a  combination of internally generated funds and external borrowings.
Other  than funding ongoing operations, the Company's principal  uses
of  funds in the future are expected to be the development of new  or
existing  beverage and wellness products and the possible acquisition
of  brands,  product lines or other assets. The Company  expects  its
primary sources of financing for its future business activities  will
be funds from operations plus borrowings under credit facilities. The
Company  currently  believes that funds  from  operations  and  funds
expected  to  be available under the Company's credit facilities  are
likely  to  be  sufficient to meet operating and capital requirements
unless a significant acquisition is made.

      Cash  and cash equivalents decreased $2.2 million for  the  six
months  ended  March 31, 1999. Cash provided by operating  activities
was  $4.1  million  for  the six months ended  March  31,  1999.  The
Company's  investing  activities  used  cash  of  $0.7  million   and
financing  activities used cash of $5.6 million for  the  six  months
ended March 31, 1999.

      The  Company  incurred  capital expenditures  of  approximately
$860,000  during  the  six  months ended March  31,  1999,  including
$775,000  for  factory and computer equipment  and  $85,000  for  the
design  and  development  of  new  packaging  artwork.   The  Company
currently  anticipates  making  additional  capital  expenditures  of
approximately $4.9 million during the remainder of fiscal 1999.

YEAR 2000 COMPLIANCE

     A  number  of  computer programs are written  using  two  digits
rather than four to define the applicable year. As a result, computer
programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in
a   system   failure  or  miscalculations  causing   disruptions   of
operations,  including, among other things, a temporary inability  to
process  transactions,  send invoices, or engage  in  similar  normal
business activities.

     The  Company,  after  an inventory of its business  systems  and
business  interactions, is currently executing a plan to prepare  its
systems  and  business  relationships for the Year  2000.  The  major
internal components of the Company's systems are Year 2000 compliant,
the  Company  expects to complete its plan of preparation  for  other
peripheral  components on or around July 1, 1999. In the event  there
is  a  delay in the completion of the Year 2000 compliance plan,  the
Company  has  developed a contingency plan which  will  include  non-
computerized  backup systems. The ability of the Company  to  achieve
Year 2000 compliance is, however, highly dependent upon compliance of
the  systems  of the Company's customers, suppliers and  other  third
parties with which the Company has business relationships.

     The total cost to the Company of Year 2000 compliance activities
has  not  yet  been, and is not anticipated to be,  material  to  the
Company's  financial position or results of operations in  any  given
year.  These  costs,  and  the date on which  the  Company  plans  to
complete the Year 2000 modification and testing processes, are  based
on  management's  best estimates, which were derived  using  numerous
assumptions of future events including the continued availability  of
certain  resources, third party modification plans and other factors.
However,  there  can  be no guarantee that these  estimates  will  be
achieved and actual results could differ from those plans.

                           PAGE 12

<PAGE>

FORWARD LOOKING STATEMENTS

      The  statements contained in this Quarterly Report on Form 10-Q
which  are  not  historical facts, including,  but  not  limited  to,
statements   found  under  the  captions  "Results  of   Operations,"
"Liquidity  and Capital Resources" and "Year 2000 Compliance"  above,
are  forward-looking statements that involve a number  of  risks  and
uncertainties.  The actual results of the future events described  in
such  forward-looking statements could differ materially  from  those
stated  in  such forward-looking statements.  Among the factors  that
could  cause  actual results to differ materially are the  risks  and
uncertainties discussed in this Quarterly Report, including,  without
limitation,   the  portions  of  such  reports  under  the   captions
referenced above, and the uncertainties set forth from time  to  time
in the Company's filings with the Securities and Exchange Commission,
and  other  public statements. Such risks and uncertainties  include,
without  limitation, seasonality, interest in the Company's products,
general  economic  conditions,  consumer  trends,  inventory   levels
maintained by customers, costs and availability of raw materials  and
management  information  systems,  competition,  litigation  and  the
effect   of  governmental  regulation.  The  Company  disclaims   any
intention  or  obligation  to update any forward-looking  statements,
whether as a result of new information, future events or otherwise.

                                PAGE 13

<PAGE>


PART II   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
--------------------------
The  information  in  Note 3 to the Unaudited Consolidated  Financial
Statements included in Part I is incorporated herein.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The  annual  meeting  of  stockholders of the  Company  was  held  on
February 11, 1999. The following matters were submitted to a vote  of
the stockholders:

(a)  Election of directors - Three Class II directors were elected to
serve  until the 2002 annual meeting of stockholders and until  their
successors are elected.

                     Total Votes For       Total Votes Withheld
                     ---------------       --------------------
Ronald V. Davis         7,487,513                 46,965
John D. Howard          7,486,685                 47,793
Gregg A. Ostrander      7,486,805                 47,671

Incumbent  Class III directors with terms expiring  in  2000  are  Mo
Seigel  and  James P. Kelly. Incumbent Class I directors  with  terms
expiring  in  2001  are Marina Hahn, Stephen B.  Hughes  and  Leonard
Lieberman.

(b)  Appointment of independent auditors - The proposal to ratify the
appointment  of  Deloitte  & Touche LLP as  the  Company's  certified
public accountants for the fiscal year ending September 30, 1999  was
approved  by  a  vote  of 7,498,667 shares in  favor,  28,950  shares
against, and 6,862 shares abstaining.

ITEM 5.  OTHER INFORMATION

Stockholders who would like to submit proposals to be voted on at the
Company's  2000  annual  meeting must submit  the  proposals  to  the
Company  by certain deadline dates. If the stockholder would like  to
have  the  proposals included in the Company's proxy  statement,  the
proposals must be submitted by September 17, 1999. If the stockholder
does  not  want  their  proposals included  in  the  Company's  proxy
statement  but still wants to raise the proposals at the 2000  annual
meeting, the proposal must be submitted between November 5, 1999  and
December 1, 1999. Under SEC rules, proxies solicited by the Company's
management  will confer discretionary voting authority  on  proposals
that  are  not  received by December 1, 1999.  The  Company's  bylaws
require  that  specific information be provided to the Company  if  a
stockholder wants to submit proposals or nominate directors.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
                                  
(a)  Exhibits
     --------
Exhibit No.                       Description
-----------                       -----------   
 23.1           - Report   of   Deloitte  &  Touche  LLP   on   unaudited
                  consolidated financial statements
        

(b) Reports on Form 8-K
    -------------------
     There were no reports on Form 8-K for the quarter ended March
     31, 1999.

                                      PAGE 14


<PAGE>

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act  of
1934, the Registrant has duly caused this report to be signed on  its
behalf by the undersigned thereunto duly authorized.



                    CELESTIAL SEASONINGS, INC.
                    (Registrant)


     May 7, 1999    By: /s/ Darrell F. Askey
                        --------------------
                         Darrell F. Askey

                         Vice President - Finance and Chief Financial
                         Officer
                         (Principal Financial Officer)
                         
                                  PAGE 15
                         
                         
<PAGE>                         
                         
                         
                          INDEX TO EXHIBITS


The following exhibits are filed pursuant to Item 601 of Regulation S-K.

                                                  Sequentially
Exhibit No.               Description            Numbered Pages
-----------               -----------            --------------
 23.1       - Report of Deloitte & Touche LLP on        
              unaudited consolidated financial         
              statements                               17


                              PAGE 16