SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001.


[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ________________


                          Commission File No. 333-22997

                         SPECTRUM ORGANIC PRODUCTS, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its Charter)

          California                                           94-3076294
 ------------------------------                           --------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporationor organization)                           Identification Number)

                               133 Copeland Street
                           Petaluma, California 94952
                     --------------------------------------
                    (Address of principal executive offices)

                                  (707)778-8900
                            -------------------------
                          Registrant's telephone number

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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[ ]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common Stock, no par value,
45,560,354 shares as of August 1, 2001. Transitional Small Business Disclosure
Format: Yes [ ] No [X]


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PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------


                                  SPECTRUM ORGANIC PRODUCTS, INC.
                                          BALANCE SHEETS

                                              ASSETS
                                                                     (Unaudited)    December 31,
                                                                    June 30, 2001       2000
                                                                    ------------    ------------
Current Assets:
   <S>                                                              <C>             <C>
   Cash                                                             $      1,000    $        900
   Accounts receivable, net                                            3,416,400       2,971,700
   Inventories, net                                                    6,009,100       6,676,400
   Prepaid expenses and other current assets                              68,600          84,600
                                                                    ------------    ------------
     Total Current Assets                                              9,495,100       9,733,600

Property and Equipment, net                                            3,144,700       3,254,900

Other Assets:
   Goodwill, net                                                       2,548,400       9,721,100
   Other assets, net                                                     130,700         131,800
                                                                    ------------    ------------
Total Assets                                                        $ 15,318,900    $ 22,841,400
                                                                    ============    ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Bank overdraft                                                   $    921,200    $    539,000
   Line of credit                                                      4,347,600       5,432,200
   Accounts payable, trade                                             4,295,600       6,057,600
   Accrued expenses                                                      836,000         715,400
   Current maturities of notes payable, former stockholder               375,000         375,000
   Current maturities of notes payable and
     capitalized lease obligations                                       790,000       1,312,900
   Current maturities of notes payable, stockholders                     123,600         110,800
                                                                    ------------    ------------
     Total Current Liabilities                                        11,689,000      14,542,900

Notes payable, former stockholder, less current maturities               802,900         961,400
Notes payable and capitalized lease obligations, less
   current maturities                                                    299,200         149,900
Notes payable, stockholders, less current maturities                     273,800         337,200
                                                                    ------------    ------------
Total Liabilities                                                     13,064,900      15,991,400
                                                                    ------------    ------------

Commitments and Contingencies

Stockholders' Equity:
   Preferred stock, 5,000,000 shares authorized, no shares issued
     or outstanding                                                         --              --
   Common stock, without par value, 60,000,000 shares authorized,
     45,560,354 and 44,495,828 issued and outstanding at June 30,
     2001 and December 31, 2000, respectively                          8,847,700       8,616,200
   Additional paid-in capital                                            370,800         304,200
   Accumulated deficit                                                (6,964,500)     (2,070,400)
                                                                    ------------    ------------
Total Stockholders' Equity                                             2,254,000       6,850,000
                                                                    ------------    ------------
Total Liabilities and Stockholders' Equity                          $ 15,318,900    $ 22,841,400
                                                                    ============    ============


                            The accompanying notes are an integral part
                                    of the financial statements

                                                2
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                                          SPECTRUM ORGANIC PRODUCTS, INC.
                                             STATEMENTS OF OPERATIONS




                                                               (Unaudited)                    (Unaudited)
                                                           Three Months Ended              Six Months Ended
                                                       June 30,         June 30,        June 30,       June 30,
                                                         2001            2000            2001            2000
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
Gross Sales                                          $ 11,505,600    $ 12,141,000    $ 22,508,200    $ 23,565,800

Discounts and Allowances                                  874,700         760,300       1,665,300       1,461,000
                                                     ------------    ------------    ------------    ------------
Net Sales                                              10,630,900      11,380,700      20,842,900      22,104,800

Cost of Goods Sold                                      7,495,400       8,363,100      14,959,100      16,399,000
                                                     ------------    ------------    ------------    ------------
Gross Profit                                            3,135,500       3,017,600       5,883,800       5,705,800
                                                     ------------    ------------    ------------    ------------
Operating Expenses:

   Sales and Marketing                                  1,582,200       1,614,200       3,166,300       3,264,800

   General and Administrative                             882,600         847,400       1,726,400       1,779,100

   Amortization of Goodwill                               171,000         239,700         396,400         458,700

   Loss on Sale of Product Lines and Plant Closure      4,976,400         138,400       4,976,400         138,400
                                                     ------------    ------------    ------------    ------------
Total Operating Expenses                                7,612,200       2,839,700      10,265,500       5,641,000
                                                     ------------    ------------    ------------    ------------

Income (Loss) from Operations                          (4,476,700)        177,900      (4,381,700)         64,800
                                                     ------------    ------------    ------------    ------------
Other Income (Expense):

   Interest Expense                                      (245,100)       (391,800)       (526,400)       (700,900)
   Other                                                   (4,500)         12,600          14,000          61,500
                                                     ------------    ------------    ------------    ------------
Total Other Expenses                                     (249,600)       (379,200)       (512,400)       (639,400)
                                                     ------------    ------------    ------------    ------------
Loss Before Income Taxes                               (4,726,300)       (201,300)     (4,894,100)       (574,600)

Provision for Income Tax Expense                             --              --              --              --
                                                     ------------    ------------    ------------    ------------
Net Loss                                             $ (4,726,300)   $   (201,300)   $ (4,894,100)   $   (574,600)
                                                     ============    ============    ============    ============

Basic and Fully Diluted Loss Per Share               $      (0.10)   $      (0.00)   $      (0.11)   $      (0.01)
                                                     ============    ============    ============    ============

Weighted Average Shares Outstanding                    45,154,200      44,144,188      44,971,988      44,067,520
                                                     ============    ============    ============    ============


                                    The accompanying notes are an integral part
                                            of the financial statements

                                                        3
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                                          SPECTRUM ORGANIC PRODUCTS, INC.
                                             STATEMENTS OF CASH FLOWS

                                                                                              (Unaudited)
                                                                                           Six Months Ended
                                                                                    June 30, 2001   June 30, 2000
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>
Net Loss                                                                            $ (4,894,100)   $   (574,600)
  Adjustments to Reconcile Net Loss to Net Cash Used in Operating
    Activities:
         Provision for allowances against receivables                                    (70,500)        (20,700)
         Provision for reserves for inventory obsolescence                              (196,200)       (285,000)
         Depreciation and amortization                                                   206,000         287,800
         Amortization of goodwill                                                        396,400         458,700
         Loss on asset disposals and write-downs                                       4,976,400          88,400
         Loss on sale of fixed assets                                                     10,900            --
         Imputed interest on notes payable and conversion                                 24,000         105,500
         Imputed interest on stock warrants issued                                        38,700            --
         Increase in cash surrender value of life insurance                                 --           (10,200)
         Amortization of original issue discount on unsecured and
           subordinated notes payable                                                       --            55,200

  Changes in Assets and Liabilities:
         Accounts receivable                                                            (292,000)     (1,029,500)
         Inventories                                                                      35,400         651,500
         Prepaid expenses and other assets                                                28,300          23,900
         Accounts payable                                                             (1,684,900)          5,000
         Accrued expenses                                                                120,600        (346,400)
                                                                                    ------------    ------------
Net Cash Used In Operating Activities                                                 (1,301,000)       (590,400)
                                                                                    ------------    ------------
Cash Flows from Investing Activities:
  Purchase of property and equipment                                                    (189,400)       (196,800)
  Proceeds from sale of assets                                                             5,500          53,000
  Proceeds from sale of product lines and related inventories                          2,696,000            --
  Merger-related expenses charged to goodwill                                               --          (127,600)
  Transaction fees on sale of product lines                                             (139,400)           --
                                                                                    ------------    ------------
Net Cash Provided by (Used in) Investing Activities                                    2,372,700        (271,400)
                                                                                    ------------    ------------
Cash Flows from Financing Activities:
  Increase in checks drawn against future deposits                                       382,200         530,700
  Proceeds from lines of credit                                                       22,011,300      20,849,000
  Repayment of lines of credit                                                       (23,095,900)    (20,205,000)
  Repayment of notes payable, former stockholder                                        (171,900)       (237,500)
  Repayment of notes payable to stockholders                                             (50,500)       (107,400)
  Proceeds from notes payable                                                             50,000         252,100
  Repayment of notes payable                                                            (232,200)       (193,200)
  Repayment of capitalized lease obligations                                             (34,600)        (27,400)
  Restricted shares purchased by board members                                            70,000            --
  Warrants exercised                                                                        --               600
                                                                                    ------------    ------------
Net Cash Provided by (Used in) Financing Activities                                   (1,071,600)        861,900
                                                                                    ------------    ------------
Net Increase In Cash                                                                         100             100

Cash, beginning of the year                                                                  900           1,100
                                                                                    ------------    ------------
Cash, end of the period                                                             $      1,000    $      1,200
                                                                                    ============    ============

Supplemental Disclosure of Cash Flow Information:
  Cash paid for income taxes                                                        $        800    $      1,600
  Cash paid for interest                                                            $    477,500    $    584,600

Non-Cash Financing Activities:
 Conversion of notes payable to common stock                                        $    157,500            --


                                    The accompanying notes are an integral part
                                            of the financial statements

                                                        4
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<PAGE>


SPECTRUM ORGANIC PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS

1.   Basis of Presentation:

     The accompanying unaudited interim financial statements have been prepared
     in accordance with accounting principles generally accepted in the United
     States of America for interim financial information. They include all
     adjustments, which in the opinion of Management, are necessary in order to
     make the financial statements not misleading. Operating results for the
     three-month and six-month periods ended June 30, 2001 are not necessarily
     indicative of the results that may be expected for the entire year ending
     December 31, 2001. These financial statements have been prepared in
     accordance with the instructions to Form 10-Q and do not include certain
     disclosures required by generally accepted accounting principles.
     Accordingly, the statements should be read in conjunction with Spectrum
     Organic Products, Inc. financial statements and notes thereto included in
     the Company's Form 10-KSB for the year ended December 31, 2000.

     Certain reclassifications have been made to the prior year unaudited
     interim financial statements to be consistent with the presentation at June
     30, 2001. These reclassifications had no impact on net income or retained
     earnings.

2.   Business Combination:

     On October 6, 1999, Spectrum Naturals, Inc. ("SNI"), its affiliate Spectrum
     Commodities, Inc. ("SCI") and Organic Ingredients, Inc. ("OI"), all
     California corporations, were merged with and into Organic Food Products,
     Inc. ("OFPI"), also a California corporation (the "Merger"). Effective with
     the Merger, the newly combined entity changed its name to Spectrum Organic
     Products, Inc. Since former SNI stockholders hold a controlling interest in
     the Company after the Merger, the transaction was accounted for as a
     reverse acquisition, with SNI as accounting acquirer and OFPI and OI as
     accounting acquirees. Together, SNI and SCI prior to the Merger and the
     combined companies after the Merger are referred to as the "Company" or
     "SPOP".

3.   Sale of Product Lines:

     On June 11, 2001, the Company sold its tomato-based product lines to
     Acirca, Inc., an unrelated third party, in a transaction approved by
     unanimous vote of the Company's Board of Directors. Acirca has been, and
     may continue to be, a customer of the Company, purchasing organic
     ingredients from the Company. The assets sold included inventories,
     trademarks and goodwill associated with the Millina's Finest, Garden Valley
     Natural, Parrot and Frutti di Bosco brands of pasta sauces and salsas, as
     well as children's meals sold under the Grandma Millina's Kitchen Kids'
     Meals brand and certain private label pasta sauce and salsa products.

     The total consideration paid to the Company in connection with the sale was
     $3,128,100 in cash, which included $778,100 paid in consideration for
     saleable inventory sold to Acirca. Also included in the total amount of
     consideration paid to the Company was $350,000 deposited in an escrow
     account to be applied towards indemnity claims of Acirca and, to the extent
     not utilized for any indemnity claims of Acirca, released to the Company in
     two equal installments at the six month and one year anniversaries of the
     sale. Because of this contingency, the $350,000 in escrow was not recorded
     as part of the consideration received on the sale.

                                       5

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<CAPTION>


     Since the product lines sold comprised all of the remaining assets of OFPI,
     the remaining net goodwill associated with the reverse acquisition of OFPI
     in October 1999 of $6,776,200 has been written-off as part of the entry to
     record the sale. Accordingly, the Company has recorded a non-cash loss on
     the sale of the product lines of $4,976,400 in the month of June, which was
     computed as follows:

      <S>                                                                  <C>
       Total cash consideration                                              $3,128,100
       Less escrowed funds included above                                       350,000
                                                                             ----------
       Net cash proceeds from sale                                           $2,778,100

       Assets sold:
          Inventories                                                           778,100
          Label plates, molds and dies, net of accumulated amortization          10,500
          Goodwill, net of accumulated amortization                           6,776,200
       Transaction fees                                                         139,700
       Write-off of remaining inventories not purchased                          50,000
                                                                             ----------
       Net Loss on Sale of Product Lines                                     $4,976,400
                                                                             ==========

     Included in accounts receivable at June 30, 2001 was $82,100 of the cash
     consideration for saleable inventories, which was received on July 12,
     2001.

     The transaction fees represent investment banking, legal and accounting
     fees associated with the sale. The write-off of remaining inventories
     represents losses on close-out sales of dry cut pasta and canned tomatoes,
     which were products previously sold by the Company under the disposed brand
     names but not purchased by the buyer.

4.   Plant Closure:

     In May 2000, the Company committed to a plan to close its leased
     manufacturing facility in Morgan Hill, California. Production of the
     tomato-based product lines, which were sold as discussed in Note 3, was
     transferred to a third-party co-packer who also purchased certain
     manufacturing equipment from the Company. As a result, production at the
     Morgan Hill facility ceased on July 21, 2000. The facility currently
     remains under lease while the Company returns the facility to its condition
     on the date it was leased. Management is negotiating with the landlord to
     secure new tenants and anticipates being free of its obligations under the
     lease or of sub-leasing the facility by September 30, 2001. Rental payments
     for the six-month period ended June 30, 2001 for the Morgan Hill facility
     were $50,200. All rent through September 30, 2001 has been accrued and is
     included in accounts payable at June 30, 2001.

                                       6
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<PAGE>


5.   Inventories:

     Inventories consisted of the following:
                                                   June 30,       December 31,
                                                     2001             2000
                                                 ------------     ------------

      Raw materials                                $1,172,300      $1,130,300
      Finished goods                                5,206,100       6,111,600
                                                 ------------    ------------
      Total Inventories                             6,378,400       7,241,900

      Less: Provision for obsolete inventory         (369,300)       (565,500)
                                                 ------------    ------------
      Net Inventories                              $6,009,100      $6,676,400
                                                 ============    ============

     Included with the sale of product lines was $778,100 of saleable finished
     case goods and packaging material inventories which were sold at the
     Company's cost. Also recorded as part of the sale of product lines was a
     write-off for obsolete inventories of $50,000 to cover losses on closeout
     sales of dry cut pasta and canned tomatoes, which were products previously
     sold under the disposed brand names but not purchased by Acirca.

6.   Commitments and Contingencies:

     Litigation and Settlements
     --------------------------

     In February 1998, OFPI acquired the natural fruit juice and water bottling
     operations of Sunny Farms Corporation for cash and common stock. A portion
     of the common stock consideration was held in escrow, contingent upon
     earn-out calculations for the year following the acquisition. Subsequently,
     Sunny Farms sought voluntary relief pursuant to chapter 7 of the U.S.
     Bankruptcy Code in November 1998. In October 2000, attorneys for the
     bankruptcy trustee filed a complaint against the Company in the U.S.
     Bankruptcy Court for the Northern District of California, challenging the
     Company's earn-out calculations and requesting that a portion of the common
     stock held in escrow be released.

     The Company and the Sunny Farms bankruptcy trustee have reached an
     agreement in principle regarding the earn-out calculations and subsequent
     shares to be released from escrow, which is in the process of being
     executed by the parties involved. An estimated accrual of $100,000 for
     common shares to be released was included in accounts payable at June 30,
     2001.

     In November 1998, Global Natural Brands, Ltd. ("Global"), a company that
     had provided management consulting services for OFPI filed suit alleging
     unpaid wages and seeking money damages and injunctive relief. In April
     2000, a settlement was reached with this company (which is also a
     stockholder), and the case was dismissed. Under the terms of the settlement
     and release, SPOP paid Global a total cash consideration of $145,000, and
     issued 400,000 shares of SPOP stock, which were valued at the closing
     market price on the date of settlement. In addition, on July 11, 2001, SPOP
     issued to Global stock options to purchase 225,000 common shares at $2.25
     per share over an option term that expires on October 31, 2002. The
     estimated fair value of the options of $27,400 was included in accounts
     payable at June 30, 2001.

                                       7

<PAGE>


     In October 2000, the Company was notified by counsel for GFA Brands, Inc.
     that nutritional claims pertaining to Spectrum Naturals Organic Margarine
     were infringing upon two patents issued in the United States that pertain
     to particular fat compositions suitable for human ingestion. The patent
     holder exclusively licensed each of these patents to GFA Brands. Management
     believes that its product does not infringe upon either patent, and
     further, that the patents are unenforceable in any case. Management has
     engaged legal counsel that specialize in this area and received an opinion
     letter in February 2001 confirming that, in the opinion of counsel, the
     manufacture or sale of Spectrum Naturals Organic Margarine does not
     infringe upon the GFA patents, either literally or under the doctrine of
     equivalents. Management believes it has meritorious defenses and that a
     loss is not probable at this time, therefore, no provision for loss has
     been recorded at June 30, 2001.

     Liquidity
     ---------

     On June 11, 2001, the Company sold its tomato-based product lines to an
     unrelated third party in order to raise cash for working capital purposes.
     The sale generated cash consideration of $3,128,100, of which $350,000 was
     deposited into an escrow account and subject to indemnity claims of the
     buyer, if any, over the course of the one-year period ending June 11, 2002.
     The remaining $2,778,100 in immediately available cash was applied against
     the Company's outstanding line of credit and subsequently, was partially
     utilized to bring the Company's vendors current. At June 30, 2001 the
     Company had $1,217,300 in available borrowings under its line of credit.

     Despite the sale of the tomato-based product lines, as of June 30, 2001 the
     Company had negative working capital and was in technical default of
     certain financial loan covenants with its primary lender, Wells Fargo
     Business Credit ("WFBC"). As a result of the default, WFBC has assessed an
     additional 100 basis points to the interest rates charged under the
     revolving line of credit and the term debt. Management is currently in
     negotiations with WFBC to establish new financial covenants and believes
     that upon completion of those negotiations, the Company will be back in
     compliance.

     During the second quarter the Company completed the process of curing the
     default under $420,000 of subordinated promissory notes issued via a
     private placement to close the Merger in 1999. The Company had offered the
     twelve private placement note holders the option of converting their notes
     to equity at a discounted price to the market value of SPOP stock, or a
     three year payment schedule calling for interest only during 2001, with
     principal and interest thereafter, plus common stock purchase warrants
     equal to 10% of the outstanding principal at the closing bid price of SPOP
     stock at each quarter-end until the note is retired. As of June 30, 2001,
     four note holders representing $157,500 of the outstanding principal had
     elected the conversion to equity, seven note holders representing $236,300
     of the outstanding principal had elected the payment schedule with common
     stock purchase warrants, and one note holder representing $26,200 of the
     outstanding principal was paid off. Accordingly, at June 30, 2001, the
     Company has reclassified $157,500 of the notes from current liabilities to
     common stock and $209,200, representing the non-current portion of the
     remaining outstanding principal of $236,300, from current liabilities to
     long-term notes payable.

                                       8

<PAGE>


     For those note holders who elected the conversion to common stock, non-cash
     interest expense of $10,700 was recorded during the six months ended June
     30, 2001 for the beneficial pricing effect upon conversion. For those note
     holders who elected the payment schedule with common stock purchase
     warrants, non-cash interest expense of $38,700 was recorded during the six
     months ended June 30, 2001 for the value of the warrants.

     The Company continues to be highly leveraged and is currently seeking
     additional working capital from various sources such as the sale of certain
     assets or the issuance of common stock. However, Management believes that
     the proceeds received from the sale of the tomato-based product lines
     should provide adequate funds to meet the Company's estimated cash
     requirements for the foreseeable future.

     The majority shareholder, who holds approximately 69% of the outstanding
     common stock of the Company, has represented that he has the intent and
     ability to support the operations of the Company with additional funding
     for the next fiscal year, if necessary.

7.   New Applicable Accounting Pronouncements:

     In May 2000, the EITF reached a consensus on Issue 00-14, "Accounting for
     Certain Sales Incentives." This issue addresses the recognition,
     measurement, and income statement classification for sales incentives
     offered voluntarily by a vendor without charge to customers that can be
     used in, or are exercisable by a customer as a result of a single exchange
     transaction.

     In April 2001, the EITF reached a consensus on Issue 00-25, "Vendor Income
     Statement Characterization of Consideration to a Purchaser of the Vendor's
     Products or Services." This issue addresses the recognition, measurement
     and income statement classification of consideration, other than that
     directly addressed by Issue 00-14, from a vendor to a retailer or
     wholesaler. The Company is currently analyzing Issues 00-14 and 00-25.
     However, based on Management's current understanding and interpretation,
     neither is expected to have a material impact on the Company's financial
     position or results of operations, except that certain reclassifications
     may occur. The conclusions reached in Issue 00-25 and Issue 00-14 (amended
     by Issue 00-25) are effective for fiscal quarters beginning after December
     15, 2001.

     In June 2001, the Financial Accounting Standards Board finalized FASB
     Statements No. 141, "Business Combinations" ("SFAS 141"), and No. 142,
     "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141 requires the
     use of the purchase method of accounting and prohibits the use of the
     pooling-of-interests method of accounting for business combinations
     initiated after June 30, 2001. SFAS 141 also requires that the Company
     recognize acquired intangible assets apart from goodwill if the acquired
     intangible assets meet certain criteria. SFAS 141 applies to all business
     combinations initiated after June 30, 2001 and for purchase business
     combinations completed on or after July 1, 2001. It also requires, upon
     adoption of SFAS 142, that the Company reclassify the carrying amounts of
     intangible assets and goodwill based on the criteria in SFAS 141.

                                       9

<PAGE>


     SFAS 142 requires, among other things, that companies no longer amortize
     goodwill, but instead test goodwill for impairment at least annually. In
     addition, SFAS 142 requires that the Company identify reporting units for
     the purposes of assessing potential future impairments of goodwill,
     reassess the useful lives of other existing recognized intangible assets,
     and cease amortization of intangible assets with an indefinite useful life.
     An intangible asset with an indefinite useful life should be tested for
     impairment in accordance with the guidance in SFAS 142. SFAS 142 is
     required to be applied in fiscal years beginning after December 15, 2001 to
     all goodwill and other intangible assets recognized at that date,
     regardless of when those assets were initially recognized. SFAS 142
     requires the Company to complete a transitional goodwill impairment test
     six months from the date of adoption. The Company is also required to
     reassess the useful lives of other intangible assets within the first
     interim quarter after adoption of SFAS 142.

     The Company's previous business combination (the merger of OFPI, OI, SNI
     and SCI as discussed in Note 2 to the financial statements) was accounted
     for using the purchase method. As of June 30, 2001 the net carrying amount
     of goodwill remaining after the sale of the tomato-based product lines, as
     discussed in Note 3 to the financial statements, is $2,548,400 and other
     intangible assets is $61,700. Amortization expense during the six-month
     period ended June 30, 2001 was $411,300. At present, the Company is
     currently assessing but has not yet determined the impact the adoption of
     SFAS 141 and SFAS 142 will have on its financial position and results of
     operations.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
-------------------------------------------------------------------------------

The following discussion should be read in conjunction with the financial
statements and related notes and other information included in this report. The
financial results reported herein are not necessarily indicative of the
financial results that may be achieved by the Company in any future period.

Investors should carefully consider the following information as well as other
information contained in this report. Information included in this report
contains "forward-looking statements" which can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "should" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. No assurance can be given that the
future results covered by the forward-looking statements will be achieved. The
following matters constitute cautionary statements identifying important factors
with respect to such forward-looking statements, including certain risks and
uncertainties that could cause actual results to vary materially from the future
results covered in such forward-looking statements. Other factors could also
cause actual results to vary materially from the future results covered in such
forward-looking statements.

The Company's operating results could vary from period to period as a result of
a number of factors. These factors include, but are not limited to, the
purchasing patterns of significant customers, the timing of new product
introductions by the Company and its competitors, the amount of slotting fees,
new product development and advertising expenses incurred by the Company,
variations in sales by distribution channel, fluctuations in market prices of
raw materials, competitive pricing policies, and situations that the Company
cannot foresee. These factors could cause the Company's performance to differ
from investor expectations, resulting in volatility in the price of the common
stock.

                                       10

<PAGE>


Introduction:

On October 6, 1999, Spectrum Naturals, Inc. ("SNI") and its affiliate, Spectrum
Commodities, Inc. ("SCI"), and Organic Ingredients, Inc. ("OI"), all California
corporations were merged with and into Organic Food Products, Inc. ("OFPI" or
the "Registrant"), (collectively "SPOP" or the "Company"), pursuant to the
Agreement and Plan of Merger and Reorganization, dated May 14, 1999 (the
"Merger"). Since former SNI stockholders hold a controlling interest in the
Company after the Merger, the transaction was accounted for as a reverse
acquisition, with SNI as accounting acquirer and OFPI and OI as accounting
acquirees. Upon the effective date of the Merger, SNI, SCI and OI ceased to
exist, the Registrant continued as the surviving legal entity, and immediately
changed its name to Spectrum Organic Products, Inc.

--------------------------------------------------------------------------------
Results of Operations for the Three-Month Periods Ending June 30, 2001 and
June 30, 2000
--------------------------------------------------------------------------------

Summary of Results:

Management believes that Earnings Before Interest, Taxes, Depreciation,
Amortization and Losses on Asset Disposals ("EBITDA as adjusted") is an
important measure of the Company's operating performance. For the three months
ended June 30, 2001, EBITDA as adjusted was $776,900 compared to $634,900 for
the prior year, an increase of $142,000 or 22.4%. The improved performance in
2001 was primarily attributable to improved gross margins and reduced marketing
expenditures, partially offset by slightly higher general and administrative
expenses.

Revenues:

SPOP's gross sales for the three months ended June 30, 2001 were $11,505,600
compared to $12,141,000 for 2000, a decrease of $635,400, or 5.2% versus 2000.
The decrease in 2001 was entirely due to lower sales of industrial organic
ingredients (particularly citrus products) and the three weeks of lost sales
associated with the disposed product lines, partially offset by higher sales of
branded culinary products and nutritional supplements. Within the branded
culinary products, sales were significantly higher than prior year in packaged
oil (+10%), packaged mayonnaise (+13%) and dressings (+32%). Nutritional
supplement sales increased 18% versus the prior year.

During the three months ended June 30, 2001 and 2000, gross sales by source were
as follows:

                                                  2001                2000
                                                  ----                ----

Consumer Brands - Culinary Products           $  5,234,900        $  4,931,300
Consumer Brands - Nutritional Supplements        2,263,300           1,926,700
Industrial Ingredients                           3,240,300           4,559,100
Private Label Products/Other                       767,100             723,900
                                              ------------        ------------
  Total Gross Sales                           $ 11,505,600        $ 12,141,000
                                              ============        ============

During the three months ended June 30, 2001 and 2000, gross sales for the
disposed product lines (which were included above primarily in consumer
brands-culinary products) were $906,200 and $1,209,700, respectively.

                                       11

<PAGE>


Discounts and allowances as a percent of gross sales increased to 7.6% of gross
sales for 2001 compared to 6.3% in 2000. The increase was primarily the result
of increased promotion levels on nutritional supplements in both liquid and
capsule forms, as well as pasta sauces, packaged oils and packaged mayonnaise on
the culinary side.

Cost of Goods Sold:

The Company's cost of goods sold decreased as a percent of gross sales for the
three-month period ended June 30, 2001 to 65.2% compared to 68.9% for the same
period in 2000. The decrease was due primarily to the lower costs associated
with the tomato-based products formerly produced at the Morgan Hill facility. On
July 21, 2000, SPOP ceased manufacturing the pasta sauce and salsa product lines
at its leased Morgan Hill, California facility. The products are now produced by
a third-party co-packer, which has enabled the Company to close the Morgan Hill
facility. As a result of this change, the Company's cost of goods sold for the
tomato-based products has been sharply reduced, since the Morgan Hill facility
was inefficient and under-utilized.

Gross Profit:

Gross profit for the three months ended June 30, 2001 was $3,135,500 versus
$3,017,600 for 2000, an increase of $117,900 or 3.9%. Gross profit as a
percentage of gross sales was 27.3% for 2001 versus 24.9% for the three months
ended June 30, 2000, primarily due to improved margins on the tomato-based
product lines. Also contributing to the higher gross margin in 2001 was an
improved sales mix, which featured lower industrial ingredient sales and higher
sales of the Company's consumer branded culinary and nutritional supplement
products.

Sales and Marketing Expenses:

The Company's sales and marketing expenses for the three months ended June 30,
2001 were $1,582,200 or 13.8% of gross sales, versus $1,614,200 or 13.3% of
gross sales for 2000. The decrease in spending of $32,000 in 2001 was primarily
attributable to lower spending on trade shows.

General and Administrative Expenses:

The Company's general and administrative expenses for the three months ended
June 30, 2001 were $882,600 or 7.7% of gross sales, versus $847,400 or 7.0% of
gross sales for 2000. The increase in spending of $35,200 was primarily
attributable to increased insurance and utility costs, partially offset by lower
professional fees.

Amortization of Goodwill:

The Company recorded goodwill of $10,848,200 in connection with the Merger.
Amortization expense for the three months ended June 30, 2001 was $171,000,
versus $239,700 of amortization expense for 2000. Since the sale of the
tomato-based product lines comprised all of the remaining assets of OFPI, the
remaining unamortized goodwill associated with the reverse acquisition of OFPI
in October 1999 of $6,776,200 has been written-off in June as part of the sale.
The remaining goodwill associated with the acquisition of OI continues to be
amortized over a twelve-year life.

                                       12

<PAGE>


Loss on Sale of Product Lines and Plant Closure:

Since the product lines sold comprised all of the remaining assets of OFPI, the
remaining net goodwill associated with the reverse acquisition of OFPI in
October 1999 of $6,776,200 has been written-off as part of the entry to record
the sale. Accordingly, the Company has recorded a non-cash loss on the sale of
the product lines of $4,976,400 in the month of June 2001. During the prior
year, the Company recorded a provision of $138,400 for anticipated losses on the
sale or disposal of production equipment and leasehold improvements at the
Company's leased manufacturing facility in Morgan Hill, California where
production of the tomato-based product lines occurred until July 21, 2000.

Interest Expense:

The Company's interest expense for the three months ended June 30, 2001 was
$245,100 versus $391,800 for 2000. The reduction of $146,700 or 37.4% was
primarily attributable to significant reductions in the prime rate during 2001
and lower non-cash interest expense associated with the private placement notes.

Net Loss:

The Company reported a net loss of $4,726,300 and $201,300 for the three-month
periods ended June 30, 2001 and June 30, 2000, respectively. Excluding the loss
on the disposed product lines and plant closure, the Company reported net income
of $250,100 versus a net loss of $62,900 for the prior year. The improvement in
2001 was primarily due to improved gross margins, reduced interest expense and
lower operating expenses.

--------------------------------------------------------------------------------
Results of Operations for the Six-Month Periods Ending June 30, 2001 and
June 30, 2000
--------------------------------------------------------------------------------

Summary of Results:

Management believes that Earnings Before Interest, Taxes, Depreciation,
Amortization and Losses on Asset Disposals ("EBITDA as adjusted") is an
important measure of the Company's operating performance. For the six months
ended June 30, 2001, EBITDA as adjusted was $1,197,100 compared to $949,700 for
the prior year, an increase of $247,400 or 26.1%. The improved performance in
2001 was primarily attributable to improved gross margins and reduced operating
expenses.

Revenues:

SPOP's gross sales for the six months ended June 30, 2001 were $22,508,200
compared to $23,565,800 for 2000, a decrease of $1,057,600, or 4.5% versus 2000.
The decrease in 2001 was entirely due to lower sales of industrial organic
ingredients (particularly citrus products and bulk nutritional oils) and the
three weeks of lost sales associated with the disposed product lines, partially
offset by higher sales of branded culinary products and nutritional supplements.
Within the branded culinary products, sales were significantly higher than prior
year in packaged oil (+12%), packaged mayonnaise (+11%) and individually quick
frozen fruits and vegetables (a new product category this year). Branded
nutritional supplement sales increased 14% versus the prior year.

                                       13

<PAGE>


During the six months ended June 30, 2001 and 2000, gross sales by source were
as follows:

                                                  2001                  2000
                                                  ----                  ----

Consumer Brands - Culinary Products           $ 10,228,100          $  9,857,000
Consumer Brands - Nutritional Supplements        4,497,800             3,949,100
Industrial Ingredients                           6,327,100             8,731,600
Private Label Products/Other                     1,455,200             1,028,100
                                              ------------          ------------
  Total Gross Sales                           $ 22,508,200          $ 23,565,800
                                              ============          ============

During the six months ended June 30, 2001 and 2000, gross sales for the disposed
product lines (which were included above primarily in consumer
brands-culinary products) were $2,344,300 and $2,965,400, respectively.

Discounts and allowances as a percent of gross sales increased to 7.4% of gross
sales for 2001 compared to 6.2% in 2000. The increase was primarily the result
of increased promotion levels on nutritional supplements in both liquid and
capsule forms, as well as pasta sauces and packaged oils on the culinary side.

Cost of Goods Sold:

The Company's cost of goods sold decreased as a percent of gross sales for the
six-month period ended June 30, 2001 to 66.5% compared to 69.6% for the same
period in 2000. The decrease was due primarily to the lower costs associated
with the tomato-based products formerly produced at the Morgan Hill facility and
the non-profitable closeout sales of the Sunny Farms beverage products in the
prior year. On July 21, 2000, SPOP ceased manufacturing the pasta sauce and
salsa product lines at its leased Morgan Hill, California facility. The products
are now produced by a third-party co-packer, which has enabled the Company to
close the Morgan Hill facility. As a result of this change, the Company's cost
of goods sold for the tomato-based products has been sharply reduced, since the
Morgan Hill facility was inefficient and under-utilized.

Gross Profit:

Gross profit for the six months ended June 30, 2001 was $5,883,800 versus
$5,705,800 for 2000, an increase of $178,000 or 3.1%. Gross profit as a
percentage of gross sales was 26.1% for 2001 versus 24.2% for the six months
ended June 30, 2000, primarily due to the improved margins on the tomato-based
product lines and the inclusion of the non-profitable closeout sales of the
Sunny Farms beverage products in the prior year. Also contributing to the higher
gross margin in 2001 was an improved sales mix, which featured lower industrial
ingredient sales and higher sales of the Company's consumer branded culinary and
nutritional supplement products.

Sales and Marketing Expenses:

The Company's sales and marketing expenses for the six months ended June 30,
2001 were $3,166,300 or 14.1% of gross sales, versus $3,264,800 or 13.9% of
gross sales for 2000. The decrease in spending of $98,500 was primarily
attributable to reduced spending on trade shows, consulting fees and broker
commissions, partially offset by increased advertising and slotting fees.

                                       14

<PAGE>


General and Administrative Expenses:

The Company's general and administrative expenses for the six months ended June
30, 2001 were $1,726,400 or 7.7% of gross sales, versus $1,779,100 or 7.6% of
gross sales for 2000. The decrease in spending of $52,700 was primarily
attributable to lower banking, accounting and legal fees, partially offset by
increased insurance and utility costs.

Amortization of Goodwill:

The Company recorded goodwill of $10,848,200 in connection with the Merger.
Amortization expense for the six months ended June 30, 2001 was $396,400, versus
$458,700 of amortization expense for 2000. Since the sale of the tomato-based
product lines comprised all of the remaining assets of OFPI, the remaining
unamortized goodwill associated with the reverse acquisition of OFPI in October
1999 of $6,776,200 has been written-off in June as part of the sale. The
remaining goodwill associated with the acquisition of OI continues to be
amortized over a twelve-year life.

Loss on Sale of Product Lines and Plant Closure:

Since the product lines sold comprised all of the remaining assets of OFPI, the
remaining net goodwill associated with the reverse acquisition of OFPI in
October 1999 of $6,776,200 has been written-off as part of the entry to record
the sale. Accordingly, the Company has recorded a non-cash loss on the sale of
the product lines of $4,976,400 in the month of June 2001. During the prior
year, the Company recorded a provision of $138,400 for anticipated losses on the
sale or disposal of production equipment and leasehold improvements at the
Company's leased manufacturing facility in Morgan Hill, California where
production of the tomato-based product lines occurred until July 21, 2000.

Interest Expense:

The Company's interest expense for the six months ended June 30, 2001 was
$526,400 versus $700,900 for 2000. The reduction of $174,500 or 24.9% was
primarily attributable to significant reductions in the prime rate during 2001
and lower non-cash interest expense associated with the private placement notes.

Net Loss:

The Company reported a net loss of $4,894,100 and $574,600 for the six-month
periods ended June 30, 2001 and June 30, 2000, respectively. Excluding the loss
on the disposed product lines and plant closure, the Company reported net income
of $82,300 versus a net loss of $436,200 for the prior year. The improvement in
2001 was primarily due to improved gross margins, reduced interest expense and
lower operating expenses.

Seasonality:

Historically, the Company has experienced little seasonal fluctuation in
revenues. In relation to product purchasing, the Company will seasonally
contract for certain products for the entire year at harvest time, or at
planting time, to secure raw materials throughout the year. These purchases take
place annually from early spring to mid-summer and are effected to reduce the
risk of price swings due to demand fluctuations. These annual purchases can
create overages and shortages in inventory.

                                       15

<PAGE>


Liquidity and Capital Resources:

The Company maintains a credit facility totaling $11,717,000 with Wells Fargo
Business Credit ("WFBC"), consisting of term debt and a revolving line of
credit, that is secured by substantially all assets of the Company and bears
interest at prime plus 1% to 1+1/4%. Advances under the revolving line of credit
are limited to a borrowing base consisting of certain accounts receivable and
inventory. Also included in the facility are two term notes requiring payment
over 60 months. Due to operating losses following the Merger, the Company is in
default of certain financial covenants that were based on financial projections
made at the time the facility was put in place. As a result of the default, WFBC
began assessing an additional 100 basis points to the interest rates charged for
the revolving line of credit and the two term notes as of July 17, 2000. Due to
the default status, the Company has classified the entire balance due under the
two term notes as a current liability. Management is currently in negotiations
to reset the financial covenants to more accurately match the Company's
financial condition and future projections and expects to return to an
in-compliance status in the near future.

At June 30, 2001 the Company had $1,217,300 in available borrowing under its
line of credit versus none at December 31, 2000. The Company's bank overdraft as
of June 30, 2001 was $921,200 compared to $539,000 at December 31, 2000. During
the first six months of 2001, the Company used $1,301,000 in cash from operating
activities, compared to using $590,400 in cash in 2000. The additional cash used
was primarily due to reductions in trade payables, partially offset by
reductions in inventory levels. Cash provided by investing activities was
$2,372,700 in 2001 compared to cash used of $271,400 in 2000, which primarily
reflected the proceeds from the sale of the tomato-based product lines. Cash
used in financing activities was $1,071,600 in 2001 compared to cash provided of
$861,900 in 2000. The increase in funds used in financing activities during 2001
primarily reflected higher payments against the revolving line of credit using
the proceeds from the sale of the tomato-based product lines.

During the second quarter the Company completed the process of curing the
default under $420,000 of subordinated promissory notes issued via a private
placement to close the Merger in 1999. The Company had offered the twelve
private placement note holders the option of converting their notes to equity at
a discounted price to the market value of SPOP stock, or a three year payment
schedule calling for interest only during 2001, with principal and interest
thereafter, plus common stock purchase warrants equal to 10% of the outstanding
principal at the closing bid price of SPOP stock at each quarter-end until the
note is retired. As of June 30, 2001, four note holders representing $157,500 of
the outstanding principal had elected the conversion to equity, seven note
holders representing $236,300 of the outstanding principal had elected the
payment schedule with common stock purchase warrants, and one note holder
representing $26,200 of the outstanding principal was paid off. Accordingly, at
June 30, 2001, the Company has reclassified $157,500 of the notes from current
liabilities to common stock and $209,200, representing the non-current portion
of the remaining outstanding principle of $236,300, from current liabilities to
long-term notes payable.

For those note holders who elected the conversion to common stock, non-cash
interest expense of $10,700 was recorded during the six months ended June 30,
2001 for the beneficial pricing effect upon conversion. For those note holders
who elected the payment schedule with common stock purchase warrants, non-cash
interest expense of $38,700 was recorded during the first half of the year for
the value of the warrants.

                                       16

<PAGE>


The Company is highly leveraged and is currently seeking additional working
capital from various sources such as the sale of certain assets and the issuance
of common stock. However, Management believes that the proceeds received from
the sale of the tomato-based product lines should provide adequate funds to meet
the Company's estimated cash requirements for the foreseeable future. Moreover,
the majority shareholder has indicated that he has the intent and ability to
support the operations of the Company with additional funding for the next
fiscal year, if needed.

The Company's future results of operations and the other forward-looking
statements contained in this report, in particular any statements concerning
plant efficiencies, capital spending, research and development, competition,
marketing and manufacturing operations and other information provided herein
involve a number of risks and uncertainties. In addition to the factors
discussed above, other factors that could cause actual results to differ
materially are general business conditions and the general economy, competitors'
pricing and marketing efforts, availability of third-party materials at
reasonable prices, risk of nonpayment of accounts receivable, risk of inventory
obsolescence due to shifts in market demand, timing of product introductions,
and litigation involving product liabilities and consumer issues.

New Applicable Accounting Pronouncements:

In May 2000, the EITF reached a consensus on Issue 00-14, "Accounting for
Certain Sales Incentives." This issue addresses the recognition, measurement,
and income statement classification for sales incentives offered voluntarily by
a vendor without charge to customers that can be used in, or are exercisable by
a customer as a result of a single exchange transaction. The Company is
currently analyzing Issue 00-14. However, based on Management's current
understanding and interpretation, Issue 00-14 is not expected to have a material
impact on the Company's financial position or results of operations, except that
certain reclassifications may occur.

In April 2001, the EITF reached a consensus on Issue 00-25, "Vendor Income
Statement Characterization of Consideration to a Purchaser of the Vendor's
Products or Services." This issue addresses the recognition, measurement and
income statement classification of consideration, other than that directly
addressed by Issue 00-14, from a vendor to a retailer or wholesaler. The Company
is currently analyzing Issue 00-25. However, based on Management's current
understanding and interpretation, Issue 00-25 is not expected to have a material
impact on the Company's financial position or results of operations, except that
certain reclassifications may occur. The conclusions reached in Issue 00-25 and
Issue 00-14 (amended by Issue 00-25) are effective for fiscal quarters beginning
after December 15, 2001.

In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, "Business Combinations" ("SFAS 141"), and No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of

                                       17

<PAGE>
<TABLE>
<CAPTION>


accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142, that the Company reclassify the carrying
amounts of intangible assets and goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142.

The Company's previous business combination (the merger of OFPI, OI, SNI and SCI
as discussed in Note 2 to the financial statements) was accounted for using the
purchase method. As of June 30, 2001 the net carrying amount of goodwill
remaining after the sale of the tomato-based product lines, as discussed in Note
3 to the financial statements, is $2,548,400 and other intangible assets is
$61,700. Amortization expense during the six-month period ended June 30, 2001
was $411,300. At present, the Company is currently assessing but has not yet
determined the impact the adoption of SFAS 141 and SFAS 142 will have on its
financial position and results of operations.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------------------------------------------------------------------

The Company does not hold market risk sensitive trading instruments, nor does it
use financial instruments for trading purposes. All sales, operating items and
balance sheet data are denominated in U.S. dollars, therefore, the Company has
no foreign currency exchange rate risk.

Certain Company debt items are sensitive to changes in interest rates. The
following table summarizes principal cash flows and related weighted average
interest rates by expected maturity date for long-term debt ($ thousands):


                                                        Expected Maturity Date
                        Outstanding                    (Years Ended December 31)
                        June 30, 2001   2001       2002       2003       2004       2005       2006+
                        -------------   ----       ----       ----       ----       ----       -----
Long Term Debt:
<S>                        <C>          <C>        <C>        <C>        <C>         <C>       <C>
Fixed Rate                 $1,811.6     $204.6     $597.2     $586.7     $139.5      $27.6     $256.0
  Avg. Int. Rate               11.1%      10.9%      11.3%      11.3%      11.1%      10.0%      10.8%
Variable Rate                $664.5     $242.2     $189.6     $168.3      $55.2       $9.2        --
  Avg. Int. Rate               11.1%      10.9%      10.4%       9.9%       9.4%       9.0%       --

                                                  18
</TABLE>
<PAGE>


Due to the technical default status with the Company's primary lender, the
variable rate debt items in the table above have been classified as current
liabilities at June 30, 2001.

Throughout the course of its fiscal year, the Company utilizes a variable
interest rate line of credit at various borrowing levels. For the six months
ended June 30, 2001, the average outstanding balance under the line of credit
was approximately $5,907,700, with a weighted average interest rate of 10.1%.
The line of credit agreement calls for the interest rate to float at the prime
rate plus 100 basis points. Due to the technical default status, the interest
rate is currently set to float at the prime rate plus 200 basis points.

In the ordinary course of its business, the Company enters into commitments to
purchase raw materials over a period of time, generally six months to one year,
at contracted prices. At June 30, 2001, these future commitments were not at
prices in excess of current market, or in quantities in excess of normal
requirements. The Company does not utilize derivative contracts either to hedge
existing risks or for speculative purposes.



PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

In February 1998, OFPI acquired the natural fruit juice and water bottling
operations of Sunny Farms Corporation for cash and common stock. A portion of
the common stock consideration was held in escrow, contingent upon earn-out
calculations for the year following the acquisition. Subsequently, Sunny Farms
sought voluntary relief pursuant to chapter 7 of the U.S. Bankruptcy Code in
November 1998. In October 2000, attorneys for the bankruptcy trustee filed a
complaint against the Company in the U.S. Bankruptcy Court for the Northern
District of California, challenging the Company's earn-out calculations and
requesting that a portion of the common stock held in escrow be released.

The Company and the Sunny Farms bankruptcy trustee have reached an agreement in
principle regarding the earn-out calculations and subsequent shares to be
released from escrow, which is in the process of being executed by the parties
involved. An estimated accrual of $100,000 for common shares to be released was
included in accounts payable at June 30, 2001.

In November 1998, Global Natural Brands, Ltd. ("Global") and its four principals
filed a lawsuit against OFPI (the former Registrant) and its four principals,
alleging unpaid wages and seeking money damages and injunctive relief. Global
had provided managerial services to OFPI from April 1998 to October 1998, when
OFPI terminated its services. In May 1999, OFPI and its principals
cross-complained against Global and its principals, seeking damage for breach of
contract, breach of fiduciary duty, fraud, negligence and a declaratory relief
for indemnity and contribution, plus punitive damages.

SPOP assumed the litigation in connection with the Merger and reached a
settlement and release with Global in April 2000, and the case was dismissed.
Under the terms of the settlement and release, SPOP paid Global a total cash
consideration of $145,000, and issued 400,000 shares of SPOP stock, which were
valued at the closing market price on the date of settlement. In addition, on
July 11, 2001 SPOP issued to Global stock options to purchase 225,000 common

                                       19

<PAGE>


shares at $2.25 per share over an option term that expires on October 31, 2002.
The estimated fair value of the options of $27,400 was included in accounts
payable at June 30, 2001.

In October 2000, the Company was notified by counsel for GFA Brands, Inc. that
nutritional claims pertaining to Spectrum Naturals Organic Margarine were
infringing upon two patents issued in the United States that pertain to
particular fat compositions suitable for human ingestion. The patent holder
exclusively licensed each of these patents to GFA Brands. Management believes
that its product does not infringe upon either patent, and further, that the
patents are unenforceable in any case. Management has engaged legal counsel that
specialize in this area and received an opinion letter in February 2001
confirming that, in the opinion of counsel, the manufacture or sale of Spectrum
Naturals Organic Margarine does not infringe upon the GFA patents, either
literally or under the doctrine of equivalents. Management believes it has
meritorious defenses and that a loss is not probable at this time, therefore, no
provision for loss has been recorded at June 30, 2001.


Item 2.  Changes in Securities and Use of Proceeds
--------------------------------------------------

During the six months ended June 30, 2001, the Company issued unregistered no
par value restricted shares of its common stock as follows:

                                                                        Cash and
                                                  Date         Shares   Non-Cash
                                                 Issued        Issued   Proceeds
                                                 ------        ------   --------

Shares issued to Thomas B. Simone, a  non-
  executive Director of the Company, under
  a private sale (a)                           Feb 14, 2001   160,000   $ 50,000

Shares issued to Charles A. Lynch and
  Phillip L. Moore, both non-executive
  Directors of the Company, in lieu of
  cash compensation for Board fees earned
  during CY 2000 (b)                           Feb 15, 2001     64,000    20,000

Shares issued to four note holders under
  the private placement conversion offer
  to clear the default under the notes (c)        Various      630,000   157,500

Default common stock purchase warrants
  exercised by the note holders under the
  private placement completed in October
  1999 (d)                                        Various      195,900     2,000
                                                             ---------  --------
Total Unregistered Restricted Common Shares Issued           1,049,900  $229,500
                                                             =========  ========

(a)  These shares were issued under a transaction approved by the Company's
     disinterested members of the Board of Directors. The shares were issued at
     $.3125 per share, the closing price of the Company's common stock as quoted
     on the NASDAQ OTC Bulletin Board System on the date the Board approved the
     transaction. In addition to the shares issued, the Company granted common
     stock purchase warrants to Mr. Simone for 160,000 shares at the same price,
     which expire five years from the date granted. The Company applied the
     proceeds received from Mr. Simone toward the expansion of its proprietary
     SpectraVac(TM) technology.

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<PAGE>


(b)  These shares were also issued in a transaction approved by the Company's
     disinterested Board members. The shares were issued at $.3125 per share,
     the closing price of the Company's common stock as quoted on the NASDAQ OTC
     Bulletin Board System on the date the Board approved the transaction. The
     shares were issued in lieu of cash compensation for Board fees due to Mr.
     Lynch and Mr. Moore for CY 2000 in the amount of $10,000 each.

(c)  During the six months ended June 30, 2001, the Company completed the
     process of curing the default under the private placement notes by offering
     the note holders the option of converting their notes to restricted common
     stock at a price of $.25 per share, or a three-year payment schedule
     calling for interest only during 2001, with principal and interest
     thereafter, plus common stock purchase warrants retroactive to October 1,
     2000, equal to 10% of the outstanding principal at the closing bid price of
     SPOP stock at each quarter-end until the note is retired. On February 28,
     2001, two note holders elected the conversion option and the Company issued
     210,000 shares of restricted common stock in exchange for cancellation of
     both notes in the amount of $26,250 each. On June 28, 2001, two additional
     note holders elected the conversion option and the Company issued 420,000
     shares of restricted common stock in exchange for cancellation of both
     notes in the amount of $52,500 each.

(d)  During the six months ended June 30, 2001, the remaining outstanding common
     stock purchase warrants issued to the private placement note holders as a
     result of the default were exercised at a penny per share.

All shares were issued under Regulation D of the Securities Act of 1933 (the
"Act"), with resale of such shares permitted only pursuant to Rule 144 of the
Act. All certificates representing the unregistered shares were endorsed with
restrictive legends identifying them as unregistered under the Act.

The Company has not in the past nor does it intend to pay cash dividends on its
common stock in the future. The Company intends to retain earnings, if any, for
use in the operation and expansion of its business.


Item 3.  Defaults Upon Senior Securities
----------------------------------------

As of December 31, 1999 the Company was in technical default of certain
financial covenants specified in its credit facility with its major lender,
Wells Fargo Business Credit ("WFBC"). The facility consists of two term notes
and a revolving line of credit that is secured by substantially all assets of
the Company. The default occurred as a result of operating losses following the
Merger which were in excess of the financial projections made by the Company at
the time the credit facility was put in place. As a result of the default, WFBC
began assessing an additional 100 basis points to the interest rates charged
under the credit facility as of July 17, 2000. Due to the technical default
status, the Company has classified the entire balance due under the two term
notes as a current liability as of June 30, 2001.

There has been no default in the payment of any principal or interest
installments, and the Company is in compliance with all other aspects of the
credit facility. Management is currently in negotiation with WFBC to reset the

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<PAGE>


financial covenants to more accurately match the Company's current financial
position and future projections, and anticipates returning to an in-compliance
status upon the completion of those negotiations.


Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
None.


Item 5.  Other Information
--------------------------
None.


Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

(a)  The following documents are filed as exhibits to this Form 10-Q:

     2.03  Asset Purchase Agreement dated June 11, 2001 by and between Spectrum
           Organic Products, Inc. and Acirca, Inc. (1)

     2.04  Escrow and Security Agreement dated June 11, 2001 by and among
           Spectrum Organic Products, Inc., Acirca, Inc. and Webster Trust
           Company, NA. (1)

     2.05  Transition Services Agreement dated June 11, 2001 by and between
           Spectrum Organic Products, Inc. and Acirca, Inc. (1)

     2.06  License Agreement dated June 11, 2001 by and between Spectrum Organic
           Products, Inc. and Acirca, Inc. (1)

     2.07  Non Competition Agreement dated June 11, 2001 by and among Spectrum
           Organic Products, Inc., Acirca, Inc., Jethren Phillips and John
           Battendieri. (1)

     2.08  Assignment and Assumption Agreement dated June 11, 2001 by and
           between Spectrum Organic Products, Inc. and Acirca, Inc. (1)

     99.01 Joint press release of Acirca, Inc. and the Company dated June 12,
           2001, titled "Acirca Acquires Millina's Finest Sauces". (1)

     (1) Incorporated by reference to exhibits filed with the Registrant's Form
         8-K on June 26, 2001.

(b)  The Company filed a Current Report on Form 8-K on June 26, 2001, disclosing
     the sale of its tomato-based product lines as of June 11, 2001. Included
     were pro forma financial statements which disclosed the changes necessary
     to the balance sheet at March 31, 2001 as if the transaction was
     consummated on that date, and the changes necessary to the statements of
     operations for the three-month and twelve-month periods ended March 31,
     2001 and December 31, 2000, respectively, as if the transaction had
     occurred on January 1, 2000.

                                       22

<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.

Date: August 6, 2001                        SPECTRUM ORGANIC PRODUCTS, INC.

                                            By:  /s/  Robert B. Fowles
                                               -------------------------------
                                                      Robert B. Fowles
                                                      Duly Authorized Officer &
                                                      Chief Financial Officer


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