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, 2003.


[ ]  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 of incorporation)                          (I.R.S. Employer
                                                        Identification Number)

                       5341 Old Redwood Highway, Suite 400
                           Petaluma, California 94954
                     --------------------------------------
                    (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,
45,705,571 shares as of August 1, 2003. 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)
                                                                      June  30,     December 31,
                                                                        2003            2002
                                                                    ------------    ------------
Current Assets:
   <S>                                                              <C>             <C>
   Cash                                                             $      8,000    $      1,000
   Accounts receivable, net                                            3,914,600       3,075,200
   Inventories, net (Note 2)                                           8,593,500       5,269,600
   Prepaid expenses and other current assets                             162,600          79,600
                                                                    ------------    ------------
     Total Current Assets                                             12,678,700       8,425,400

Property and Equipment, net                                            4,153,700       3,447,400

Other Assets:
   Intangible assets (Note 3)                                            649,500          42,000
   Other assets, net                                                     209,100         271,900
                                                                    ------------    ------------
Total Assets                                                        $ 17,691,000    $ 12,186,700
                                                                    ============    ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Bank overdraft                                                   $    437,200    $    589,300
   Line of credit (Note 5)                                             4,401,800       2,479,800
   Accounts payable, trade                                             6,553,600       3,330,000
   Accrued expenses (Note 6)                                             678,600         722,500
   Income taxes payable                                                     --           176,000
   Current maturities of notes payable, former stockholder               187,500         187,500
   Current maturities of notes payable and
     capitalized lease obligations                                       257,200         256,000
   Current maturities of notes payable, stockholders                      92,100          87,600
                                                                    ------------    ------------
     Total Current Liabilities                                        12,608,000       7,828,700

Notes payable, former stockholder, less current maturities               592,500         676,800
Notes payable and capitalized lease obligations, less
   current maturities                                                    149,800         278,900
Notes payable, stockholders, less current maturities                      81,300         128,400
Deferred rent                                                             33,800            --
                                                                    ------------    ------------
Total Liabilities                                                     13,465,400       8,912,800
                                                                    ------------    ------------

Stockholders' Equity:
   Preferred stock, 5,000,000 shares authorized, no shares issued
     or outstanding                                                         --              --
   Common stock, without par value, 60,000,000 shares authorized,
     45,705,571 issued and outstanding at June 30, 2003 and
     December 31, 2002                                                 9,430,100       9,430,100
   Accumulated deficit                                                (5,204,500)     (6,156,200)
                                                                    ------------    ------------
Total Stockholders' Equity                                             4,225,600       3,273,900
                                                                    ------------    ------------
Total Liabilities and Stockholders' Equity                          $ 17,691,000    $ 12,186,700
                                                                    ============    ============



                            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, 2003   June 30, 2002   June 30, 2003   June 30, 2002
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
Net Sales                                         $ 11,380,800    $ 10,077,500    $ 21,689,400    $ 21,357,200

Cost of Goods Sold                                   8,414,900       7,752,400      15,650,700      16,086,900
                                                  ------------    ------------    ------------    ------------
Gross Profit                                         2,965,900       2,325,100       6,038,700       5,270,300
                                                  ------------    ------------    ------------    ------------
Operating Expenses:

   Sales and Marketing                               1,632,100       1,553,500       3,064,800       3,164,300

   General and Administrative                          917,700         759,400       1,815,300       1,581,900
                                                  ------------    ------------    ------------    ------------
Total Operating Expenses                             2,549,800       2,312,900       4,880,100       4,746,200
                                                  ------------    ------------    ------------    ------------

Gain on Sales of Product Lines (Note 4)                   --            42,100            --            42,100
                                                  ------------    ------------    ------------    ------------

Income from Operations                                 416,100          54,300       1,158,600         566,200
                                                  ------------    ------------    ------------    ------------
Other Income (Expense):

   Interest Expense                                    (82,700)       (129,300)       (153,100)       (296,600)
   Other                                                 9,300          23,900          10,500          10,600
                                                  ------------    ------------    ------------    ------------
Total Other Expenses                                   (73,400)       (105,400)       (142,600)       (286,000)
                                                  ------------    ------------    ------------    ------------

Income (Loss) Before Income Taxes                      342,700         (51,100)      1,016,000         280,200

Provision for Income Taxes                             (26,500)           --           (64,300)           --
                                                  ------------    ------------    ------------    ------------
Net Income (Loss)                                 $    316,200    $    (51,100)   $    951,700    $    280,200
                                                  ============    ============    ============    ============

Basic and Fully Diluted Income (Loss) Per Share   $       0.01    $      (0.00)   $       0.02    $       0.01
                                                  ============    ============    ============    ============

Weighted Average Shares Outstanding                 45,705,571      45,698,661      45,705,571      45,698,661
                                                  ============    ============    ============    ============


                                  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, 2003   June 30, 2002
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Net Income                                                            $    951,700    $    280,200
  Adjustments to Reconcile Net Income to Net Cash Provided by (Used
    in) Operating Activities:
         Provision for bad debts and customer deductions                    36,700         162,800
         Provision for inventory obsolescence                               74,700         (23,700)
         Depreciation and amortization                                     211,200         210,800
         Gain on sales of product lines                                       --           (42,100)
         Imputed interest on note payable, former stockholder                9,400          11,100
         Imputed interest on common stock purchase warrants                   --            30,800

  Changes in Assets and Liabilities:
         Accounts receivable                                              (876,100)         92,200
         Inventories                                                    (3,398,600)        130,600
         Prepaid expenses and other assets                                 (80,200)        (40,500)
         Accounts payable                                                2,948,600        (261,900)
         Accrued expenses and other liabilities                           (186,100)       (209,900)
                                                                      ------------    ------------
Net Cash Provided by (Used in) Operating Activities                       (308,700)        340,400
                                                                      ------------    ------------
Cash Flows from Investing Activities:
  Purchase of property and equipment                                      (915,000)       (237,500)
  Purchase of intellectual property                                       (275,000)           --
  Proceeds from sale of product lines and related inventories                 --         2,770,000
  Transaction fees on sale of product lines                                   --          (123,900)
                                                                      ------------    ------------
Net Cash Provided by (Used in) Investing Activities                     (1,190,000)      2,408,600
                                                                      ------------    ------------
Cash Flows from Financing Activities:
  Decrease in bank overdraft                                              (152,100)        (69,400)
  Proceeds from line of credit                                          22,676,600      21,977,200
  Repayment of line of credit                                          (20,754,600)    (24,306,100)
  Repayment of bank term notes payable                                    (103,100)       (158,000)
  Repayment of note payable, former stockholder                            (93,700)        (93,800)
  Repayment of notes payable, stockholders                                 (42,800)        (63,300)
  Repayment of capitalized lease obligations                               (24,600)        (35,800)
                                                                      ------------    ------------
Net Cash Provided by (Used in) Financing Activities                      1,505,700      (2,749,200)
                                                                      ------------    ------------
Net Increase (Decrease) In Cash                                              7,000            (200)

Cash, beginning of the year                                                  1,000           1,200
                                                                      ------------    ------------
Cash, end of the period                                               $      8,000    $      1,000
                                                                      ============    ============

Supplemental Disclosure of Cash Flow Information:
  Cash paid for income taxes                                          $    266,000    $      1,600
  Cash paid for interest                                              $    156,300    $    267,100

Non-Cash Financing Activities:
  Purchase of intellectual property with debt                         $    275,000            --


                             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:

     These are unaudited interim financial statements and include all
     adjustments which, in the opinion of Management, are necessary in order to
     make the financial statements not misleading. The financial statements have
     been prepared in accordance with the instructions to Form 10-Q and do not
     include certain disclosures required by accounting principles generally
     accepted in the United States of America. Accordingly, the statements
     should be read in conjunction with Spectrum Organic Products, Inc.
     financial statements and notes thereto included in the Company's Annual
     Report on Form 10-K for the year ended December 31, 2002. Operating results
     for the six-month period ended June 30, 2003 are not necessarily indicative
     of the results that may be expected for the entire year ending December 31,
     2003 or future periods.

     Certain reclassifications have been made to the prior year unaudited
     interim financial statements to be consistent with the presentation at June
     30, 2003. These reclassifications had no impact on net income or retained
     earnings.

2.   Inventories:

     Inventories consisted of the following:

                                                    June 30,        December 31,
                                                      2003              2002
                                                   ----------        ----------
     Finished goods                                $6,608,400        $4,409,500
     Raw materials                                  2,110,400         1,350,500
     Deposits on inventory                            210,300            57,600
                                                   ----------        ----------
     Total Inventories                              8,929,100         5,817,600
     Less: Reserve for obsolete inventory            (335,600)         (548,000)
                                                   ----------        ----------
     Net Inventories                               $8,593,500        $5,269,600
                                                   ==========        ==========

     Deposits on inventory consist primarily of flaxseed paid for prior to its
     receipt at the Company's production facility.

3.   Intellectual Property Purchase:

     On April 15, 2003 the Company entered into an intellectual property
     purchase agreement (the "IP Agreement") with Tenere Life Sciences, Inc.
     ("Tenere") and Mr. Rees Moerman, both unaffiliated third parties. Mr.
     Moerman is an engineer and lipid scientist who developed proprietary
     techniques for the benign extraction of oil from oil-bearing vegetable
     seeds. The Company has utilized Mr. Moerman's techniques under the
     SpectraVac and LOCET Technology License Agreement (the "License Agreement")
     for the production of flax oil and other nutritional oils since 1990. Under
     the License Agreement, the Company paid royalties to Mr. Moerman on its
     sales of products which were manufactured utilizing the intellectual
     property. Mr. Moerman assigned his rights to the intellectual property to
     Tenere on January 21, 2003.

     In accordance with the IP Agreement, the Company purchased the intellectual
     property for $550,000 to be paid in two equal installments on April 30,
     2003 and October 30, 2003. As a result, the Company will no longer be

                                       5

<PAGE>


     obligated to pay royalties to Tenere effective April 1, 2003. Royalties
     paid during the years ended December 31, 2002 and 2001 were $162,500 and
     $152,000, respectively.

     In accordance with Statement of Financial Accounting Standard No. 142,
     "Goodwill and Other Intangible Assets" ("SFAS 142"), the Company has
     determined that the IP Agreement has an indefinite useful life since it
     represents trade secrets utilized in the manufacture of flax oil and other
     nutritional oils. Accordingly, there is no periodic amortization expense.
     The Company will evaluate the intangible asset carrying value of $550,000
     for impairment in relation to the anticipated future cash flows of its
     nutritional oils at least annually.

4.   Sale of Product Lines:

     On April 25, 2002 the Company entered into an Asset Purchase Agreement with
     Acirca, Inc. pursuant to which the Company sold certain product lines from
     the Company's Aptos, California-based industrial ingredients business. The
     product lines sold included the Organic Ingredients ("OI") business in
     fruits, vegetables, concentrates and purees. The Spectrum Ingredients
     product lines consisting of culinary oils, vinegars and nutritional
     supplements were not part of the sale.

     The total consideration was $3,167,000 in cash, which included $1,417,000
     for saleable inventory sold to Acirca. Also included in the total
     consideration received was $250,000 that was deposited into an escrow
     account to be applied towards indemnity claims of Acirca or, to the extent
     not utilized for any indemnity claims of Acirca, released to the Company in
     two equal installments on August 30, 2002 and December 31, 2002. The first
     installment of $125,000 was received in full on September 3, 2002. The
     final installment of $124,700 (which was accrued at December 31, 2002) was
     received on January 31, 2003 and consisted of $125,000 plus interest earned
     on the escrowed funds less the escrow agent fees.

     Since the product line sale comprised all of the remaining assets of OI,
     the remaining net goodwill associated with the reverse acquisition of OI in
     October 1999 was written off. Accordingly, the Company recorded the
     following gain on the product line sale:

                                       6

<PAGE>


     Total cash consideration                         $ 3,167,000
     Less escrowed funds included above                  (250,000)
                                                      -----------
     Net cash proceeds from sale                        2,917,000

     Assets sold:
       Inventories                                     (1,417,000)
       Fixed assets, net of accumulated
         depreciation                                      (8,600)
       Goodwill, net of accumulated
         amortization                                  (1,470,200)
       Other assets                                        (6,300)
     Transaction fees                                    (106,700)
     Reserve for remaining inventories not
         purchased                                        (39,300)
                                                      -----------
     Loss before collection of previously
         escrowed funds                                  (131,100)
     Collection of escrowed funds from June
         2001 sale of product lines                       173,200
                                                      -----------
     Net Gain on Sale of Product Lines                $    42,100
                                                      ===========

     The Company applied the cash proceeds received against the outstanding
     borrowing under its revolving line of credit.

     The transaction fees represented investment banking, legal and accounting
     fees associated with closing the sale. An investment banking fee of $79,000
     was paid on the sale of the OI product lines to Moore Consulting, a sole
     proprietorship owned and operated by Phillip Moore, a non-executive
     Director of the Company. The fee paid represented 2.5% of the total
     consideration received from the sale and, in the opinion of Management, was
     fair, reasonable and consistent with terms the Company could have received
     from an unaffiliated third party.

     The reserve recorded for remaining inventories represented losses incurred
     or anticipated on inventories previously sold by the Company under the
     disposed product lines that were not purchased by Acirca.

     The $173,200 collection of previously escrowed funds was the final
     installment of the escrowed funds in connection with the June 2001 sale of
     the Company's tomato-based consumer product lines, which were also divested
     in order to raise working capital and focus the Company's resources on its
     core business in healthy oils, butter substitutes and essential fatty acid
     nutrition.

5.   Subsequent Event:

     On July 11, 2003 the Company entered into a Loan and Security Agreement
     (the "Credit Facility") with Comerica Bank-California ("Comerica"). The
     Credit Facility consists of a $7,000,000 revolving line of credit, a
     $1,250,000 term loan and a $1,000,000 capital expenditure term loan. The
     Credit Facility is secured by substantially all assets of the Company and
     matures on June 30, 2005 unless renewed earlier.

                                       7

<PAGE>


     The revolving line of credit is subject to a borrowing base consisting of
     certain eligible accounts receivable and inventory and bears interest at
     the prime rate or LIBOR plus 2.25%, at the Company's option. The Credit
     Facility calls for continued satisfaction of various financial covenants
     for 2003 and beyond in order to remain in compliance with Comerica.

     The $1,250,000 term loan is secured by property and equipment, bears
     interest at the prime rate plus 25 basis points (0.25%) and features a
     sixty month amortization schedule.

     The $1,000,000 capital expenditure term loan will finance the purchase of
     additional new or used property and equipment, bears interest at the prime
     rate plus 25 basis points and features a 12 month interest only draw down
     period, converting to a 48 month amortization schedule thereafter.

     The Credit Facility with Comerica replaces a similar arrangement with Wells
     Fargo Business Credit, Inc. ("WFBC"), the Company's former primary lender.
     All amounts due to WFBC were paid off on July 11, 2003 in the amount of
     $5,023,600. Included in that amount was an early termination fee of $62,400
     paid to WFBC for terminating that credit facility prior to its maturity
     date of October 9, 2004, which will be recorded as additional interest
     expense in the third quarter.

6.   Commitments and Contingencies:

     Pending Litigation
     ------------------

     In October 2000 the Company was notified by counsel for GFA Brands, Inc.
     ("GFA") that nutritional claims pertaining to Spectrum Naturals(R) Organic
     Margarine were infringing upon two patents issued in the United States that
     pertain to particular fat compositions suitable for human consumption. The
     patent holder exclusively licensed each of these patents to GFA. Management
     believes that the margarine does not infringe upon either patent, and
     further, that the patents are unenforceable. Management engaged legal
     counsel that specializes 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(R) Organic Margarine does not infringe upon
     the GFA patents, either literally or under the doctrine of equivalents.

     The Company filed a complaint against GFA for declaratory judgment of
     non-infringement and invalidity of the two patents on August 28, 2001 in
     the U.S. District Court for Northern California. The Complaint requests a
     declaratory judgment that the margarine does not infringe either patent, a
     declaratory judgment that both patents are invalid, that GFA be enjoined
     from threatening or asserting any action for infringement of either patent,
     and attorney's fees.

     GFA subsequently filed a motion to transfer venue to the U.S. District
     Court for New Jersey (the "court"). The Company filed its opposition to
     that motion, however, the motion to transfer venue was granted in January
     2002. The case is currently in the discovery phase. Markman briefs, in
     which each side presents its arguments on how the patent claims should be
     construed, were submitted by both GFA and Spectrum in July 2003. In most
     patent infringement cases, the court's determination of how the patent
     claims should be interpreted is the central issue. A Markman hearing has
     been tentatively scheduled by the court for September 4, 2003.

                                       8

<PAGE>


     A Settlement hearing between GFA, its counsel, the Company and its counsel
     took place on July 31, 2003. There was discussion amongst the parties
     regarding a potential resolution of the case without resorting to a trial.
     As of the date of this report, further negotiations were necessary with GFA
     before a potential settlement could be reached.

     Management believes the Company has meritorious defenses and that a loss is
     not probable on the patent infringement complaint at this time.
     Accordingly, no provision for loss has been recorded at June 30, 2003.

     Safety Violations and Worker's Compensation Appeals
     ---------------------------------------------------

     On April 25, 2002 a tragic industrial accident occurred at the Company's
     manufacturing facility located in Petaluma, California in which two
     employees died from asphyxiation during regular routine maintenance of
     empty oil tanks. An investigation has been completed by the State of
     California Division of Occupational Safety and Health ("CAL-OSHA") and the
     Petaluma Police Department. On October 18, 2002 Management met with
     representatives of CAL-OSHA and received their notice of nine citations for
     safety violations and total proposed penalties of $137,900. All of the
     safety violations had been completely abated before the Company's meeting
     with CAL-OSHA. The Company has retained separate legal counsel that
     specialize in CAL-OSHA matters and has filed an appeal in the hopes of
     reducing the citations and proposed penalties.

     In addition, the estates of the deceased employees have both filed
     applications to the Workers' Compensation Appeals Board of the State of
     California for an increased death benefit for serious and willful
     misconduct by the Company. These two applications are for an additional
     death benefit of $62,500 each, to be paid by the Company, should the
     estates successfully establish that the Company intentionally and willfully
     allowed unsafe working conditions to exist. The report from CAL-OSHA did
     not include any willful citations against the Company, therefore, the
     Company intends to defend itself vigorously and believes it has meritorious
     defenses.

     As of June 30, 2003 the Company had an industrial accident reserve of
     $144,200 to cover the anticipated settlement of both these issues plus
     attorney's fees. Based upon the advice of its attorneys, the Company
     believes the remaining reserve will be sufficient to cover the anticipated
     settlement of the CAL-OSHA safety violations and the worker's compensation
     appeals.

     Finally, the Sonoma County District Attorney has the right to file criminal
     charges against the Company and certain employees, asserting violations of
     the California Labor Code which entail a maximum fine of $3,000,000, for up
     to three years from the date of the accident. The Company has engaged
     separate legal counsel that specializes in this area. The remaining
     industrial accident reserve does not cover the potential fines and expenses
     associated with criminal charges nor the potential settlement of these
     issues with the District Attorney. There have been no criminal charges
     filed against the Company as of the date of this report and Management is
     unable to reasonably estimate the potential financial impact of a criminal
     filing or a negotiated settlement in lieu of a criminal filing. Attorney's
     fees incurred during the six months ended June 30, 2003 in connection with
     the potential criminal charges were $23,100 and were included in general
     and administrative expenses.

                                       9

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7.   Stock-based Compensation:

     Statement of Financial Accounting Standard No. 123, "Accounting for
     Stock-Based Compensation" ("SFAS 123"), established a fair value method of
     accounting for stock-based compensation plans and for transactions in which
     an entity acquires goods or services from non-employees in exchange for
     equity instruments. As permitted under SFAS 123, the Company has chosen to
     continue to account for employee stock-based compensation using the
     intrinsic value method prescribed in Accounting Principles Board Opinion
     No. 25, "Accounting for Stock Issued to Employees". Accordingly,
     compensation expense for employee stock options is measured as the excess,
     if any, of the fair market price of the Company's stock at the date of
     grant over the amount an employee must pay to acquire the stock.
     Compensation expense arising from options granted to non-employees is
     recorded over the service period at the estimated fair value of the options
     granted.

     All stock options issued to employees have an exercise price not less than
     the fair market value of the Company's common stock on the date of grant.
     In accordance with the accounting for such options utilizing the intrinsic
     value method, there is no related compensation expense recorded in the
     Company's financial statements. Had compensation expense for stock-based
     compensation been determined based on the fair value of the options at the
     grant dates consistent with SFAS 123, the Company's net income and net
     income per share for the three and six month periods ended June 30, 2003
     and 2002 would have been adjusted to the pro-forma amounts presented below:


                                                    Three Months Ended      Six Months Ended
                                                   --------------------   --------------------
                                                    June 30,   June 30,    June 30,   June 30,
                                                      2003       2002        2003       2002
                                                   ---------  ---------   ---------  ---------
<S>                                                 <C>        <C>         <C>        <C>
Net income (loss) as reported                       $316,200   $(51,100)   $951,700   $280,200

Less: Total compensation expense under fair value
method for all stock-based awards, net of related
tax effects                                           52,900     81,500     120,900    131,500
                                                   ---------  ---------   ---------  ---------
Pro-Forma net income (loss)                        $ 263,300  $(132,600)  $ 830,800  $ 148,700
                                                   =========  =========   =========  =========
Basic and diluted income (loss) per share:
  As reported                                      $    0.01  $   (0.00)  $    0.02  $    0.01
  Pro-forma                                        $    0.01  $   (0.00)  $    0.02  $    0.00


     The fair value of option grants for 2003 was estimated on the date of grant
     utilizing the Black-Scholes option-pricing model, with the following
     assumptions: expected life of five years, risk-free interest rate of 2.5%,
     no dividend yield and volatility of 115%.

     The fair value of option grants for 2002 was estimated on the date of grant
     utilizing the Black-Scholes option-pricing model, with the following
     assumptions: expected life of five years, risk-free interest rate of 2.5%,
     no dividend yield and volatility of 214%.

                                       10
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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 and
availability 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 Company's common stock.

Introduction:

Spectrum Organic Products, Inc. ("SPOP", the "Company", or the "Registrant")
competes primarily in three product categories: natural and organic foods sold
under the Spectrum Naturals(R) brand, nutritional supplements sold under the
Spectrum Essentials(R) brand, and industrial ingredients sold by the Spectrum
Ingredients sales force for use by other manufacturers. The vast majority of the
Company's products are oil-based and the Company has positioned itself as "The
Good Fats Company".

Within the Spectrum Naturals(R) brand, the Company's products include olive oils
and other culinary oils, salad dressings, condiments and butter-substitutes such
as Spectrum Organic Margarine(R) and Spectrum Spread(R). All of the Company's
culinary products feature healthy oils, contain no hydrogenated fats and are
offered in a variety of sizes and flavors in both organic and conventional
offerings.

Within the Spectrum Essentials(R) brand, the Company's products include organic
flax oils, borage oil, Norwegian fish oil and other essential fatty acids in
both liquid and capsule forms. The Spectrum Essentials(R) products are
cold-pressed, nutritionally rich sources of Omega-3 and Omega-6 essential fatty
acids and are also offered in a variety of sizes and styles.

                                       11

<PAGE>


The Spectrum Ingredients (formerly known as Spectrum Commodities, Inc.) sales
force offers organic culinary oils, vinegar and nutritional oils to other
manufacturers for use in their products. In addition, they bring incremental
purchasing power to the Company resulting in higher margins for the consumer
branded product lines.

The Company was formed on October 6, 1999 by the four-way reverse merger of
Spectrum Naturals, Inc. ("SNI"), its affiliate Spectrum Commodities, Inc.
("SCI"), Organic Ingredients, Inc. ("OI"), with and into Organic Food Products,
Inc. ("OFPI"). OFPI was the registrant prior to the merger, but since a
controlling interest in the Company is held by former SNI stockholders, the
merger was accounted for as a reverse acquisition, with SNI as accounting
acquirer and OI and OFPI as accounting acquirees.

On June 11, 2001 the Company sold the OFPI tomato-based product lines to Acirca,
Inc., an unrelated third party. On April 25, 2002 the Company sold the OI
industrial ingredient business in fruits, vegetables, concentrates and purees to
Acirca. Accordingly, results for the three months ended June 30, 2002 include
the operating results associated with the OI disposed product lines until the
date of sale.

The two dispositions have significantly strengthened the Company from a
liquidity and working capital standpoint. The Company now plans to focus its
resources on its core business in healthy oils, butter substitutes and essential
fatty acid nutrition.

Critical Accounting Policies and Estimates
------------------------------------------

The following discussion and analysis of the Company's financial condition and
results of operations is based upon the Company's financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses. The Company bases its
estimates on historical experience and various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for the carrying values of assets and liabilities that are not readily
apparent from other sources. On an on-going basis, the Company re-evaluates all
of its estimates, including those related to accounts receivable allowances,
inventory reserves, the industrial accident reserve and the deferred tax asset
valuation allowance. Actual results may differ materially from these estimates
under different assumptions or conditions and as additional information becomes
available in future periods.

The Company believes the following are the more significant judgments and
estimates used in the preparation of its financial statements:

Accounts Receivable Allowances - The Company provides allowances against
accounts receivable for estimated bad debts, returns and deductions by customers
for trade promotions and programs. These allowances are based upon the Company's
historical experience with bad debt write-offs and customer deductions, customer
creditworthiness, payment trends and general economic conditions. Allowances for
bad debts and customer deductions were $452,700 at June 30, 2003 on gross trade
accounts receivable of $4,318,100. While this estimate is one of the more
significant estimates the Company makes in the preparation of its financial
statements, Management does not consider it to be highly uncertain.

                                       12

<PAGE>


Inventory Reserves - The Company establishes reserves for obsolete, excess and
slow-moving inventories in order to properly value its inventory at the lower of
cost or market. The reserve estimates are based upon historical inventory usage,
spoilage, current market conditions, and anticipated future demand. Reserves for
obsolete inventories were $335,600 at June 30, 2003 on total gross inventories
of $8,929,100. While this estimate is one of the more significant estimates the
Company makes in the preparation of its financial statements, Management does
not consider it to be highly uncertain.

Deferred Tax Asset Valuation Allowance - As of December 31, 2002 the Company had
deferred tax assets of $1,997,900 primarily resulting from net operating loss
carryforwards ("NOLs"), which consisted of $5,200,000 of Federal NOLs that
expire at various times through 2021, and $2,800,000 of state NOLs that expire
at various times through 2012. The majority of the NOLs originated from the
pre-merger operations of OFPI. As a result of OFPI's acquisition by SNI, OFPI
experienced an ownership change in excess of 50% for federal and state income
tax purposes. Therefore, an annual limitation is placed by the taxing
authorities on the Company's right to realize the benefit of the pre-merger
NOLs. Management is unable to determine whether it is more likely than not that
the net deferred tax assets will be realized. Accordingly, Management has
maintained a 100% valuation allowance against the net deferred tax assets for
all periods presented in the financial statements. This valuation allowance is
highly uncertain because its value depends upon the future taxable income of the
Company. It will continue to be evaluated during 2003 in light of the Company's
operating results to determine whether it should be fully or partially reversed
at some future point.

Industrial Accident Reserve - During the second quarter of 2002, the Company
established a reserve of $200,000 to cover anticipated future expenses
associated with an industrial accident that occurred on April 25, 2002 (see Note
6). The reserve was established to cover anticipated citations and fines from
CAL-OSHA, applications to the Workers' Compensation Appeals Board of the State
of California for serious and willful misconduct penalties levied against the
Company, and attorney's fees. As of June 30, 2003 there was $144,200 remaining
in the industrial accident reserve. This reserve is highly uncertain because the
CAL-OSHA proposed fines of $137,900 have been appealed and the applications to
the Workers' Compensation Appeals Board for serious and willful misconduct
penalties, if litigated, are an all-or-nothing proposition under which the
Company will either be liable for $125,000 in total or nothing. The Company does
not anticipate that the Workers' Compensation Appeals will be litigated, based
upon the advice of its attorneys. Furthermore, the reserve does not cover
potential criminal penalties against the Company which the Sonoma County
District Attorney's office can levy for up to three years following the
accident. There have been no criminal actions filed against the Company as of
the date of this report, however, the possibility does exist and Management is
unable to reasonably estimate the potential financial impact of a criminal
filing as of the date of this report.

                                       13

<PAGE>
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
Results of Operations for the Three Month Periods Ending June 30, 2003 and June
30, 2002
--------------------------------------------------------------------------------

Summary of Results:

Management believes that Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") is an important measure of the Company's operating
performance. For the three months ended June 30, 2003 EBITDA was $532,900
compared to $183,900 for the prior year, an increase of $345,000 or 190%. The
improved performance in 2003 is discussed in detail below, but was primarily
attributable to increased sales and gross profit, partially offset by increased
operating expenses.

While Management believes that EBITDA is a useful measure of the Company's
financial performance, it should not be construed as an alternative to income
from operations, net income or cash flows from operating activities as
determined in accordance with accounting principles generally accepted in the
United States of America. Furthermore, the Company's calculation of EBITDA,
which is detailed in the following table, may be different from the calculation
used by other companies, thereby limiting comparability:

                                                   Three Months Ended June 30,
                                                   ---------------------------
                                                      2003              2002
                                                   ---------         ---------
Net income (loss)                                  $ 316,200         $ (51,100)
Add back :Provision for income taxes                  26,500              --
         :Interest expense                            82,700           129,300
         :Depreciation and amortization              107,500           105,700
                                                   ---------         ---------
EBITDA                                             $ 532,900         $ 183,900
                                                   =========         =========

Revenues:

SPOP's net sales for the three months ended June 30, 2003 were $11,380,800
compared to $10,077,500 for 2002, an increase of $1,303,300 or 13%. The increase
in 2003 was primarily attributable to the Spectrum Ingredients product lines,
however, all three categories the Company competes in delivered strong sales
growth. Comparable net sales (after the elimination of disposed or discontinued
product lines from both periods) increased by 21% as detailed in the following
table:
                                                     Three Months Ended June 30,
                                                     ---------------------------
                                                   2003            2002      % Change
                                                   ----            ----      --------
<S>                                             <C>             <C>              <C>
Spectrum Naturals(R)Culinary Products           $ 5,059,200     $ 4,367,100      +16%
Spectrum Essentials(R)Nutritional Supplements     2,530,300       1,999,800      +27%
Spectrum Ingredients/Private Label Products       3,753,800       2,990,300      +26%
                                                -----------     -----------  --------
Comparable Net Sales                             11,343,300       9,357,200      +21%
Disposed/Discontinued Product Lines                  37,500         720,300      -95%
                                                -----------     -----------  --------
  Total Net Sales                               $11,380,800     $10,077,500      +13%
                                                ===========     ===========  ========

Within the Spectrum Naturals(R) culinary products, sales were significantly
higher than prior year in consumer packaged oils (+26%), institutional and food
service oils (+16%) and individually quick frozen fruits and vegetables (+19%).
The Company's culinary oils continued to benefit from increased consumer
awareness of the dangers of hydrogenated oils with regards to obesity and
cardiovascular disease.

Spectrum Essentials(R) nutritional supplement sales increased 27% versus the
prior year, as a result of strong demand for flax oil. During the first quarter
of 2003 the Company arranged new sources of flaxseed supply enabling it to meet
demand for its flax oil products during the second quarter. The cost of the
flaxseed was sharply higher than the prior year, however.

                                       14
</TABLE>

<PAGE>


The Spectrum Ingredients sales increased 26% versus the prior year on the
strength of increased customer demand for non-hydrogenated oils. During the
second quarter there was additional media coverage of commitments by several
Fortune 500 companies to eliminate or sharply reduce hydrogenated oils from
their products.

Cost of Goods Sold:

The Company's cost of goods sold decreased sharply as a percent of net sales for
the three-month period ended June 30, 2003 to 73.9% compared to 76.9% for the
same period in 2002. The decrease was due primarily to the impact of the
industrial accident during the prior year, which included $254,100 of expenses
directly attributable to the accident plus the impact of unabsorbed overhead due
to the plant shutdown following the accident, which more than offset increased
costs in the Company's flax oil product lines as a result of the higher cost of
flaxseed in 2003.

Gross Profit:

Gross profit for 2003 was $2,965,900 versus $2,325,100 for 2002, an increase of
$640,800 or 28%. Gross profit as a percentage of net sales (gross margin) was
26.1% for 2003 versus 23.1% for 2002, primarily as a result of the expenses
associated with the industrial accident in 2002, which more than offset the
margin erosion in the Spectrum Essentials(R) product lines as a result of the
higher flaxseed cost.

Sales and Marketing Expenses:

The Company's sales and marketing expenses for 2003 were $1,632,100 or 14.5% of
net sales, versus $1,553,500 or 15.4% of net sales for 2002. The increase in
spending of $78,600 in 2003 was primarily attributable to increased investment
in market research and public relations during 2003 of $113,400 and $24,600,
respectively, partially offset by reduced levels of consumer advertising of
$86,000 as a result of improvements currently being made to the Company's
advertising message and its overall consistency.

General and Administrative Expenses:

The Company's general and administrative expenses for 2003 were $917,700 or 8.1%
of net sales, versus $759,400 or 7.5% of net sales for 2002. The increase in
spending of $158,300 was primarily attributable to increased compensation and
benefits of $81,100, increased compensation for the Company's non-executive
Directors of $21,700 and increased rent of $33,300 associated with the move to
the Company's new headquarters facility.

Gain on Sales of Product Lines:

Since both product line sales comprised all of the remaining assets of OI and
OFPI, the remaining net goodwill associated with the reverse acquisition of both
companies in October 1999 was written-off as a result of the sales. Accordingly,
the Company recorded a net gain from the sales of product lines during the six
months ended June 30, 2002 of $42,100 which consisted of the collection of the
final escrowed funds from the sale of OFPI of $173,200 partially offset by the
loss incurred on the sale of OI prior to the collection of escrowed funds on
that sale (see Note 4 to the financial statements).

                                       15

<PAGE>


Interest Expense:

The Company's interest expense for 2003 was $82,700 versus $129,300 for 2002.
The reduction of $46,600 or 36% was primarily attributable to sharply lower
levels of long-term debt outstanding during 2003 versus 2002, mainly as a result
of the early retirement of the private placement notes on December 31, 2002.

Also contributing to the reduced interest expense in 2003 was the negotiated
reduction of the fixed interest rate paid to the Company's second largest
creditor from 12% per annum to 9% per annum effective November 1, 2002.

Provision for Income Taxes:

During the three months ended June 30, 2003 the Company recorded a provision for
state income taxes of $26,500 versus zero for 2002. The Company has federal net
operating loss carryovers sufficient to offset all federal income taxes due on
its estimated taxable income for 2003. However, the State of California recently
announced a two-year moratorium on the use of net operating loss carryovers, as
a result of a budget crisis, effective January 1, 2002. Consequently, the
Company paid $176,000 in estimated state income taxes due for 2002 during the
first quarter of 2003 and will owe state income taxes for 2003 estimated at 9%
of its taxable income. The Company estimates that its taxable income for the
second quarter of 2003 was approximately $300,000.

Due to continued uncertainty regarding the Company's realization of its deferred
tax assets, the Company maintained a 100% reserve at June 30, 2003 against the
net deferred tax assets. In light of the Company's operating results, this
reserve will continue to be evaluated during 2003 to determine whether it should
be fully or partially reversed at some future point.


--------------------------------------------------------------------------------
Results of Operations for the Six-Month Periods Ending June 30, 2003 and
June 30, 2002
--------------------------------------------------------------------------------

Summary of Results:

Management believes that earnings before interest, taxes, depreciation and
amortization ("EBITDA") is an important measure of the Company's operating
performance. For the six months ended June 30, 2003, EBITDA was $1,380,300
compared to $787,600 for the prior year, an increase of $592,700 or 75%. The
improved performance in 2003 is discussed in detail below, but was primarily
attributable to increased sales and gross profit, partially offset by increased
general and administrative expenses.

While Management believes that EBITDA is a useful measure of the Company's
financial performance, it should not be construed as an alternative to income
from operations, net income or cash flows from operating activities as
determined in accordance with accounting principles generally accepted in the
United States of America. Furthermore, the Company's calculation of EBITDA,
which is detailed in the following table, may be different from the calculation
used by other companies, thereby limiting comparability:

                                       16

<PAGE>
<TABLE>
<CAPTION>



                                                   Six Months Ended June 30,
                                                 ----------------------------
                                                    2003             2002
                                                 -----------      -----------
Net income                                       $   951,700      $   280,200
Add back :Provision for income taxes                  64,300             --
         :Interest expense                           153,100          296,600
         :Depreciation and amortization              211,200          210,800
                                                 -----------      -----------
EBITDA                                           $ 1,380,300      $   787,600
                                                 ===========      ===========


Revenues:

SPOP's net sales for the six months ended June 30, 2003 were $21,689,400
compared to $21,357,200 for 2002, an increase of $332,200 or 2%. The increase
was attributable to strong sales growth in all three of the Company's primary
product categories, partially offset by the lost sales associated with the
disposed product lines. Comparable net sales (after eliminating the sales of
disposed or discontinued product lines from both periods) increased by 18%, as
detailed in the following table:
                                                           Six Months Ended June 30,
                                                           -------------------------
                                                     2003           2002       % Change
                                                     ----           ----       --------
<S>                                              <C>            <C>               <C>
Spectrum Naturals(R)Culinary Products            $  9,657,200   $  8,163,400      +18%
Spectrum Essentials(R)Nutritional Supplements       4,976,600      4,449,700      +12%
Spectrum Ingredients(R)/Private Label Products      6,965,900      5,765,400      +21%
                                                 ------------   ------------     -----
Comparable Net Sales                               21,599,700     18,378,500      +18%
Disposed/Discontinued Product Lines                    89,700      2,978,700      -97%
                                                 ------------   ------------     -----
  Total Net Sales                                $ 21,689,400   $ 21,357,200       +2%
                                                 ============   ============     =====

Within the Spectrum Naturals(R) culinary products, sales were significantly
higher in consumer packaged oils (+22%), institutional and food service oils
(+19%), consumer and institutional sizes of mayonnaise (+11%) and individually
quick frozen fruits and vegetables (+15%). All of the Spectrum Naturals(R)
products contain no hydrogenated oils and continue to benefit from increased
consumer awareness of the dangers of hydrogenated oils with regards to obesity
and cardiovascular disease.

Spectrum Essentials(R) nutritional supplement sales increased 12% versus the
prior year as a result of continued strong demand for flax oil and other
nutritionally rich sources of Omega 3 and 6 essential fatty acids. The Spectrum
Essentials(R) product line continues to benefit from increased consumer
awareness of the importance of Omega 3 and 6 EFAs to brain and other organ
function.

The Spectrum Ingredients sales increase of 21% versus the prior year was
primarily attributable to increased demand by other food manufacturers for
non-hydrogenated culinary oils for use in their products.

                                       17
</TABLE>

<PAGE>


Cost of Goods Sold:

The Company's cost of goods sold decreased as a percent of net sales for the
six-month period ended June 30, 2003 to 72.2% compared to 75.3% for the same
period in 2002. The decrease was primarily due to the direct effects of the
industrial accident during the prior year of $254,100 plus the impact of
unabsorbed overhead as a result of the plant shutdown following the accident.
Partially offsetting the impact of the industrial accident was higher flaxseed
costs during 2003 as a result of a crop shortage in North America associated
with drought conditions during 2002.

Gross Profit:

Gross profit as a percent of net sales (gross margin) was 27.8% for 2003 versus
24.7% for the prior year. The sharp increase was primarily due to the effects of
the industrial accident on the prior year, partially offset by increased
flaxseed costs during 2003.

Sales and Marketing Expenses:

The Company's sales and marketing expenses for the six months ended June 30,
2003 were $3,064,800 or 14.2% of net sales, versus $3,164,100 or 14.8% of net
sales for 2002. The decrease in spending of $99,300 was primarily attributable
to the elimination of $241,200 of compensation and benefits associated with the
eleven full time employees formerly associated with the OI business disposed of
on April 25, 2002. Partially offsetting that was increased investment in market
research and public relations of $164,700 during 2003.

General and Administrative Expenses:

The Company's general and administrative expenses for the six months ended June
30, 2003 were $1,815,300 or 8.4% of net sales, versus $1,581,900 or 7.4% of net
sales for 2002. The increase in spending of $233,400 was primarily attributable
to increased compensation and benefits of $126,100, increased rent of $66,500
associated with the move to the Company's new headquarters in December 2002, and
increased fees for non-executive Directors in 2003 of $43,800.

Gain on Sales of Product Lines:

Since both product line sales comprised all of the remaining assets of OI and
OFPI, the remaining net goodwill associated with the reverse acquisition of both
companies in October 1999 was written-off as a result of the sales. Accordingly,
the Company recorded a net gain from the sales of product lines during the six
months ended June 30, 2002 of $42,100, which consisted of the collection of the
final escrowed funds from the sale of OFPI of $173,200 partially offset by the
loss incurred on the sale of OI prior to the collection of escrowed funds on
that sale (see Note 4 to the financial statements).

Interest Expense:

The Company's interest expense for the six months ended June 30, 2003 was
$153,100 versus $296,600 for 2002. The reduction of $143,500 or 48% was
primarily attributable to lower borrowing levels under the line of credit as a
result of the sale of the OI product lines on April 25, 2002. Also contributing
to the reduced interest expense in 2003 was the early retirement of the private
placement notes on December 31, 2002 and the reduction in the interest rate paid
to the Company's second largest creditor from 12% per annum to 9% per annum
effective November 1, 2002.

                                       18

<PAGE>


Provision for Income Taxes:

During the six months ended June 30, 2003 the Company recorded a provision for
state income taxes of $64,300 versus zero for 2002. The Company has federal net
operating loss carryovers sufficient to offset all federal income taxes due on
its estimated taxable income for 2003. However, the State of California recently
announced a two-year moratorium on the use of net operating loss carryovers, as
a result of a budget crisis, effective January 1, 2002. Consequently, the
Company paid $176,000 in estimated state income taxes due for 2002 during the
first quarter of 2003 and will incur state income tax expense for 2003 estimated
at 9% of its taxable income. The Company estimates that its taxable income for
the first six months of 2003 was approximately $720,000.

Due to continued uncertainty regarding the Company's realization of its deferred
tax assets, the Company maintained a 100% reserve at June 30, 2003 against the
net deferred tax assets. In light of the Company's operating results, this
reserve will continue to be evaluated during 2003 to determine whether it should
be fully or partially reversed at some future point.

Seasonality:

Historically, the Company has experienced little seasonal fluctuation in
revenues. With regards to product purchasing, the Company will seasonally
contract for certain raw materials for the entire year at harvest time or at
planting time. 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.

Liquidity and Capital Resources:

During the six months ended June 30, 2003 the Company maintained a credit
agreement with Wells Fargo Business Credit ("WFBC") consisting of a revolving
line of credit and term debt bearing interest at prime plus 1% and 1.25%,
respectively.

As disclosed in Note 5 to the financial statements, the Company terminated the
credit agreement with WFBC effective July 11, 2003 and entered into a new Credit
Facility with Comerica Bank-California ("Comerica") that expires on June 30,
2005 unless renewed earlier. The new Credit Facility includes a revolving line
of credit up to a maximum of $7,000,000, a term loan for $1,250,000 and a
capital expenditure term loan of $1,000,000. The new Credit Facility is secured
by substantially all assets of the Company and enables the Company to borrow
below prime, using a LIBOR rate option, for the first time in its history.

The new Credit Facility with Comerica substantially enhanced the Company's
available borrowing capacity during July 2003 as a result of refinancing the
existing term debt and more liberal definitions of eligible inventory to secure
the borrowing base under the revolving line of credit.

The Company could not operate its business without the Credit Facility with
Comerica or one similar to it. At June 30, 2003 the Company satisfied all
financial covenants and all other requirements under the Credit Agreement with
WFBC. The new Credit Facility with Comerica calls for continued satisfaction of

                                       19

<PAGE>


various financial covenants for 2003 and beyond related to profitability levels,
debt service coverage, tangible net worth and the ratio of total liabilities to
tangible net worth.

During 2003 the Company used $308,700 in cash from operating activities,
compared to generating $340,400 in cash in 2002. The increase in cash used was
primarily due to increased inventory levels as the Company rebuilt its safety
stock of flax oil products in the wake of the flaxseed shortage during late 2002
and higher levels of trade accounts receivable due to increased sales. Seed
inventories were sharply higher as a result of higher costs and the requirement
to pay for seed in advance prior to shipment due to intense competition.
Partially offsetting the increased inventories were higher levels of accounts
payable associated with the same issues.

Cash used in investing activities was $1,190,000 in 2003 compared to cash
provided of 2,408,600 in 2002. The cash was invested by the Company in machinery
and equipment, primarily for a new rotary labeler and six used expeller presses
and the purchase of the intellectual property (see Note 3 to the financial
statements). The cash provided during the prior year was primarily attributable
to the sale of the OI product lines and related inventories in April 2002.

Cash provided by financing activities was $1,505,700 in 2003 compared to cash
used of $2,749,200 in 2002. The funds provided from financing during 2003
primarily reflected increased borrowing under the revolving line of credit to
finance the equipment and intellectual property purchases and the cash used for
operating activities. The cash used in financing activities during 2002 was
primarily attributable to payments against outstanding borrowings under the
Company's line of credit with the cash proceeds from the sale of the OI product
lines and related inventories in April 2002.

Management believes that future cash flows from operations and available
borrowing capacity under the revolving line of credit should provide adequate
funds to meet the Company's estimated cash requirements for the foreseeable
future. Available borrowing capacity under the revolving line of credit was
$1,722,900 and $2,036,400 at June 30, 2003 and 2002, respectively.

The Company relocated to a new leased headquarters facility in December 2002
which represented a significant upgrade to the Company's office facilities. The
new office is rented under a five year fixed operating lease. Rental payments
for the year ended December 31, 2003 are expected to be $185,600.

Effective June 2, 2003 the Company relocated its third-party warehousing and
distribution facility from Rancho Cucamongo, California to a new facility in
Woodland, California operated by Interpac Technologies, Inc. ("Interpac").
Additionally, the Company outsourced its bottling operation effective July 14,
2003 to another Interpac facility in Petaluma, California. As a result, there
were thirteen positions eliminated from the Company's bottling and warehousing
operation at its Copeland Street, Petaluma facility during July. The Company
continues to own its bottling equipment, which has been moved and reassembled in
a more efficient configuration at the Interpac Petaluma facility.

The Company does not utilize off-balance sheet financing arrangements. There
were no transactions with special purpose entities that give the Company access
to assets or additional financing or carry debt that is secured by the Company.
There was one significant transaction with a related party during the six months
ended June 30, 2003. The Company paid consulting fees of $49,500, plus expenses
incurred, to Running Stream Food and Beverage, Inc. ("RSFB"). RSFB provides

                                       20

<PAGE>


private label consulting and management services to the Company and is owned and
operated by John R. Battendieri, a non-executive Director of the Company. In the
opinion of Management, the consulting fees paid to RSFB were fair, reasonable
and consistent with terms the Company could have obtained from an unaffiliated
third party.

Mr. Thomas Simone is one of the Company's non-executive Directors and also sits
on the Board of Directors of United Natural Foods, Inc ("UNFI"). UNFI is the
Company's largest customer, representing approximately 50% of the Company's net
sales for the six months ended June 30, 2003.

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 and
availability 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.

New Applicable Accounting Pronouncements:

In July 2002 the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard No. 146 ("SFAS 146"), "Accounting for Costs
Associated with Exit or Disposal Activities". SFAS 146 requires that a liability
for expenses associated with an exit or disposal activity be recognized when the
liability is incurred. SFAS 146 also establishes that fair value is the
objective for initial measurement of the liability. Severance pay under SFAS
146, in many cases, would be recognized over time rather than up front. The
provisions of SFAS 146 are effective for exit or disposal activities that are
initiated after December 31, 2002. The Company's relocation and outsourcing of
its bottling operation to the Interpac Petaluma facility became effective on
July 14, 2003. Exit and disposal costs associated with the bottling operation
relocation and outsourcing are expected to be minor and will be recognized
during the third quarter.

In November 2002 the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others", which is effective for financial statements issued
after December 15, 2002. There have been no new guaranties entered into during
2003 and therefore no valuation necessary under FIN 45. However, the Company is
the continuing guarantor for a portion of a line of credit for The Olive Press,
LLC, an unrelated third party, in the amount of $25,000.

In December 2002 the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure", which provides alternative methods of
transition for a voluntary change to the fair value method of accounting for
stock-based employee compensation as prescribed in SFAS 123, "Accounting for
Stock-Based Compensation". Additionally, SFAS 148 requires more prominent and
more frequent disclosures in financial statements about the effects of
stock-based compensation. The provisions of SFAS 148 are effective for fiscal
years ending after December 15, 2002 with early application permitted in certain
circumstances. Management has evaluated the benefits of changing to the fair
value method of accounting for stock-based compensation and has elected to
continue to use the intrinsic value method. Accordingly, Management does not

                                       21

<PAGE>
<TABLE>
<CAPTION>


expect the adoption of SFAS 148 to have a material impact on the Company's
financial condition or results of operations. The additional interim disclosures
required under SFAS 148 are included in Note 7 to the financial statements.

In January 2003 the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"), which requires the consolidation of
certain special purpose or variable interest entities. FIN 46 is applicable to
financial statements issued after 2002. There are no entities that are required
to be consolidated with the Company's financial statements as a result of FIN
46.


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.

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, 2003 the average outstanding balance under the line of credit was
approximately $4,072,700 with a weighted average effective interest rate of 5.5%
per annum. For the six months ended June 30, 2002 the average outstanding
balance under the line of credit was approximately $4,311,000 with a weighted
average effective interest rate of 6.7% per annum.

Certain other debt items are also 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, excluding capital
leases ($ thousands):

                                                       Expected Principal Payments
                                                       (Periods Ended December 31)
                        Outstanding      ---------------------------------------------------------
                       June 30, 2003      2003      2004      2005      2006      2007      2011
                       -------------      ----      ----      ----      ----      ----      ----
Long Term Debt:
<S>                           <C>        <C>       <C>       <C>       <C>         <C>       <C>
Fixed Rate                    $657.7     $138.7    $275.2    $228.2    $15.6       --        --
  Avg. Int. Rate                 9.3%       9.3%      9.3%      9.2%     9.0%      --        --
Variable Rate                 $325.8     $325.8      --        --       --         --        --
  Avg. Int. Rate                 5.3%       5.3%     --        --       --         --        --
Imputed Rate                  $295.6       --        --        --       --         --      $295.6
  Avg. Int. Rate                 6.5%      --        --        --       --         --         6.5%

As discussed in Note 5 to the financial statements, the Company entered into a
Loan and Security Agreement with Comerica Bank-California effective July 11,
2003. As a result, all of the Company's variable rate long-term debt outstanding
at June 30, 2003 was retired on July 11 and replaced with new long-term debt
provided by Comerica. The Company's fixed rate and imputed rate long-term debt
outstanding at June 30, 2003 were not effected by the subsequent change to
Comerica.

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, 2003 these future commitments were not at
prices in excess of current market, nor in quantities in excess of normal
requirements. The Company does not utilize derivative contracts either to hedge
existing risks or for speculative purposes.

                                       22
</TABLE>

<PAGE>


Item 4.  DISCLOSURE CONTROLS AND PROCEDURES
-------------------------------------------

The Company's Chief Executive Officer and Chief Financial Officer have evaluated
the effectiveness of both the design and the operation of its disclosure
controls and procedures and have found them to be adequate. The Company has
formed a Disclosure Review Committee (the "DRC") which consists of various
senior managers from each functional area of the Company. The DRC considers the
materiality of new information and reports to the Company's Chief Financial
Officer.

There were no material changes in the Company's internal control system during
the six months ended June 30, 2003. Management is not aware of any significant
deficiencies in the design or operation of internal controls.


PART II - OTHER INFORMATION

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

In October 2000 the Company was notified by counsel for GFA Brands, Inc. ("GFA")
that nutritional claims pertaining to Spectrum Naturals(R) Organic Margarine
were infringing upon two patents issued in the United States that pertain to
particular fat compositions suitable for human consumption. The patent holder
exclusively licensed each of these patents to GFA. Management believes that the
margarine does not infringe upon either patent, and further, that the patents
are unenforceable. Management 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(R) Organic Margarine
does not infringe upon the GFA patents, either literally or under the doctrine
of equivalents.

The Company filed a complaint against GFA for declaratory judgment of
non-infringement and invalidity of the two patents on August 28, 2001 in the
U.S. District Court for Northern California. The Complaint requests a
declaratory judgment that the margarine does not infringe either patent, a
declaratory judgment that both patents are invalid, that GFA be enjoined from
threatening or asserting any action for infringement of either patent, and
attorney's fees.

GFA subsequently filed a motion to transfer venue to the U.S. District Court for
New Jersey (the "court"). The Company filed its opposition to that motion,
however, the motion to transfer venue was granted in January 2002. The case is
currently in the discovery phase. Markman briefs, in which each side presents
its arguments on how the patent claims should be construed, were submitted by
both GFA and Spectrum in July 2003. In most patent infringement cases, the
court's determination of how the patent claims should be interpreted is the
central issue. A Markman hearing has been tentatively scheduled by the court for
September 4, 2003.

A Settlement hearing between GFA, its counsel, the Company and its counsel took
place on July 31, 2003. There was discussion amongst the parties regarding a
potential resolution of the case without resorting to a trial. As of the date of
this report, further negotiations were necessary with GFA before a potential
settlement could be reached.

                                       23

<PAGE>


Management believes the Company has meritorious defenses and that a loss is not
probable on the patent infringement complaint at this time. Accordingly, no
provision for loss has been recorded at June 30, 2003.


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

During the six months ended June 30, 2003 the Company did not issue any shares
of its common stock.

The Company has not in the past nor does it intend to pay cash dividends on its
common stock in the foreseeable 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
----------------------------------------

None.


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)  Exhibits:

     10.43 Agreement for Purchase and Sale of Intellectual Property dated April
     15, 2003 by and between Spectrum Organic Products, Inc., Tenere Life
     Sciences, Inc. and Rees Moerman.

     99.11 Certification of Chief Executive Officer pursuant to Section 906 of
     the Sarbanes-Oxley Act of 2002.

     99.12 Certification of Chief Financial Officer pursuant to Section 906 of
     the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K during the quarter ended June 30, 2003:

     The Company filed a Current Report on Form 8-K on April 21, 2003 disclosing
     the dismissal of its previous independent certifying accountant and another
     Current Report on Form 8-K on May 12, 2003 disclosing the appointment of
     Grant Thornton, LLP as its new independent certifying accountant.

                                       24

<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 4, 2003                        SPECTRUM ORGANIC PRODUCTS, INC.

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

                                       25

<PAGE>


CERTIFICATIONS

     I Neil G. Blomquist, Chief Executive Officer of the Company, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Spectrum Organic
     Products, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  August 4, 2003

                                            /s/  Neil G. Blomquist
                                            ----------------------------------
                                                 Neil G. Blomquist
                                                 Chief Executive Officer

                                       26

<PAGE>


     I Robert B. Fowles, Chief Financial Officer of the Company, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Spectrum Organic
     Products, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  August 4, 2003

                                            /s/  Robert B. Fowles
                                            -----------------------------------
                                                 Robert B. Fowles
                                                 Chief Financial Officer

                                       27