UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q
(mark one)
    [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                  For the thirty-nine weeks ended June 27, 1999
                                       OR
        [   ] TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

            For the transition period from __________ to ___________

                        Commission File Number: 333-24939
                              The Fonda Group, Inc.
             (Exact name of registrant as specified in its charter)

      Delaware                                                 13-3220732
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                             2920 North Main Street
                            Oshkosh, Wisconsin 54901
                                 (920) 235-1036
   (Address and telephone number of registrant's principal executive offices)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest practicable date.

         Common Stock, $.01 par value, as of August 1, 1999:          100 shares

<PAGE>

                              THE FONDA GROUP, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                                TABLE OF CONTENTS

Part I - Financial Information

Item 1. Financial Statements (unaudited):                                   Page

         Balance Sheets as of June 27, 1999 and
         July 26, 1998 (audited)                                              3

         Statements of Operations for the thirteen and
         thirty-nine  weeks ended June 27, 1999 and July 26, 1998             4

         Statements of Cash Flows for the thirty-nine
         weeks ended June 27, 1999 and July 26, 1998                          5

         Notes to Financial Statements                                        6

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                            7

Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K                                    12

Signatures                                                                   12

                                       2
<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                              THE FONDA GROUP, INC.
                                 BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                       June 26,          July 26,
                                                                         1999              1998
                                                                         ----              ----
                                                                     (unaudited)
ASSETS
Current assets:
<S>                                                                       <C>            <C>
    Cash                                                              $     392         $  16,361
    Accounts receivable, less allowance for doubtful
      accounts of $643 and $789, respectively                            30,854            29,385
    Due from affiliates                                                   9,142             1,584
    Inventories                                                          38,455            34,803
    Deferred income taxes                                                 4,375             5,469
    Other current assets                                                  3,812             2,086
                                                                     ----------        ----------
         Total current assets                                            87,030            89,688
Property, plant and equipment, net                                       56,086            48,151
Goodwill, net                                                            19,651            21,462
Other assets, net                                                        19,620            19,227
                                                                     ----------        ----------
TOTAL ASSETS                                                         $  182,387        $  178,528
                                                                     ==========        ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
   Accounts payable                                                  $   10,625        $    7,077
   Accrued expenses                                                      17,449            24,867
   Current maturities of long-term debt                                     551               595
                                                                     ----------        ----------
      Total current liabilities                                          28,625            32,539
Long-term debt                                                          129,290           121,767
Other liabilities                                                         2,355             1,896
Deferred income taxes                                                     5,621             4,771
                                                                     ----------        ----------
      Total liabilities                                                 165,891           160,973

Stockholder's equity                                                     16,496            17,555
                                                                     ==========        ==========
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                           $  182,387        $  178,528
                                                                     ==========        ==========
</TABLE>

                       See notes to financial statements.


                                       3

<PAGE>

                              THE FONDA GROUP, INC.
                            STATEMENTS OF OPERATIONS
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                 Thirteen Weeks Ended                Thirty-nine Weeks Ended
                                            --------------------------------     --------------------------------
                                              June 27,          July 26,           June 27,          July 26,
                                                 1999              1998               1999              1998
                                            --------------    --------------     --------------    --------------
<S>                                              <C>               <C>               <C>               <C>
Net sales                                        $ 68,242          $ 67,887          $ 196,369         $ 200,826
Cost of goods sold                                 59,000            54,989            166,934           164,989
                                            --------------    --------------     --------------    --------------
     Gross profit                                   9,242            12,898             29,435            35,837
Selling, general and
  administrative expenses                           6,961             8,447             22,478            25,880
Other income, net                                    (524)           (5,299)              (698)          (14,707)
                                            --------------    --------------     --------------    --------------
     Income from operations                         2,805             9,750              7,655            24,664
Interest expense, net                               3,079             2,855              8,876             9,070
                                            --------------    --------------     --------------    --------------
     Income (loss) before income taxes               (274)            6,895             (1,221)           15,594
Income tax provision (benefit)                       (113)            2,722               (503)            6,376
                                            --------------    --------------     --------------    --------------
     Net income (loss)                             $ (161)          $ 4,173             $ (718)          $ 9,218
                                            ==============    ==============     ==============    ==============
</TABLE>

                       See notes to financial statements.


                                       4
<PAGE>

                              THE FONDA GROUP, INC.
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                             Thirty-nine Weeks Ended
                                                                      -----------------------------------
                                                                          June 27,            July 26,
                                                                            1999                1998
                                                                      --------------       --------------
Operating activities:
<S>                                                                        <C>                 <C>
 Net income (loss)                                                         $ (718)             $ 9,218
Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
   Depreciation and amortization                                            4,864                4,665
   Provision for doubtful accounts                                            106                  317
   Deferred income taxes                                                    1,343                 (850)
   Net gain on business and equipment dispositions
     and settlement of long-term contract                                     (91)             (16,175)
   Changes in assets and liabilities:
      Accounts receivable                                                     308                1,829
      Due from affiliates                                                  (8,141)               3,416
      Inventories                                                          (1,236)               7,108
      Other current assets                                                 (1,455)              (1,260)
      Accounts payable and accrued expenses                                 1,411                  841
      Other                                                                  (651)                (740)
                                                                      ------------         -----------
    Net cash provided by (used in) operating activities                    (4,260)               8,369
                                                                      ------------         -----------
Investing activities:
 Capital expenditures                                                     (11,524)             (5,018)
 Proceeds from equipment dispositions                                         382                 795
 Proceeds from business disposition                                             -              33,738
 Payments for business acquisitions                                             -              (6,901)
 Payment for Management Services Agreement                                      -              (7,000)
                                                                      ------------         -----------
   Net cash provided by (used in) investing activities                    (11,142)             15,614
                                                                      ------------         -----------
Financing activities:
 Net increase (decrease) in revolving credit borrowings                     7,938              (8,049)
 Repayments of long-term debt                                                (406)               (476)
 Redemption of common stock                                                     -              (1,436)
                                                                      ------------         -----------
   Net cash provided by (used in) financing activities                      7,532              (9,961)
                                                                      ------------         -----------
Net increase (decrease) in cash                                            (7,870)             14,022
Cash, beginning of period                                                   8,262               2,339
                                                                      ============         ===========
Cash, end of period                                                         $ 392            $ 16,361
                                                                      ============         ===========
Supplemental cash flow information: Cash paid during the period for:
   Interest                                                               $ 6,183              $ 6,145
   Income taxes, net of refunds                                           $ 1,632              $ 4,603
</TABLE>

                       See notes to financial statements.


                                       5
<PAGE>

                              THE FONDA GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.       BASIS OF PRESENTATION

         The information  included in the foregoing interim financial statements
of The Fonda Group,  Inc. (the  "Company")  are unaudited but, in the opinion of
management,  include  all  adjustments  (consisting  only  of  normal  recurring
adjustments  and  accruals)  which the Company  considers  necessary  for a fair
presentation  of the operating  results for these  periods.  Results for interim
periods are not  necessarily  indicative  of results for the entire year.  These
condensed financial  statements should be read in conjunction with the Company's
financial  statements and notes thereto  included in the Company's annual report
on Form 10-K for the fiscal year ended July 26, 1998 and its  transition  report
on Form 10-Q for the nine week period ended September 27, 1998.  Certain amounts
for  prior  periods  have been  reclassified  to  conform  with  current  period
presentation.

         As a  result  of a  change  in the  Company's  fiscal  year  end from a
fifty-two  or  fifty-three  week period which ends on the last Sunday in July to
the same weekly periods which end on the last Sunday in September, the quarterly
comparisons in this report are between the thirteen and thirty-nine week periods
ended June 27, 1999 and July 26, 1998.

2.  INVENTORIES

         Inventories consist of the following (in thousands):

                                                June 27,           July 26,
                                                   1999               1998
                                                -------           ---------
     Raw materials and supplies                $ 20,413           $ 15,663
     Work-in-process                                289                194
     Finished goods                              17,753             18,946
                                               ========           ========
                                               $ 38,455           $ 34,803
                                               ========           ========

3.  ACCOUNTS PAYABLE

         Net cash overdrafts are reclassified to accounts  payable.  At June 27,
1999, $2.6 million of such overdrafts were included in accounts payable.

4.  OTHER INCOME, NET

         On March  24,  1998,  the  Company  consummated  an  agreement  to sell
substantially all of the fixed assets and certain related working capital of its
Natural Dam tissue mill. In addition,  on July 1, 1998, the Company  consummated
an agreement  with the owner of the  co-generation  facility at the mill whereby
the owner of such facility terminated its obligation to supply steam to the mill
and to make certain land lease payments. As a result of these transactions,  the
Company  realized net proceeds of $37.5 million,  including a $3.7 million note,
and recorded a gain of $15.9 million, which was included in other income, net.

5.  RELATED PARTY TRANSACTIONS

         In December 1998, the Company entered into an Exclusive Manufacture and
Supply  Agreement  (the  "Manufacture  and  Supply   Agreement")  with  Creative
Expressions Group ("CEG"), an affiliate. Pursuant to such agreement, the Company
manufactures  and supplies  all of CEG's  requirements  for,  among other items,
disposable paper plates,  cups, napkins and tablecovers.  The Company sells such
manufactured  products to CEG in accordance  with a formula  based on cost.  Net
sales to CEG  during  the  thirty-nine  weeks  ended  June 27,  1999 were  $25.7
million.  Also in December 1998,  the Company  purchased  certain  manufacturing
assets from CEG for $4.9 million and entered into  operating  leases whereby the
Company leases to CEG certain  non-manufacturing  assets for annual lease income
of $.1 million.  Independent  appraisals were obtained to determine the fairness
of both the purchase  price and lease terms.  The Company  believes the terms on
which  it (i)  manufactures  and  supplies  products  for  CEG,

                                       6
<PAGE>

(ii) purchased manufacturing assets from CEG, and (iii) leased non-manufacturing
assets to CEG are at least as  favorable  as those it could have  obtained  from
unrelated third parties and were negotiated on an arm's length basis.

         In  December   1998,   the  Company   purchased   certain  paper  plate
manufacturing assets from Sweetheart Holdings Inc. ("Sweetheart"), an affiliate,
for $2.4  million.  In  February  1999,  the  Company  entered  into a five year
operating  lease with  Sweetheart,  whereby the Company leases certain paper cup
manufacturing  assets to  Sweetheart  with a net book value of $1.3  million for
annual lease  income of $.2 million.  Independent  appraisals  were  obtained to
determine  the fairness of both the purchase  price and lease terms.  During the
thirty-nine  weeks ended June 27, 1999,  the Company  purchased  $4.0 million of
paper cups from  Sweetheart and sold $1.4 million of paper plates to Sweetheart.
The Company  believes  the terms on which it (i) sold  product to, or  purchased
product from, Sweetheart,  (ii) purchased  manufacturing assets from Sweetheart,
and (iii) leases manufacturing assets to Sweetheart are at least as favorable as
those it could have obtained from unrelated third parties and were negotiated on
an arm's length basis.


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

         The following  discussion  for The Fonda Group,  Inc.  (the  "Company")
contains  forward-looking  statements  as  defined  by  the  Private  Securities
Litigation  Reform Act of 1995.  These  forward-looking  statements are based on
management's  current  expectations  and  involve a number of known and  unknown
risks and  uncertainties  that could cause the actual  results,  performance  or
achievements of the Company to be materially different from those anticipated in
these forward-looking  statements. Such risks and uncertainties include, but are
not limited to, the highly  competitive  nature of the  industry,  raw  material
costs and  fluctuations  in demand  for the  Company's  products  due in part to
general economic and business conditions.

         As a result of the change in the fiscal  year-end from the fifty-two or
fifty-three week period which ends on the last Sunday in July to the same weekly
periods  which  ends  on  the  last  Sunday  in  September,  the  quarterly  and
year-to-date  comparisons are between the thirteen and thirty-nine  week periods
ended June 27, 1999 (the "1999  Thirteen Week Period" and the "1999  Thirty-nine
Week Period") and the same number of week periods ended July 26, 1998 (the "1998
Thirteen Week Period" and the "1998  Thirty-nine Week Period. In the thirty-nine
week comparison,  sales in the four week period in October (which is included in
the 1999  Thirty-nine  Week  Period)  would  expect to be higher,  primarily  in
seasonal  and party goods  products,  than such sales in the four week period in
July (which is included in the 1998  Thirty-nine  Week Period).  In the thirteen
week  comparison,  the  seasonality  effect is reduced as sales in the four week
period  in  April  (which  is  included  in  the  1999   Thirteen  Week  Period)
historically  have not been  materially  different  than  those in the four week
period in July (which is included in the 1998 Thirteen Week Period).

         The Company,  a wholly owned subsidiary of SF Holdings Group, Inc. ("SF
Holdings"),  is a  converter  and  marketer  of  disposable  paper food  service
products.  The  price  of  SBS  paperboard,  one of the  Company's  primary  raw
materials,  historically fluctuates.  These fluctuations are generally passed on
to customers through price increases or reductions.  However, in the short term,
the Company is at risk of margin  erosion.  The severity of such margin  erosion
depends on various  factors  including  inventory  levels at the time of a price
change,  the timing and  frequency of such price  changes,  and the lead and lag
time that generally  accompanies  the  implementation  of both raw materials and
subsequent selling price changes.

         The  Company's  business  is  moderately  seasonal  as away  from  home
consumption of disposable  products  increases in the late spring and summer and
party  goods  sales  peek in the fall  for  holiday  seasons.  This  results  in
disproportional  higher net income during these peek periods as cost  absorption
improves resulting from a more profitable sales and production mix.

         In connection  with the License  Agreement (as  described  below),  the
Company and Creative  Expressions Group ("CEG"),  an affiliate,  entered into an
Exclusive  Manufacture and Supply  Agreement in December 1998 (the  "Manufacture
and  Supply  Agreement"  and  together  with  the  License  Agreement  the  "CEG
Agreements").  Pursuant to the  Manufacture  and Supply  Agreement,  the Company
manufactures  and supplies  all of CEG's  requirements  for,  among other items,
disposable paper plates,  cups, napkins and tablecovers.  The Company sells such
manufactured  products to CEG in  accordance  with a formula  based on cost,  as
defined in such agreement.  The Company believes

                                       7
<PAGE>

that  such  agreement  will  enable  it  to  increase  the  utilization  of  its
manufacturing  capacity.  Pursuant to the License Agreement,  CEG has the right,
among other things, to distribute certain products previously distributed by the
Company and in exchange therefor,  the Company receives a royalty of 5% of CEG's
cash  flow  as  determined  in  accordance  with a  formula  specified  in  such
agreement.

Recent Developments

         The Company is engaged in an extensive program to improve manufacturing
efficiencies and upgrade production  capabilities,  which includes,  among other
things,  the full  implementation  of the Manufacture  and Supply  Agreement and
further   consolidation  of  its   manufacturing   operations  (the  "Efficiency
Initiatives").  This  program  has and will  continue  to result in  incremental
expenses  arising  from  start-up,  training and other  related  expenses and is
expected  to be  substantially  complete  by  the  end of the  fiscal  year.  In
connection  with the Efficiency  Initiatives,  (i) in December 1998, the Company
purchased certain paper plate manufacturing assets from Sweetheart Holdings Inc.
("Sweetheart"),  an affiliate,  for $2.4 million and (ii) in February  1999, the
Company  entered into a five year  operating  lease  whereby the Company  leases
certain paper cup manufacturing assets to Sweetheart.

          Results of Operations

<TABLE>
<CAPTION>
                                         Thirteen Weeks Ended                         Thirty-nine Weeks Ended
                              --------------------------------------------  ------------------------------------------
                                June 27, 1999          July 26, 1998          June 27, 1999          July 26, 1998
                              -------------------   --------------------    -------------------   --------------------
                                           % of                  % of                   % of                   % of
                                           Net                    Net                    Net                    Net
                                Amount    Sales       Amount     Sales       Amount     Sales       Amount     Sales
                              ----------- -------   ----------- --------    ---------- --------   ----------- --------
                                                                (Dollars in millions)
<S>                               <C>      <C>          <C>       <C>         <C>        <C>         <C>        <C>
Net sales                         $ 68.2   100.0 %      $ 67.9    100.0 %     $ 196.4    100.0 %     $ 200.8    100.0%
Cost of goods sold                  59.0    86.5          55.0     81.0         166.9     85.0         165.0     82.2
                              ----------- -------   ----------- --------    ---------- --------   ----------- --------
Gross profit                         9.2    13.5          12.9     19.0          29.4     15.0          35.8     17.8
Selling, general and
  administrative expenses            7.0    10.2           8.4     12.4          22.5     11.4          25.9     12.9
Other income, net                   (0.5)   (0.8)         (5.3)    (7.8)         (0.7)    (0.4)        (14.7)    (7.3)
                                          -------               --------
                              ----------- -------   ----------- --------    ---------- --------   ----------- --------
Income from operations               2.8     4.1           9.8     14.4           7.7      3.9          24.7     12.3
Interest expense, net                3.1     4.5           2.9      4.2           8.9      4.5           9.1      4.5
                              ----------- -------   ----------- --------    ---------- --------   ----------- --------
Income (loss) before taxes          (0.3)   (0.4)          6.9     10.2          (1.2)    (0.6)         15.6      7.8
Income tax provision (benefit)      (0.1)   (0.2)          2.7      4.0          (0.5)    (0.3)          6.4      3.2
                              ----------- -------   ----------- --------    ---------- --------   ----------- --------

Net income (loss)                 $ (0.2)   (0.2)%       $ 4.2      6.1 %      $ (0.7)    (0.4)%       $ 9.2      4.6%
                              =========== =======   =========== ========    ========== ========   =========== ========
</TABLE>

Thirteen  Weeks  Ended June 27, 1999  Compared to Thirteen  Weeks Ended July 26,
1998

         Net sales were $68.2 million in the 1999 Thirteen Week Period and $67.9
million in the 1998  Thirteen  Week  Period.  Net sales of party goods  products
decreased 3.0%, primarily due to the CEG Agreements. Such agreements resulted in
a  significant  increase in volume  which was more than offset by a  significant
reduction in selling prices.  The lower selling prices reflect cost savings from
the  License  Agreement  as well as savings  that the  Company is  beginning  to
realize  and  expects  to  realize  more  fully  in  future  periods  upon  full
implementation  of the  Manufacture and Supply  Agreement.  Excluding such party
goods products,  net sales in the consumer market decreased 3.1%, resulting from
an  increase  in sales  volume of 5.2%,  which  was more  than  offset by a 7.9%
decrease in average selling prices. Selling prices in this market were adversely
affected  by  reductions  in raw  material  costs  that were  passed  through to
customers as well as more competitive  market  conditions.  In the institutional
market, net sales increased 3.2%,  resulting from an increase in sales volume of
8.1%,  which was partially  offset by a 4.5% decrease in average selling prices.
The increased sales volume in the  institutional  market was primarily due to an
increase in sales of value added converted tissue products and certain commodity
paperboard  products.  The  reduction  in  selling  prices  was due to the  same
conditions experienced in the consumer market.

         Gross  profit was $9.2  million in the 1999  Thirteen  Week  Period and
$12.9 million in the 1998  Thirteen  Week Period.  As a percentage of net sales,
gross profit  decreased  from 19.0% in the 1998 Thirteen Week Period to 13.5% in
the 1999  Thirteen  Week Period.  Gross margins in the 1999 Thirteen Week Period
were adversely  affected by reduced  selling prices of party goods products sold
to CEG, described above,  margin erosion in commodity

                                       8
<PAGE>

paperboard  products,  as well as excess  costs  incurred  in  implementing  the
Efficiency Initiatives.  Gross margins are expected to improve in future periods
upon  full  implementation  of the  Efficiency  Initiatives,  and as a result of
recent  price  increases  in various  product  lines,  however,  there can be no
assurance that such improvements will occur.

         Selling,  general and administrative  expenses were $7.0 million in the
1999 Thirteen Week Period and $8.4 million in the 1998 Thirteen Week Period.  As
a  percentage  of  net  sales,  selling,  general  and  administrative  expenses
decreased  from  12.4% in the 1998  Thirteen  Week  Period  to 10.2% in the 1999
Thirteen  Week Period.  The decrease as a percentage  of net sales was primarily
caused by the reduction of selling, marketing and distribution costs in the 1999
Thirteen Week Period due to the License Agreement,  as well as the closure of an
administrative office

         Other  income,  net in the 1998  Thirteen  Week Period  includes a $6.6
million  pre-tax  gain  primarily  due to the July  1998  settlement  of a steam
contract  related to the  Company's  tissue mill  operations.  The 1998 gain was
partially  offset  by  closure  cost  accruals  relating  to the  closure  of an
administrative office.

         Income  from  operations  was $2.8  million in the 1999  Thirteen  Week
Period and $9.8 million in the 1998  Thirteen  Week Period  primarily due to the
reasons discussed.

         Interest  expense,  net of interest income was $3.1 million in the 1999
Thirteen Week Period and $2.9 million in the 1998 Thirteen Week Period due to an
increase in outstanding debt in the 1999 period.

         As a result  of the  above,  the net loss was $.2  million  in the 1999
Thirteen Week Period compared to net income of $4.2 million in the 1998 Thirteen
Week Period.

Thirty-nine  Weeks Ended June 27, 1999 Compared to Thirty-nine  Weeks Ended July
26, 1998

         Net sales were $196.4 million in the 1999  Thirty-nine  Week Period and
$200.8 million in the 1998  Thirty-nine  Week Period.  The 1998 Thirty-nine Week
Period  included $8.4 million of net sales of tissue mill  products  relating to
operations that were sold in March 1998.  Excluding such tissue mill sales,  net
sales in the converting  operations  increased $4.0 million due primarily to the
effects of seasonality on the thirty-nine  week  comparison.  Net sales of party
goods  products  increased  5.4%  primarily  due to  the  CEG  Agreements.  Such
agreements  resulted in a  significant  increase in volume which was offset by a
significant  reduction in selling prices.  The lower selling prices reflect cost
savings  from the  License  Agreement  as well as  savings  that the  Company is
beginning  to realize and expects to realize  more fully in future  periods upon
full  implementation  of the  Manufacture and Supply  Agreement.  Excluding such
party goods products,  net sales in the consumer market decreased .8%, resulting
from an increase in sales  volume of 6.2%,  which was more than offset by a 6.6%
decrease in average selling prices. Selling prices in this market were adversely
affected  by  reductions  in raw  material  costs  that were  passed  through to
customers as well as more competitive  market  conditions.  In the institutional
market, net sales increased 3.4%,  resulting from an increase in sales volume of
5.7%,  which was partially  offset by a 2.1% decrease in average selling prices.
The increased sales volume in the  institutional  market was primarily due to an
increase in sales of value added converted tissue products and certain commodity
paperboard  products.  The  reduction  in  selling  prices  was due to the  same
conditions experienced in the consumer market.

         Gross profit was $29.4 million in the 1999  Thirty-nine Week Period and
$35.9 million in the 1998 Thirty-nine  Week Period,  including $1.2 million from
the Company's tissue mill operations. As a percentage of net sales, gross profit
decreased  from 17.9% in the 1998  Thirty-nine  Week Period to 15.0% in the 1999
Thirty-nine Week Period.  Gross margins in the 1999 Thirty-nine Week Period were
adversely  affected by reduced  selling prices of consumer  products,  described
above, margin erosion in commodity paperboard products,  as well as excess costs
incurred in implementing the Efficiency Initiatives.  Gross margins are expected
to  improve  in  future  periods  upon  full  implementation  of the  Efficiency
Initiatives, and as a result of recent price increases in various product lines,
however, there can be no assurance that such improvements will occur.

         Selling,  general and administrative expenses were $22.5 million in the
1999  Thirty-nine  Week Period and $25.9  million in the 1998  Thirty-nine  Week
Period.  As a  percentage  of net sales,  selling,  general  and  administrative
expenses  decreased from 12.9% in the 1998  Thirty-nine  Week Period to 11.4% in
the 1999 Thirty-nine Week Period.  The decrease as a percentage of net sales was
primarily caused by the reduction of selling,  marketing and distribution  costs
due to the  License  Agreement,  as well  as the  closure  of an  administrative
office. Such decrease was

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<PAGE>

partially  offset by the sale of the tissue mill  operation,  for which selling,
general and administrative costs were low relative to net sales.

         Other income,  net in the 1998 Thirty-nine Week Period includes a $15.9
million  pre-tax  gain on the  March  1998  sale of the  Company's  tissue  mill
operations  and the July 1998  settlement  of a steam  contract  related to such
operations.  The gain was partially offset by closure cost accruals  relating to
the decision to close an administrative office.

         Income from  operations was $7.7 million in the 1999  Thirty-nine  Week
Period and $24.7 million in the 1998  Thirty-nine Week Period due to the reasons
discussed.

         Interest  expense,  net of interest income was $8.9 million in the 1999
Thirty-nine Week Period and $9.1 million in the 1998 Thirty-nine Week Period.

         As a result  of the  above,  the net loss was $.7  million  in the 1999
Thirty-nine  Week  Period  compared  to net  income of $9.2  million in the 1998
Thirty-nine Week Period.

Liquidity and Capital Resources

         Historically,  the Company has relied on cash flows from operations and
borrowings to finance its working capital requirements, capital expenditures and
acquisitions.

         Net cash used in  operating  activities  in the 1999  Thirty-nine  Week
Period was $4.3 million  compared to $8.4 million provided by such activities in
the 1998  Thirty-nine  Week Period.  The reduction in cash provided by operating
activities  is  primarily  due to the  build-up in amounts due from  affiliates,
resulting from the implementation of the CEG Agreements, and to a lesser extent,
due  to  lower  earnings.   In  March  1999,  CEG's  second  largest   customer,
representing  over 10% of CEG's net sales during its 1998 fiscal  year,  filed a
Chapter 11  bankruptcy  petition.  Based on  information  provided  by CEG,  the
Company has no reason to believe that the foregoing will have a material adverse
effect  on its  results  of  operations  or  financial  condition.  However,  no
assurance can be given  regarding the ultimate  effect,  if any, on the Company,
and it will continue to monitor the adequacy of its affiliate reserve.

         Capital  expenditures  were $11.5 million,  which included $9.7 million
for converting equipment,  primarily associated with its Efficiency Initiatives,
and the remaining  expenditures were primarily for routine capital improvements.
See Note 5 of Notes to Financial Statements.

         The Company's revolving credit facility,  which matures on September 1,
2001,  as  amended,   provides  up  to  $50  million  borrowing   capacity,   is
collateralized   by  accounts   receivable  and  inventories,   certain  general
intangibles  and the proceeds on the sale of accounts  receivable and inventory.
At June 27, 1999,  there was $7.9 million  outstanding and $35.0 million was the
maximum advance available based upon eligible collateral.

         The  Company  has  reinvested  in  equipment,  amounts in excess of $10
million from the sale of the tissue mill,  within the required  time period,  in
accordance  with the asset  sale  covenant  under the  indenture  governing  the
Company's senior debt.

         During the  thirty-nine  weeks ended June 27, 1999, the Company did not
incur material costs for compliance with environmental law and regulations.

         The Company  believes that cash generated by operations,  combined with
amounts  available under the revolving  credit  facility,  will be sufficient to
meet  the  Company's  working  capital  and  capital  expenditure  needs  in the
foreseeable future.

Year 2000

         Many of the Company's  computer  systems may be unable to process dates
beyond   December   31,  1999.   This  could   result  in  system   failures  or
miscalculations  which  could have a material  adverse  effect on the  Company's
business,  financial  condition  or  results  of  operations.  The  Company  has
implemented a Year 2000 compliance

                                       10
<PAGE>

program  intended to identify  the programs  and  infrastructures  that could be
effected by Year 2000 issues and to resolve the problems that are  identified on
a timely basis.

         The  Company  has  completed  the  assessment  phase,  in  which it has
identified  potential  Year  2000  issues,   including  those  with  respect  to
information technology systems, technology embedded within equipment the Company
uses as well as equipment that  interfaces with vendors and other third parties.
The Company has also completed the upgrade of its hardware and software  systems
which  run  most  of  its  data  processing  and  financial  reporting  software
applications and has  consolidated  certain of its in-house  developed  computer
systems into the  upgraded  systems.  In addition,  the Company has upgraded its
telephone,  data  communication and network systems to ensure that they are Year
2000 compliant.  Embedded logic in  manufacturing  equipment is all being tested
and upgraded. Contingency plans are being developed for equipment that cannot be
upgraded.  The  embedded  logic  project is expected to be  completed by October
1999. EDI trading  partners and other key business  partners have been contacted
to ensure that key  business  transactions  will be Year 2000  compliant.  As of
August 1, 1999, the Company has received detailed business plans and commitments
from the majority of these parties that they are or will be Year 2000 compliant.
Contingency  plans  are being  developed  to work with  trading  partners  or to
replace suppliers who cannot meet our compliance deadlines.  The Company expects
that its business  systems will be Year 2000  compliant,  but it may  experience
isolated  incidences of non-compliance and potential outages with respect to its
information  technology  infrastructure.  The Company plans to allocate internal
resources to be ready to take action  should these events  occur.  Investors are
cautioned,  however,  that the Company's  assessment of its  compliance,  of the
costs of performing the program and the risks attendant thereto, and of the need
for any  contingency  plans may change  materially  in the future as the Company
proceeds further with its compliance program.

         As of August 1, 1999, the Company  estimates the total cost of its Year
2000 program at $3.2 million,  of which $2.7 million has been spent through
June 27, 1999,  including  $1.5 million in the 1999  Thirty-nine  Week Period.
Expenditures  have  been  and are  expected  to be  funded  by cash  flows  from
operations,  available cash,  borrowings under the Company's credit facility, or
by lease. However,  there can be no assurance that the Company will identify all
Year 2000 issues in its computer  systems in advance of their occurrence or that
it will be able to successfully remedy all problems that are discovered. Failure
by the Company  and/or its  significant  vendors and  customers to complete Year
2000 compliance programs in a timely manner could have a material adverse effect
on the Company's  business,  financial  condition or results of  operations.  In
addition,  the revenue stream and financial  stability of existing customers may
be adversely  impacted by Year 2000 problems which could cause  fluctuations  in
the Company's revenues and operating profitability.

                                       11
<PAGE>

PART II - OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)       Exhibits:

          27.1      Financial Data Schedule.


(b)       No reports on Form 8-K were filed in the thirteen weeks ended
          June 27, 1999.



                                   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, thereto duly authorized.

     Date:  August 11, 1999

                                            THE FONDA GROUP, INC.



                                            By: /s/ HANS H. HEINSEN
                                               -------------------------------
                                                    Hans H. Heinsen
                                            Senior Vice President,
                                              Chief Financial
                                            Officer and Treasurer
                                              (Principal Financial
                                              And Accounting Officer)