================================================================================

                        SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)

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

    For the quarterly period ended March 31, 2001

                                       OR

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

    For the transition period from ___________________ to ___________________

                         Commission file number: 0-30002

                             RAVENSWOOD WINERY, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

               California                                94-3026706
     (State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
     Incorporation or Organization)

           18701 Gehricke Road
           Sonoma, California                                   95476
(Address of Principal Executive Offices)                     (Zip Code)

                     Issuer's Telephone Number: 707-938-1960

Check  whether  the  registrant  (1) 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 [ ]

The number of shares outstanding of the Issuer's Common Stock on May 7, 2001 was
4,876,067.

Transitional Small Business Disclosure Format: Yes [ ] No [X]


================================================================================



<PAGE>

<TABLE>
                                                  RAVENSWOOD WINERY, INC.

                                                PART I. FINANCIAL INFORMATION

                                                                                                              Page
                                                                                                              ----
<S>                                                                                                           <C>
ITEM 1.       FINANCIAL STATEMENT

    Balance Sheets as of March 31, 2001 and June 30, 2000.                                                    3

    Statements of Income for the three months and nine months ended March 31,
     2001 and 2000.                                                                                           4

    Statements of Cash Flows for the three months and nine months ended March
     31, 2001 and 2000.                                                                                       5

    Notes to Financial Statements.                                                                            6

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS                                                             8

ITEM 3.       FACTORS THAT MAY AFFECT FUTURE RESULTS                                                         16

                                                PART II. OTHER INFORMATION

ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS                                                      21

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K                                                               21



</TABLE>

                                       2
<PAGE>

                                          RAVENSWOOD WINERY, INC.
                                       PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements
<TABLE>

                                          RAVENSWOOD WINERY, INC.
                                               BALANCE SHEET
<CAPTION>

                                                                             March 31,          June 30,
                                                                               2001               2000
                                                                          ----------------   ----------------
                                 ASSETS                                     (unaudited)
<S>                                                                           <C>                <C>
Current assets:
 Cash and cash equivalents                                                    $ 6,074,776        $ 5,769,373
 Accounts receivable, less allowance of $10,000                                 5,392,293          4,166,816
 Inventories                                                                   26,640,342         20,521,284
 Prepaid expenses                                                                 411,511            377,631
                                                                          ----------------   ----------------
     Total current assets                                                      38,518,922         30,835,104
 Property, plant and equipment, net                                            14,382,850         14,787,553
 Note receivable from shareholder                                                 310,000            310,000
 Deferred tax assets                                                              273,000            180,000
 Other assets                                                                      72,802             60,433
                                                                          ----------------   ----------------
                                                                              $53,557,574        $46,173,090
                                                                          ================   ================

                  LIABILITIES AND SHAREHOLDER' EQUITY

Current liabilities:
 Current portion of long-term debt                                            $    73,118        $    83,597
 Current portion of capital lease obligations                                     723,177            617,979
 Short-term borrowings                                                                  -            500,000
 Accounts payable                                                               4,834,431          3,217,036
 Accrued commissions                                                              624,498            514,379
 Accrued liabilities                                                              899,775            390,010
                                                                          ----------------   ----------------
     Total current liabilities                                                  7,154,999          5,323,001

Long-term liabilities:
 Long-term debt, net                                                            6,850,869          6,453,407
 Capital lease obligations, net                                                 2,282,857          2,392,497
 Convertible debentures                                                         1,562,500          1,687,500
 Deferred tax liability                                                           124,000                  -
                                                                          ----------------   ----------------
     Total liabilities                                                         17,975,225         15,856,405
                                                                          ----------------   ----------------

Shareholders' equity:
 Preferred stock, no par value; 1 million shares authorized, none issued                -                  -
 Common stock, no par value; 20 million shares authorized,
  4,876,067 and 4,856,779 issued and outstanding                               15,262,226         15,054,373
 Retained earnings                                                             20,215,120         15,176,560
 Unrealized gain on available-for-sale securities                                 105,003             85,752
                                                                          ----------------   ----------------
     Total shareholders' equity                                                35,582,349         30,316,685
                                                                          ----------------   ----------------
                                                                              $53,557,574        $46,173,090
                                                                          ================   ================

<FN>

                             See accompanying notes to financial statements.

</FN>
</TABLE>

                                       3
<PAGE>

<TABLE>

                                             RAVENSWOOD WINERY, INC.
                                              STATEMENT OF INCOME
                                                  (UNAUDITED)

<CAPTION>

                                         Three months ended March 31,               Nine months ended March 31,
                                     -------------------------------------      ------------------------------------
                                           2001                2000                   2001               2000
                                     ------------------  -----------------      -----------------  -----------------


<S>                                        <C>                <C>                   <C>                 <C>
Gross Sales                                $ 9,720,088        $ 8,692,139           $ 30,686,303        $27,418,528
  Less excise taxes                           (201,757)          (325,967)              (774,033)          (859,657)
  Less discounts, allowances
   and returns                                (289,115)          (239,319)            (1,075,551)          (816,243)
                                     ------------------  -----------------      -----------------  -----------------

Net sales                                    9,229,216          8,126,853             28,836,719         25,742,628

Cost of goods sold                           4,233,459          3,897,343             13,187,659         12,174,519
                                     ------------------  -----------------      -----------------  -----------------

Gross profit                                 4,995,757          4,229,510             15,649,060         13,568,109

Operating expenses                           2,212,408          1,831,691              6,833,304          5,573,023
                                     ------------------  -----------------      -----------------  -----------------

Operating income                             2,783,349          2,397,819              8,815,756          7,995,086

Interest expense                              (253,267)          (237,883)              (755,626)          (594,327)
Other income (expenses)                         (4,628)            32,514                224,430            190,590
                                     ------------------  -----------------      -----------------  -----------------
                                              (257,895)          (205,369)              (531,196)          (403,737)

Income before income taxes                   2,525,454          2,192,450              8,284,560          7,591,349

Provision for income taxes                     960,000            875,000              3,246,000          2,996,130
                                     ------------------  -----------------      -----------------  -----------------

Net income                                 $ 1,565,454        $ 1,317,450            $ 5,038,560        $ 4,595,219
                                     ==================  =================      =================  =================


Earnings per share:
  Basic                                    $      0.32        $      0.27            $      1.04        $      0.99
                                     ==================  =================      =================  =================
  Diluted                                  $      0.31        $      0.27            $      1.00        $      0.94
                                     ==================  =================      =================  =================


Weighted average number of
  common shares outstanding:
    Basic                                    4,870,896          4,855,053              4,866,206          4,664,947
                                     ==================  =================      =================  =================
    Diluted                                  5,105,914          5,008,985              5,100,828          5,007,370
                                     ==================  =================      =================  =================

<FN>

                                    See accompanying notes to financial statements.
</FN>
</TABLE>



                                       4
<PAGE>

<TABLE>


                                                       RAVENSWOOD WINERY, INC.
                                                       STATEMENT OF CASH FLOWS
                                                             (UNAUDITED)
<CAPTION>

                                                       Three months ended March 31,          Nine months ended March 31,
                                                     ---------------------------------      ------------------------------
                                                           2001             2000                2001            2000
                                                     ----------------- ---------------      --------------  --------------
<S>                                                       <C>             <C>                 <C>             <C>
Operations:
Net income                                                $ 1,565,454     $ 1,317,450         $ 5,038,560     $ 4,595,219
Items not requiring the current
 use of cash:
  Depreciation and amortization                               428,940         268,649           1,221,306         727,480
  Unrealized gain (loss) on available for sale securities      15,600          33,694              19,251          76,910
  Deferred income taxes                                       (84,000)              -              31,000           7,800
Changes in other operating items:
  Accounts receivable                                         166,202         108,649          (1,225,477)     (2,271,970)
  Inventories                                                 422,840         716,304          (6,119,058)     (4,662,033)
  Prepaid expenses                                            (67,576)        (34,052)            (33,879)       (240,251)
  Other assets                                                 (3,805)         (4,107)            (12,369)        (15,995)
  Accounts payable                                         (2,521,119)     (1,883,809)          1,617,395       1,089,384
  Accrued liabilities                                         205,154          99,962             509,765         307,205
  Accrued commissions                                         (62,046)        (70,788)            110,119         210,807
                                                     ----------------- ---------------      --------------  --------------
        Cash provided by (used for) operations                 65,644         551,952           1,156,613        (175,444)
                                                     ----------------- ---------------      --------------  --------------

Investing:
 Additions to plant & equipment                              (159,140)     (1,127,413)           (330,092)     (5,611,873)
                                                     ----------------- ---------------      --------------  --------------
        Cash used for investing activities                   (159,140)     (1,127,413)           (330,092)     (5,611,873)
                                                     ----------------- ---------------      --------------  --------------

Financing:
 Short-term borrowings, net                                         -               -            (500,000)       (700,000)
 Proceeds from long-term debt                                       -               -             455,000       2,252,036
 Proceeds from issuance of stock                               43,574               -              82,852               -
 Proceeds from sale of securities                                   -               -                   -          12,947
 Repayments of long-term debt                                (213,465)       (118,251)           (558,970)       (276,586)
                                                     ----------------- ---------------      --------------  --------------
Cash provided by (used for) financing activities             (169,891)       (118,251)           (521,118)      1,288,397
                                                     ----------------- ---------------      --------------  --------------

Change in cash & cash equivalents                            (263,387)       (693,712)            305,403      (4,498,920)

Balance at beginning of period                              6,338,163       7,585,695           5,769,373      11,390,903
                                                     ----------------- ---------------      --------------  --------------

Balance at end of period                                  $ 6,074,776     $ 6,891,983         $ 6,074,776     $ 6,891,983
                                                     ================= ===============      ==============  ==============


Cash paid during the period for:
 Interest                                                 $   261,128     $   274,229         $   736,473     $   612,687
                                                     ================= ===============      ==============  ==============
 Taxes                                                    $ 1,160,000     $   740,000         $ 3,180,000     $ 2,995,000
                                                     ================= ===============      ==============  ==============

Noncash investing and financing:

 Plant and equipment purchased with
  long-term liabilities                                   $         -     $   185,759         $   486,511     $   805,353
                                                     ================= ===============      ==============  ==============

 Conversion of convertible debentures
  to common stock                                         $    62,500     $         -         $   125,000     $   815,000
                                                     ================= ===============      ==============  ==============

<FN>
                                           See accompanying notes to financial statements.
</FN>
</TABLE>
                                       5

<PAGE>

--------------------------------------------------------------------------------

                             RAVENSWOOD WINERY, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Basis of presentation:

The  financial  statements  included  herein for  Ravenswood  Winery,  Inc. (the
"Company")  have been  prepared by the Company,  without  audit  pursuant to the
rules and regulations of the Securities and Exchange Commission. In management's
opinion,  the interim financial data presented  includes all adjustments  (which
include only normal recurring  adjustments)  necessary for a fair  presentation.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to such rules and regulations.

The results of operations for the three-month and nine-month periods ended March
31, 2001 are not necessarily  indicative of the operating  results  expected for
the entire fiscal year. The financial  statements included herein should be read
in conjunction with other documents the Company files from time to time with the
Securities and Exchange Commission,  including the Company's Form 10-KSB for the
fiscal year ended June 30, 2000.

NOTE 2 - Significant accounting policies:

Use of estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at the date of the financial  statements,  and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results when ultimately realized could differ from those estimates.

Reclassification

Certain prior period amounts have been  reclassified  in order to conform to the
current period presentation.

NOTE 3 - Earnings per share

Basic EPS represents the income available to common shareholders  divided by the
weighted average number of common shares outstanding for the period. Diluted EPS
represents the income available to common  shareholders  divided by the weighted
average of common shares  outstanding  while also giving effect to the potential
dilution that could occur if securities or other contracts to issue common stock
(e.g.  stock options and  convertible  debentures)  were exercised and converted
into stock. For all periods presented,  the difference between basic and diluted
EPS  for  the  Company  is due to the  dilutive  effect  of  stock  options  and
convertible  debentures.  This effect is  calculated  using the  treasury  stock
method.

During the nine month period ended March 31, 2001,  6,450 shares of common stock
were purchased under  Ravenswood's  1999 Equity  Incentive Plan; 1,586 shares of
common stock were issued under the Company's  Employee  Stock  Purchase Plan and
debentures  with a face value of $125,000 were  converted  into 11,251 shares of
the Company's common stock.

                                        6

<PAGE>

NOTE 4 - Inventories:

Inventories are summarized as follows:       March 31,            June 30,
                                                2001                2000
                                            ------------        ------------
                                           (Unaudited)

Bulk wine                                   $ 21,500,213        $ 15,262,865
Bottled wine                                   4,487,664           4,716,701
Crop costs                                        82,807             137,051
Supplies                                         415,195             233,943
Tasting room merchandise                         154,463             170,724
                                            ------------        ------------
                                            $ 26,640,342        $ 20,521,284
                                            ============        ============

NOTE 5 - Property, plant and equipment:

Property, plant and equipment are summarized as follows:

                                             March 31,             June 30,
                                                2001                 2000
                                            -----------          -----------
                                            (Unaudited)

Land                                        $   245,135          $   245,135
Vineyards                                       345,473              345,473
Buildings and improvements                    1,647,634            1,647,637
Leasehold improvements                        9,844,563            9,832,748
Machinery and equipment                       1,211,580            1,080,251
Equipment held under capital leases           4,605,465            4,118,953
Office equipment                                336,768              298,837
Construction in progress                        145,435                    -
                                            -----------          -----------
                                             18,382,053           17,569,034
Less accumulated depreciation                 3,999,203            2,781,481
                                            -----------          -----------
                                            $14,382,850          $14,787,553
                                            ===========          ===========

NOTE 6 - Comprehensive income:

Comprehensive  income  includes  unrealized  gain  (loss) on  available-for-sale
securities.  The following is a reconciliation  of net income and  comprehensive
income (unaudited):

<TABLE>
<CAPTION>
                                                       Three months ended                     Nine months ended
                                                             March 31,                             March 31,
                                                       2001              2000                2001              2000
                                                    ----------        ----------          ----------        ----------

<S>                                                 <C>               <C>                 <C>               <C>
Net income                                          $1,565,454        $1,317,450          $5,038,560        $4,595,219
Change in unrealized gain (loss) on
  available-for-sale securities                         15,600             5,649              19,251            43,216
                                                    ----------        ----------          ----------        ----------
Comprehensive income                                $1,581,054        $1,323,099          $5,057,811        $4,638,435
                                                    ==========        ==========          ==========        ==========
</TABLE>

NOTE 7 - Subsequent events:

On April 10, 2001,  Ravenswood entered into an Agreement and Plan of Merger with
Constellation  Brands, Inc., pursuant to which Ravenswood would be merged with a
wholly-owned indirect subsidiary of Constellation Brands, Inc.

                                       7
<PAGE>

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

Forward-Looking Statements

This Report contains  forward-looking  statements  within the meaning of Section
27A of the  Securities  Act of 1933,  as amended  (the  "Securities  Act"),  and
Section 21E of the  Securities  Exchange Act of 1934, as amended (the  "Exchange
Act"),  regarding  future events and Ravenswood's  plans and  expectations  that
involve risks and uncertainties. When used in this Report, the words "estimate,"
"project,"  "intend,"  "expect" and  "anticipate"  and similar  expressions  are
intended  to identify  such  forward-looking  statements.  Such  statements  are
subject to certain risks and  uncertainties,  including those  discussed  below,
that could  cause  actual  results to differ  materially  from those  projected.
Factors that may cause actual  results to vary include,  but are not limited to:
(i) future and past weather and general farming conditions  affecting the annual
grape harvest;  (ii) variations in consumer taste and preference:  (iii) changes
in the wine  industry  regulatory  environment;  and (iv)  changes in the market
value of Ravenswood's  common stock.  Other factors that may cause or contribute
to such differences include, but are not limited to, those discussed below under
"Risk Factors," as well as those  discussed  elsewhere in this Report and in the
documents  incorporated  herein by reference.  In light of the important factors
that can materially affect results,  including those set forth in this paragraph
and below,  the inclusion of  forward-looking  information  herein should not be
regarded  as a  representation  by  Ravenswood  or any  other  person  that  the
objectives  or plans for  Ravenswood  will be achieved.  The reader is therefore
cautioned  not  to  place  undue  reliance  on  the  forward-looking  statements
contained herein, which speak only as of the date hereof.  Ravenswood undertakes
no obligation to publicly release updates or revisions to these statements

Overview

Ravenswood  produces,  markets and sells premium  California  wines  exclusively
under the Ravenswood brand name. The vast majority of wines produced and sold by
Ravenswood   are  red  wines,   including   Merlot,   Cabernet   Sauvignon  and,
particularly,  Zinfandel.  To a lesser extent,  Ravenswood produces white wines,
including  Chardonnay,  French  Colombard and  Gewurztraminer.  Ravenswood's red
wines  accounted for  approximately  94% of gross sales in the 2000 fiscal year,
with sales of Zinfandel accounting for approximately 65% of gross sales for that
period. Ravenswood believes that sales of its red wines, particularly Zinfandel,
will continue to account for a significant portion of its sales in the future.

Since its inception in 1976,  Ravenswood  has grown by increasing its production
volume and its  portfolio of wine  products.  For the fiscal year ended June 30,
2000,  Ravenswood  realized  total gross sales of $33.2 million from the sale of
412,866 cases of wine and Ravenswood branded merchandise.

The mix of products sold in any given period affects  Ravenswood's  gross profit
as a  percentage  of net sales,  or gross  margin.  In general,  as sales of the
value-priced  Vintners  Blend Series have  increased  as a  percentage  of gross
sales, Ravenswood's gross margin has decreased. However, Ravenswood has recently
realized  efficiencies in their production process for the Vintners Blend Series
which have improved  gross margin when  compared to periods of comparable  sales
mix.  The gross  margin for the  Vintners  Blend  Series  traditionally  is more
variable  than  that of  Ravenswood's  higher-priced  product  series  because a
significant  portion of the wine used in the Vintners  Blend series is purchased
in the bulk market rather than produced by Ravenswood  from grapes acquired from
its traditional  grape suppliers.  Ravenswood has entered into several bulk wine
purchase contracts with terms extending for one to two years. The price, quality
and available  quantity of bulk wine have  fluctuated in the past and Ravenswood
expects that they will continue to fluctuate in the future.

The timing for release of Ravenswood's products,  particularly its County Series
and Vineyard Designate Series, also significantly  affects Ravenswood's sales in
specific periods. Ravenswood traditionally releases new vintages of its Vineyard
Designate Series in the fourth fiscal quarter or the first fiscal quarter of the

                                       8
<PAGE>

subsequent  fiscal year. In addition,  the release dates of some of Ravenswood's
County Series wines  fluctuate  between the third and fourth fiscal  quarters of
each  fiscal  year.  The  timing  of  these  release  dates  is  based  upon the
winemakers'  determination  as to the optimal  flavor  characteristics  of these
wines and available inventory.  Fluctuation of release dates may make comparison
of  results  on a  period-to-period  basis  less  meaningful.  The nature of the
winemaking  process,  including  the  need  for  wine  to be aged  before  it is
released,  requires  Ravenswood  to  incur  significant  expenses  in  producing
products  which  may not  generate  revenues  until up to two years  later.  Any
factors that may prevent or delay the sale of  Ravenswood's  wines at the prices
anticipated at the time of their production could adversely affect its liquidity
and reduce its profits.

Pricing for grapes  purchased by Ravenswood is determined  annually by reference
to benchmark price quotations or through  negotiation.  As a result, the cost of
grapes used in  Ravenswood's  wine  production has fluctuated and is expected to
continue to fluctuate.  Ravenswood has  traditionally  attempted to moderate and
stabilize  price  increases  from  year to  year.  Consequently,  gross  margins
realized by Ravenswood  have fluctuated in the past and are expected to continue
to fluctuate with the price of grapes used in production.

Within the United States, Ravenswood utilizes distributors in every state except
California.  Brokers are used to assist the sales  effort in  California  and 31
other  states.  Ravenswood  uses both  brokers and  distributors  in most of the
foreign countries in which Ravenswood's wines are sold.

Brokers  act  as  an  independent   sales  force  and  receive   commissions  as
compensation for their sales.  Brokers do not take title to the wines they sell.
Distributors purchase wine from Ravenswood and sell the wine to their own retail
accounts such as restaurants, grocery stores and wine shops.

Ravenswood primarily uses smaller,  well-positioned brokers and distributors for
whom  Ravenswood  is a key brand.  Although  Ravenswood  has very few  long-term
agreements  for  distribution  of its  products,  Ravenswood  believes  that its
relationships with existing brokers and distributors are excellent. Ravenswood's
executive  management  also  takes  an  active  role in  assisting  brokers  and
distributors  with sales within  California and within major geographic  markets
outside California.

Ravenswood sells its products directly in California,  utilizing four warehouses
throughout  the  state  and a  network  of seven  brokers.  Ravenswood  realizes
significantly  greater  gross  margins in areas,  such as  California,  where it
relies  on  direct  sales  facilitated   through  brokers  without  the  use  of
distributors.  Sales  within  California  accounted  for  approximately  45%  of
Ravenswood's gross sales in the 2000 fiscal year. Of this amount,  approximately
8% of gross sales were  purchases by  California  and  non-California  consumers
through  Ravenswood's  tasting  room and  approximately  37% of gross sales were
sales to retail accounts.  We expect similar results for fiscal 2001. Ravenswood
believes that sales within California will continue to account for a substantial
portion of its sales in the future.

                                       9
<PAGE>


<TABLE>
Results of Operations

The  following  table sets forth items from  Ravenswood's  statement  of income,
expressed as a percentage of net sales, for the periods indicated:

<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                            March 31,                          March 31,
                                                            ---------                          ---------
Statement of Income Data:                             2000             2001              2000             2001
                                                      ----             ----              ----             ----
<S>                                                  <C>              <C>               <C>              <C>
Net Sales                                            100.0%           100.0%            100.0%           100.0%
Cost of Goods Sold                                    48.0             45.9              47.3             45.7
                                                     -----            -----             -----            -----
Gross Profit                                          52.0             54.1              52.7             54.3
Operating Expenses                                    22.5             23.9              21.6             23.7
                                                     -----            -----             -----            -----
Operating Income                                      29.5             30.2              31.1             30.6
Other Expense, net                                     2.5              2.8               1.6              1.8
                                                     -----            -----             -----            -----
Income Before Income Taxes                            27.0             27.4              29.5             28.8
Provision for Income Taxes                            10.8             10.4              11.6             11.3
                                                     -----            -----             -----            -----
Net Income                                            16.2%            17.0%             17.9%            17.5%
                                                     =====            =====             =====            =====
</TABLE>

Three Months Ended March 31, 2001 and 2000

Sales

Net sales of Ravenswood's products increased to $9.2 million in the three months
ended March 31,  2001,  from $8.1  million in the three  months  ended March 31,
2000.  This increase is primarily  attributable  to an increase in the volume of
wines produced and sold by Ravenswood. In the three months ended March 31, 2001,
case sales  increased to 120,306  cases from  106,249  cases in the three months
ended March 31, 2000, while the average gross price per case decreased to $80.37
from $81.28 in these  respective  periods due to a change in the mix of products
sold and a shift in the channel of distribution  with California sales remaining
constant and out-of-state sales increasing by over 18%. Because Ravenswood sells
their  wines  directly to retail  outlets and  restaurants  in  California,  the
average  price per case is higher than wine sold to  out-of-state  distributors.
Gross sales for  Vintners  Blend Series grew 14.9%,  while  County  Series sales
decreased  by 2.7% for the three months  ending March 31, 2001,  compared to the
three months ended March 31, 2000.  Vineyard Designate Series increased by 30.7%
for the period ended March 31, 2001 when compared to the third quarter of fiscal
2000 due to the  availability  of vineyard  designate wines for the three months
ending March 31, 2001.

The percentages of gross sales attributable to the Vintners Blend Series, County
Series and Vineyard Designate Series were 69.9%,  20.4% and 9.2%,  respectively,
for the three months ended March 31, 2001, as compared to 68.1%, 23.4% and 7.9%,
respectively,  in the three  months ended March 31,  2000.  Sales of  Ravenswood
branded  merchandise  accounted  for  approximately  .5% and .6% of gross sales,
respectively, for the three months ended March 31, 2001 and March 31, 2000.

Cost of Goods Sold

Cost of goods sold  increased to $4.2  million,  or 45.9% of net sales,  for the
three months ended March 31, 2001, from $3.9 million, or 48.0% of net sales, for
the three months  ended March 31, 2000.  The decrease in cost of goods sold as a
percentage  of net  sales is  primarily  attributable  to the  improved  margins
realized in the Vintners Blend Series.

                                       10
<PAGE>


Gross Profit

Ravenswood's  gross profit  increased to $5.0 million for the three months ended
March 31, 2001, from $4.2 million for the three months ended March 31, 2000, and
increased as a percentage  of net sales to 54.1% from 52.0% in these  respective
periods.  The increase in aggregate  gross profit is primarily  attributable  to
increases in sales  volume.  The increase in gross profit as a percentage of net
sales is primarily due to the improved  margins  realized in the Vintners  Blend
Series and the timing of the payment of excise taxes.

Operating Expenses

Operating  expenses  increased  to $2.2 million for the three months ended March
31, 2001,  from $1.8  million for the three  months  ended March 31,  2000,  and
increased as a percentage  of net sales to 24.0% from 22.5% in these  respective
periods.  The increase in the amount of operating  expenses is  attributable  to
several  different  factors.  Increased  sales  volumes  resulted  in  increased
brokerage commissions as well as increases in Ravenswood's sales, administrative
and  warehouse  staffs.  Operating  expenses,  as a  percentage  of sales,  have
increased  due  primarily to  significant  increases in personnel  and brokerage
commissions.

Other Expense, Net

Other expense amounted to $257,895 and $205,369,  or 2.8% and 2.5% of net sales,
in the three months ended March 31, 2001, and 2000, respectively.  Other expense
for the three months ended March 31, 2001, includes accrued legal and accounting
expenses  related to the proposed  acquisition  of Ravenswood  by  Constellation
Brands, Inc. This transaction is described in more detail in this 10-QSB on page
16 under "Subsequent Event." These expenses are one-time,  non-recurring charges
that Ravenswood does not expect to incur subsequent to the proposed acquisition.

Provision for Income Taxes

The provision for income taxes  reflects an estimated  annualized  effective tax
rate of 38.0% for the three  months  ended  March  31,  2001,  and 39.9% for the
corresponding  period in  fiscal  2000.  The  decrease  is due to the  effect of
manufacturer's  tax credit on the  effective tax rate for the three months ended
March 31, 2001.

Nine Months Ended March 31, 2001 and 2000

Sales

Net sales of Ravenswood's products increased to $28.8 million in the nine months
ended March 31,  2001,  from $25.7  million in the nine  months  ended March 31,
2000.  This increase is primarily  attributable  to an increase in the volume of
wines produced and sold by Ravenswood.  In the nine months ended March 31, 2001,
case sales  increased  to 362,089  cases from  312,902  cases in the nine months
ended March 31, 2000,  while the average price per case decreased to $84.03 from
$86.77 in these respective  periods.  Gross sales for Vintners Blend Series grew
21.0%,  while County  Series  sales  increased by 9.5% for the nine months ended
March 31,  2001,  compared to the nine months  ended  March 31,  2000.  Vineyard
Designate  Series  decreased  by 14.7% for the period  ended March 31, 2001 when
compared  to the  first  nine  months  of fiscal  2000 due to the  smaller  1998
vintage.

The percentages of gross sales attributable to the Vintners Blend Series, County
Series and Vineyard Designate Series were 65.2%, 21.0% and 12.9%,  respectively,
for the nine months ended March 31, 2001, as compared to 60.6%, 21.4% and 17.0%,
respectively,  in the nine months  ended  March 31,  2000.  Sales of  Ravenswood
branded  merchandise  accounted for  approximately  .9% and 1.0% of gross sales,
respectively, for the nine months ended March 31, 2001, and March 31, 2000.

                                       11
<PAGE>

Cost of Goods Sold

Cost of goods sold  increased to $13.2 million,  or 45.7% of net sales,  for the
nine months ended March 31, 2001, from $12.2 million, or 47.3% of net sales, for
the nine months  ended March 31,  2000.  The decrease in cost of goods sold as a
percentage  of net  sales is  primarily  attributable  to the  improved  margins
realized in Vintners Blend Series wines.

Gross Profit

Ravenswood's  gross profit  increased to $15.7 million for the nine months ended
March 31, 2001, from $13.6 million for the nine months ended March 31, 2000, and
increased as a percentage  of net sales to 54.3% from 52.7% in these  respective
periods.  The increase in aggregate  gross profit is primarily  attributable  to
increases in sales volumes of Ravenswood's product series. The increase in gross
profit  as a  percentage  of net  sales is due  primarily  to  improved  margins
realized in Vintners Blend Series wines.

Operating Expenses

Operating expenses increased to $6.8 million for the nine months ended March 31,
2001,  from $5.6 million for the nine months ended March 31, 2000, and increased
as a percentage  of net sales to 23.7% from 21.6% in these  respective  periods.
The  increase in the amount of  operating  expenses is  attributable  to several
different  factors.  Increased  sales  volumes  resulted in increased  brokerage
commissions  as well as  increases in  Ravenswood's  sales,  administrative  and
warehouse staffs.  Operating expenses,  as a percentage of sales, have increased
due primarily to significant increases in personnel and brokerage commissions.

Other Expense, Net

Other  expense  amounted to $531,196 and $403,737 or 1.8% and 1.6% of net sales,
in the nine months ended March 31, 2001, and 2000, respectively. The increase in
other  expense is due  primarily  to an increase  in  interest  expense on funds
borrowed to build the Quarry Facility and to purchase equipment installed there.
Additionally,  interest income generated from invested proceeds of the December,
1998  private  placement  and April,  1999  initial  public  offering  which had
previously  offset  interest  expense has decreased as Ravenswood has used those
funds to complete the Quarry  Facility and as operating  capital.  Additionally,
for the nine months ended March 31, 2001, other expenses  includes accrued legal
and accounting expenses related to the proposed acquisition of Ravenswood Winery
by  Constellation  Brands,  Inc. This transaction is described in more detail in
this 10-QSB on page 16 under  "Subsequent  Event." These  expenses are one-time,
non-recurring charges that Ravenswood does not expect to incur subsequent to the
proposed acquisition.

Provision for Income Taxes

The provision for income taxes  reflects an estimated  annualized  effective tax
rate of 39.2%  for the nine  months  ended  March  31,  2001,  and 39.5% for the
corresponding period in fiscal 2000. The slight decrease is due to the effect of
manufacturer's  tax credit on the  effective  tax rate for the nine months ended
March 31, 2001.


Selected Quarterly Results of Operations

The following table presents  Ravenswood's results of operations for each of the
six  quarters  prior to and  including  the quarter  ended March 31,  2001.  The
quarterly information is unaudited, but management believes that the information
regarding  these  quarters  has been  prepared  on the same basis as the audited
financial  statements appearing in the Company's Form 10-KSB for the fiscal year
ended June 30, 2000. In the opinion of  management,  all  necessary  adjustments
which include only normal  recurring  adjustments  have been included to present
fairly  the  unaudited  quarterly  results  when  read in  conjunction  with the
financial  statements and related notes appearing  elsewhere in this Form 10-QSB
filing.

                                       12
<PAGE>

<TABLE>

                                                                               Quarter Ended
                                                                              (In Thousands)
                                                 -----------------------------------------------------------------------------------
                                                 December 31,   March 31,       June 30,     September 30,  December 31,   March 31,
                                                    1999          2000           2000            2000           2000          2001
                                                  -------        -------        -------        -------        -------        -------
<S>                                               <C>            <C>            <C>            <C>            <C>            <C>
Statement of Income Data:
Gross Sales                                       $10,437        $ 8,692        $ 8,197        $ 9,607        $11,359        $ 9,720
Less Excise Taxes                                     199            326            404            331            241            202
Less Discounts, Allowances
    And Returns                                       315            239            309            378            408            289
                                                  -------        -------        -------        -------        -------        -------
Net Sales                                           9,924          8,127          7,484          8,898         10,710          9,229
Cost of Goods Sold                                  4,814          3,897          3,522          4,033          4,922          4,234
                                                  -------        -------        -------        -------        -------        -------
Gross Profit                                        5,110          4,230          3,961          4,865          5,788          4,995
Operating Expenses                                  2,001          1,832          2,162          2,217          2,403          2,212
                                                  -------        -------        -------        -------        -------        -------
Operating Income                                    3,108          2,398          1,799          2,648          3,385          2,783
Other Expense, Net                                    160            205            186            113            160            258
                                                  -------        -------        -------        -------        -------        -------
Income Before Income Taxes                          2,947          2,192          1,613          2,535          3,224          2,525
Provision for Income Taxes                          1,168            875            370          1,020          1,266            960
                                                  -------        -------        -------        -------        -------        -------
Net Income                                        $ 1,780        $ 1,317        $ 1,243        $ 1,515        $ 1,958        $ 1,565
                                                  =======        =======        =======        =======        =======        =======
</TABLE>

Ravenswood  experiences seasonal and quarterly  fluctuations in sales, operating
expenses  and net income.  Because  Ravenswood  manages its  business to achieve
long-term  strategic  objectives,  it may make  decisions  that it believes will
enhance  its  long-term  growth  and  profitability,  even  if  these  decisions
adversely  affect  quarterly  earnings.  These  decisions  include:  (a) when to
release its wines for sale based on the  winemaker's  opinion on the maturity of
the wine; (b) how to position its wines  competitively;  and (c) which grape and
bulk wine sources to use to produce its wines. In addition, the release dates of
Ravenswood's  Vineyard  Designate  Series and County  Series  have  resulted  in
fluctuations in Ravenswood's results on a quarter-to-quarter basis. Ravenswood's
sales volume may also change depending upon its distributors'  inventory levels.
The results of operations for any quarter are not necessarily  indicative of the
results of any future period. The market price of Ravenswood's  common stock may
fluctuate significantly in response to these quarter-to-quarter variations.

FINANCIAL CONDITION

Assets

Ravenswood's total assets increased by 16.0% to $53.6 million at March 31, 2001,
from $46.2 million at June 30, 2000.  Accounts  receivable  increased 29.4% from
$4.2 million at June 30, 2000 to $5.4 million at March 31, 2001. The increase in
accounts  receivable  can be  attributed to an increase in sales for the quarter
ended March 31, 2001 as compared to sales for the quarter  ended June 30,  2000.
Ravenswood's  inventory increased by 29.8% or $6.1 million from $20.5 million at
June 30, 2000 to $26.6  million on March 31, 2001.  The increase in inventory is
primarily due to the receipt of grapes for the 2000 harvest. Property, plant and
equipment,  net of depreciation,  decreased  $404,703 from $14.8 million at June
30, 2000 to $14.4 million at March 31, 2001.  This results from  depreciation of
approximately $1.2 million, offset by additions of approximately $812,000.

                                       13
<PAGE>

Liabilities

Ravenswood's  total  liabilities  increased  13.4% to $18.0 million at March 31,
2001,  from $15.9  million at June 30, 2000.  The increase was  primarily due to
purchases  of grapes  received for the 2000 harvest and is reflected in accounts
payable.  Additionally,  accrued liabilities at March 31, 2001, include employee
bonuses that will be paid by June 30, 2001 while accrued liabilities at June 30,
2000 do not  include  any  employee  bonuses.  At March 31,  2001,  Ravenswood's
long-term  liabilities  outstanding  were $10.8  million and $2.0  million  were
available under the terms of Ravenswood's lines of credit.

Liquidity and Capital Resources

Ravenswood  has funded its capital  requirements  primarily with cash flows from
operations,  a mix of short-term and long-term  borrowings,  and the sale of its
securities,  most recently with its initial public offering in April, 1999. Cash
and cash equivalents totaled $6.1 million at March 31, 2001, as compared to $5.8
million at June 30, 2000. The increase in cash and cash equivalents is primarily
due to cash  generated from  operations  and receipt of the last  installment of
Ravenswood's construction loan from Pacific Coast Farm Credit.

Net cash provided by operations was $65,644 for the three months ended March 31,
2001 as compared to $551,952  provided by operations  for the three months ended
March 31, 2000.  The principal use of cash from  operations for the three months
ended March 31, 2001 was the payment of accounts  payable.  The principal source
of cash for the three  months  ended  March 31,  2001 was net  income.  Net cash
provided by  operations  was $1.2  million  for the nine months  ended March 31,
2001, as compared to $175,444 used by operations for the nine months ended March
31, 2000. The principal  uses of cash from  operations for the nine months ended
March 31, 2001 were the acquisition of additional  inventory,  especially grapes
received through the harvest, and funding accounts receivable. Principal sources
of cash during this same period were net income and accounts payable.

Net cash used for  investing  activities  totaled  $159,140 for the three months
ended  March 31, 2001 as compared  to $1.1  million for the three  months  ended
March 31, 2000. The principal use of cash for investing activities for the three
months ended March 31, 2001 was primarily purchases of plant equipment. Net cash
used for investing  activities  totaled $330,092 for the nine months ended March
31, 2001,  as compared to $5.6 million for the nine months ended March 31, 2000.
The principal use of cash for the nine months ended March 31, 2001 was primarily
for  purchases of plant  equipment.  During fiscal 2000,  Ravenswood  was in the
process of building and  equipping its Quarry  Facility and therefore  cash used
for investing  activities was much larger than for the same period during fiscal
2001.  Ravenswood  expects  that net cash  used for  investing  activities  will
increase in the future due to the  expansion of its barrel  storage  capacity at
the Quarry Facility.

Net cash used by  financing  activities  was $169,891 for the three months ended
March 31, 2001,  as compared to $118,251  used by financing  activities  for the
three  months  ended March 31,  2000.  The  principal  use of cash for the three
months ended March 31, 2001 and March 31, 2000 was repayment of long-term  debt.
Net cash used by  financing  activities  was  $521,118 for the nine months ended
March 31, 2001, as compared to $1.3 million provided by financing activities for
the nine months ended March 31, 2000.  The  principal  uses of cash for the nine
months ended March 31, 2001 were both  repayment of long-term  debt and the line
of credit,  while the  principal  source of cash for the nine months ended March
31, 2000 was  financing  provided by Pacific  Coast Farm Credit  Association  to
construct the Quarry Facility

Ravenswood's grape purchases  normally occur in the second fiscal quarter,  when
the  fruit is  harvested.  For the 2000  harvest,  over half of the  grapes  was
received  in August  and  September,  or the  first  fiscal  quarter,  while the
remainder  was received in October and November,  or the second fiscal  quarter.
Most grape purchase contracts specify the timing of payment for these purchases.
The  actual  payment  dates  vary  depending  upon the  terms of the  individual
contract.  Based upon its grape purchase  contracts for the 2000 harvest,  these
payments have been or will be made in the following manner:  37%, 30% and 19% in
the second,  third and fourth  quarters of fiscal  2001,  respectively,  and the
remaining  14% in the first quarter of fiscal 2002. As a result of harvest costs
and the timing of grape and bulk wine purchase payments,  Ravenswood's inventory
and related cash requirements  generally peak during the second and third fiscal
quarters.  Cash requirements also fluctuate  depending upon the level and timing
of capital spending and tax payments.

                                       14
<PAGE>

Ravenswood  leases  barrels and other  equipment  used in the  production of its
wines.  Ravenswood estimates that aggregate lease payments for barrels and other
equipment will be  approximately  $625,000 for the 2001 fiscal year.  Ravenswood
anticipates  that it will  enter  into  additional  leasing  arrangements  as it
increases its production.

The holders of $815,000 in  convertible  debentures  issued in 1994 converted to
285,250  shares of Ravenswood  common stock in December  1999. If the debentures
had not converted,  Ravenswood would have been able to redeem them at face value
at any time during the period  beginning on January 1, 2000 and ending  December
31, 2004.

In  December  1998,  Ravenswood  completed  a private  sale of $1.7  million  of
convertible  debentures  due December 31, 2008 and $1.7 million of common stock.
Each  $10,000  debenture is  convertible  into 900 shares of common stock at any
time prior to December 31, 2003,  upon request of the holder.  If the debentures
are not  converted,  Ravenswood may redeem them at face value at any time during
the period  from  January  1, 2004  until the  maturity  date.  Ravenswood  pays
interest  quarterly on the  debentures in an amount equal to the prime  interest
rate  quoted by Bank of America  NT&SA plus 1%. The  interest  rate is  adjusted
every 18 months,  except  that in no period  may the  interest  rate  adjustment
exceed 2%, or the maximum interest rate exceed 11%.

Ravenswood  has a line of credit with  Pacific  Coast Farm  Credit  Association,
under which  Ravenswood may borrow up to a total of $2 million.  As of March 31,
2001, Ravenswood had nothing outstanding under this line of credit.

On April 26, 1999  Ravenswood  obtained a $4.6  million  construction  loan from
Pacific  Coast  Farm  Credit  Association  for  the  purpose  of  financing  the
construction of the Quarry Facility.  The loan is secured by the Quarry Facility
and its lease.  The Quarry Facility was completed in fiscal 2000 at a total cost
of approximately $9.7 million. The remaining costs of approximately $5.1 million
were funded from the December,  1998,  private equity offering and proceeds from
Ravenswood's   initial  public   offering  in  April,   1999.   Equipment  worth
approximately $3.3 million was funded through capital leases.

In April, 1999,  Ravenswood  completed an initial public offering of one million
shares of its  common  stock at a price of $10.50 per share.  W.R.  Hambrecht  &
Company,  LLC acted as underwriter  for the offering.  The net proceeds from the
offering  have  been  and  will  continue  to be used  for:  investment  in wine
inventory,  expansion of production facilities,  general corporate purposes, and
retirement  of  indebtedness.  Ravenswood's  shares  are  listed  on the  Nasdaq
National Market under the trading symbol RVWD.

The full extent of Ravenswood's future capital  requirements and the adequacy of
its  available  funds  will  depend  on many  factors,  not all of which  can be
accurately  predicted.  Although no assurance can be given,  Ravenswood believes
that anticipated cash flow from operations, borrowings under its existing credit
agreements,  proceeds from its initial public offering and the private placement
in 1998 described  above,  will be sufficient to fund its capital  requirements,
including its planned  expansion,  for at least the next 12 months. In the event
that additional  capital is required,  Ravenswood may seek to raise that capital
through public or private  equity or debt  financings.  Future  capital  funding
transactions may result in dilution to shareholders.

There can be no assurance that additional capital will be available on favorable
terms,  if at all.  Ravenswood's  inability  to  obtain  additional  capital  on
acceptable  terms would limit its growth and could have a negative impact on its
business. Ravenswood uses substantial amounts of its working capital to purchase
grapes  and bulk wine  supplies  from  third  parties  and to pay for the use of
third-party  production facilities in its wine production.  Ravenswood also uses
capital to fund its own  grape-growing  and  winemaking  activities.  Ravenswood
expects that it will need an increased  amount of working  capital over the next
several years to fund increases in its production level and inventory.

                                       15
<PAGE>

Subsequent Event

On April 10,  2001,  Ravenswood  entered  into an  Agreement  and Plan of Merger
("Agreement")  with  Constellation  Brands,  Inc., and VVV Acquisition Corp., an
indirect  wholly-owned  subsidiary of Constellation Brands, Inc. Pursuant to the
merger agreement, and subject to the terms and conditions set forth therein, VVV
Acquisition Corp. will be merged with Ravenswood,  with Ravenswood  surviving as
an  indirect  wholly-owned  subsidiary  of  Constellation  Brands  Inc.  At  the
effective time of the merger,  each issued and outstanding share of common stock
of Ravenswood will be converted into the right to receive cash  consideration in
the amount of $29.50 without interest.

The merger is subject to the  termination  or expiration  of the waiting  period
under the Hart-Scott-Rodino  Antitrust Improvements Act of 1976, and to approval
of the  holders of a majority of the  outstanding  shares of  Ravenswood  common
stock and other conditions  described in the Agreement.  Ravenswood has received
notice of early  termination of the waiting  period under the  Hart-Scott-Rodino
Antitrust  Improvements  Act.  Ravenswood  plans  to  file  a  definitive  proxy
statement  on the  week  of May  14,  2001  with  the  Securities  and  Exchange
Commission, related to the merger.

As a condition  to  Constellation  Brands,  Inc.  entering  into the  Agreement,
shareholders of Ravenswood  holding  approximately 54% of the outstanding common
stock of  Ravenswood,  including all of the executive  officers and directors of
Ravenswood,  entered into a voting agreement with Constellation Brands, Inc. and
VVV Acquisition  Corp. The voting agreement  provides that each shareholder will
vote or cause to be voted all of the shares of  Ravenswood  common stock held by
the  shareholder in favor of approval and adoption of the Agreement and in favor
of any  other  matter  necessary  or  appropriate  for the  consummation  of the
transactions contemplated by the Merger Agreement.

FACTORS THAT MAY AFFECT RESULTS

A reduction in consumer demand for premium red wines could harm our business

Because a large  percentage  of the wines we  produce  are  premium  red  wines,
including Merlot, Cabernet Sauvignon and, in particular, Zinfandel, our business
would be harmed if consumer  demand for red wines in general,  or  Zinfandel  in
particular,  failed to grow or declined. An overall reduction in consumer demand
for premium wine would also harm our business.

A  reduction  in the  supply of grapes  and bulk wine  available  to us from the
independent  grape growers and bulk wine  suppliers on whom we rely could reduce
our annual production of wine

We rely on  annual  contracts,  many of which are not in  writing,  with over 80
independent growers to purchase substantially all of the grapes used in our wine
production. We cannot provide assurance that we will be able to contract for the
purchase of grapes at  acceptable  prices from these or other  suppliers  in the
future. The terms of many of our purchase  agreements also constrain our ability
to discontinue  purchasing grapes in circumstances where we might want to do so.
Those  agreements  typically  provide that, while either party may terminate the
agreement  at any time,  both  parties  must  continue to abide by its terms for
three years following termination.

We are  dependent on bulk wine  suppliers  for the  production of several of our
wines, particularly our Vintners Blend Series. We have a few contracts with bulk
wine suppliers, however, these agreements would not protect us from fluctuations
in the price or availability of bulk wine because of the amount of wine required
for these products. The availability and price of bulk wine significantly affect
the quality and  production  levels of our products that contain bulk wine.  The
price,  quality and available quantity of bulk wine have fluctuated in the past.
It is  possible  that we will not be able to  purchase  bulk wine of  acceptable
quality at acceptable prices and quantities in the future,  which could increase
the cost or reduce  the  amount of wine we produce  for sale.  This could  cause
reductions in our sales and profits.

                                       16
<PAGE>

Bad weather, plant diseases,  pests,  including the glassy-winged  sharpshooter,
and other  factors  could  reduce the amount or quality of the grapes we need to
produce our wines

A shortage in the supply of quality grapes may result from the occurrence of any
number of the factors which  determine the quality and quantity of grape supply,
such as weather  conditions,  pruning  methods,  the  existence  of diseases and
pests,  and the  number  of  vines  producing  grapes,  as well as the  level of
consumer  demand for wine.  Any shortage could cause an increase in the price of
some or all of the grape  varieties  required for our wine  production  and/or a
reduction  in the amount of wine we are able to  produce,  which  could harm our
business and reduce our sales and profits.

For example, due to the effects of El Nino, the grape supply available to us for
the 1998  harvest was lower than for the 1997  harvest,  which we believe was an
unusually large harvest.  Therefore,  the inventory of our 1998 vintage was less
than  that of our 1997  vintage.  As a  result,  the  growth of our sales may be
limited  in  fiscal  year  2001,  when a  portion  of our 1998  vintage  will be
available for sale.

Factors which reduce the quantity of grapes may also reduce their quality, which
in turn could reduce the quality or amount of wine we produce.  A  deterioration
in the  quality of our wines  could harm our brand  name,  and a decrease in our
production could reduce our sales and profits.

Although  we grow only a small  portion of the grapes we use,  our  business  is
still subject to numerous  agricultural risks. Most of the vineyards that supply
our grapes are  primarily  planted to  rootstocks  believed to be  resistant  to
Phylloxera,  a pest that feeds on  susceptible  grape  rootstocks.  We  purchase
grapes from regions in California in which the  glassy-winged  sharpshooter has,
or may be encountered.  The  glassy-winged  sharpshooter  can transmit  Pierce's
Disease to vineyards.  This disease is often fatal to wine grape vines. To date,
our access to supplies of grapes and bulk wine has not been negatively  impacted
by the spread of the glassy-winged sharpshooter or Pierce's Disease. However, we
cannot be certain that these vineyards, or vineyards from which we obtain grapes
in the  future,  will not  become  susceptible  to  current  or new  strains  of
Phylloxera, plant insects, such as the glassy-winged sharpshooter,  or diseases,
such as Pierce's Disease.  Any resulting  reduction in grape supply could reduce
our sales and profits.

An oversupply  of grapes may also harm our business by increasing  the supply of
wine sold by our competitors

The recent  increase in demand for premium  wine has resulted in the planting of
additional vineyards, both domestically and internationally,  and the replanting
of existing vineyards to greater densities,  which could result in a significant
increase  in the supply of premium  wine  grapes.  An  oversupply  of grapes may
significantly  increase the amount of premium wine produced.  An increase in the
supply of premium wines could harm our business  because we only produce premium
wines.  Oversupply may also increase the amount of premium wine available to our
distributors  and  retail  outlets,  which  would  increase  competition  in our
distribution channels.

The loss of Mr.  Foster,  Mr.  Peterson or other key employees  would damage our
reputation and business

We believe that our success  largely  depends on the  continued  employment of a
number of our key  employees,  including W. Reed Foster,  our chairman and chief
executive  officer,  and Joel E.  Peterson,  our  president and  winemaker.  Any
inability or unwillingness  of Mr. Foster,  Mr. Peterson or other key management
team members to continue in their present capacities could harm our business and
our reputation.  For instance,  if Mr.  Peterson's  relationship with Ravenswood
were to terminate for any reason,  we would need to find a successor  winemaker.
We cannot be  certain  that we could  find or hire a  successor  winemaker  with
skills equivalent to those of Mr. Peterson.

                                       17
<PAGE>

Because a significant  amount of our sales is made through brokers,  a change in
our relationship with any of them could harm our business

In the 2000 fiscal year,  approximately 75% of our gross sales were made through
brokers.  A change in our  relationship  with any of our brokers  could harm our
business and reduce our sales.  Our most  successful  broker was responsible for
21% of our gross  sales in the 2000  fiscal  year,  and our ten most  successful
brokers were responsible for 69% of our gross sales in the 2000 fiscal year.

Because some states have laws that prohibit  distributor  changes, our sales may
be reduced if we cannot replace an under-performing distributor.

Our sales outside of California  largely depend on the use of distributors.  Our
ten largest distributors  accounted for approximately 23% of our gross sales for
the 2000 fiscal year,  and we expect that sales to our ten largest  distributors
will continue to represent a substantial portion of our sales in the future. The
laws and regulations of several states prohibit distributor changes except under
limited  circumstances.  As a  result,  it may be  difficult  for us to  replace
distributors  that do not  perform  adequately,  which may  reduce our sales and
profits.

Our  business  may be harmed if our  distributors  fail to market  our  products
effectively

We depend largely on our distributors in areas outside  California to market our
products to the restaurants and retail outlets they service.  Other premium wine
producers,  as well as the producers of alternative  beverages,  compete for our
distributors'  marketing resources.  A failure by our distributors to market our
products as effectively as they, or other distributors,  market our competitors'
products could harm our business.

The market price of our stock may fluctuate due to seasonal  fluctuations in our
wine sales, operating expenses and net income

We experience seasonal and quarterly  fluctuations in sales,  operating expenses
and net income.  We have managed,  and will continue to manage,  our business to
achieve long-term objectives. In doing so, we may make decisions that we believe
will enhance our  long-term  profitability,  even if these  decisions may reduce
quarterly earnings.  These decisions include:  (a) when to release our wines for
sale; (b) how to position our wines competitively;  and (c) which grape and bulk
wine  sources to use to produce  our wines.  In  addition,  fluctuations  in our
distributors'  inventory  levels may affect  our sales  volume.  These and other
factors relating to seasonality and business decisions may cause fluctuations in
the market price of our common stock.

We also compete with popular low-priced  "generic" wines and with beer and other
alcoholic  and  non-alcoholic  beverages  both  for  demand  and for  access  to
distribution channels.

Many of the  producers  of  these  beverages  also  have  significantly  greater
financial,  technical,  marketing and public relations resources than we do. Our
sales may be harmed to the extent any alternative  beverages are introduced that
compete with wine. We may not be able to compete successfully against these wine
or alternative beverage producers.

                                       18
<PAGE>

A reduction  in our access to, or an  increase  in the cost of, the  third-party
services we use to produce our wine could harm our business

We utilize third-party  facilities,  of which there is a limited supply, for the
production  activities associated with our wines. Our inability in the future to
use these or  alternative  facilities,  at  reasonable  prices or at all,  could
increase the cost or reduce the amount of our production, which could reduce our
sales and our profits.  We do not have  long-term  agreements  with any of these
facilities.   The  activities  conducted  at  outside  facilities  include:  (a)
crushing;  (b) fermentation;  (c) storage; (d) blending;  and (e) bottling.  Our
reliance  on these  third-parties  varies  according  to the type of  production
activity.  As  production  increases,   we  may  continue  to  rely  upon  these
third-party production facilities. Reliance on third-parties will also vary with
annual harvest volumes.

A failure to complete the expansion of our facilities as planned could limit our
production of wine and harm our business

We recently completed Phase I of our production  facility,  the Quarry Facility,
and are currently  utilizing it to full capacity.  We are currently  planning to
expand the Quarry Facility,  in order to increase our production  capacity.  Our
failure to complete the expansion of the Quarry  Facility,  or otherwise  expand
our production capabilities,  would limit our production capacity, would require
greater use of  third-party  production  facilities  and could  reduce our sales
and/or  profits.  We expect to utilize the entire Quarry Facility fully upon the
completion of the contemplated  expansion. As a result, any further expansion of
our production capacity may require us to use third-party  production facilities
to continue  to expand our own  production  capacity.  Our failure to expand our
production  capacity,  or to  secure  capacity  from  third-parties,  either  at
acceptable  prices or at all,  could limit our  production  and reduce our sales
and/or profits.

Adverse public opinion about alcohol may harm our business

In recent  years,  activist  groups have used  advertising  and other methods to
inform the public about the societal harms  associated  with the  consumption of
alcoholic  beverages.  These  groups  have also  sought,  and  continue to seek,
legislation to reduce the availability of alcoholic  beverages,  to increase the
penalties associated with the misuse of alcoholic beverages,  or to increase the
costs  associated with the production of alcoholic  beverages.  Over time, these
efforts  could cause a  reduction  in the  consumption  of  alcoholic  beverages
generally, which could harm our business and reduce our sales and profits.

While a number of research studies suggest that moderate alcohol consumption may
provide various health benefits,  other studies conclude or suggest that alcohol
consumption has no health  benefits and may increase the risk of stroke,  cancer
and other  illnesses.  An  unfavorable  report on the health  effects of alcohol
consumption could significantly reduce the demand for wine, which could harm our
business and reduce our sales and profits.

Contamination of our wines would harm our business

Because our products are designed for human consumption, our business is subject
to hazards and liabilities  related to food products,  such as contamination.  A
discovery of contamination in any of our wines,  through tampering or otherwise,
could result in a recall of our products.  Any recall would significantly damage
our  reputation  for product  quality,  which we believe is one of our principal
competitive assets, and could seriously harm our business and sales. Although we
maintain  insurance  to  protect  against  these  risks,  we may  not be able to
maintain insurance on acceptable terms and this insurance may not be adequate to
cover any resulting liability.

                                       19
<PAGE>

Increased regulatory costs or taxes would harm our financial performance

The wine  industry is regulated  extensively  by the Federal  Bureau of Alcohol,
Tobacco and  Firearms,  various  foreign  agencies,  and state and local  liquor
authorities. These regulations and laws dictate various matters, including:

    o    Excise taxes
    o    Licensing requirements
    o    Trade and pricing practices
    o    Permitted distribution channels
    o    Permitted and required labeling
    o    Advertising
    o    Relationships with distributors and retailers

Recent and future zoning ordinances,  environmental restrictions and other legal
requirements may limit our plans to expand our production  capacity,  as well as
any future development of new vineyards and wineries. Future legal or regulatory
challenges  to the wine  industry  could also harm our  business  and impact our
operating results.

Because our  directors and officers have  significant  control over  Ravenswood,
other  investors do not have as much  influence  on corporate  decisions as they
would if control were less concentrated

Assuming all convertible debentures held by our directors and executive officers
and their respective  affiliates will be converted,  and all options exercisable
within 60 days of the date hereof held by our directors and executive  officers,
will be exercised,  our directors  and executive  officers and their  respective
affiliates  would   beneficially  own  2,388,977  shares  of  common  stock,  or
approximately   47.3%  of  our   outstanding   common  stock  and  common  stock
equivalents.  As a  result,  our  directors  and  executive  officers  and their
respective  affiliates have  significant  influence in the election of directors
and the  approval of  corporate  actions  that must be  submitted  for a vote of
shareholders.  The interests of these persons may conflict with the interests of
other  shareholders,  and the  actions  they take or approve  may be contrary to
those desired by the other  shareholders.  This  concentration  of ownership may
also have the effect of delaying,  preventing  or deterring  an  acquisition  of
Ravenswood by a third party.

Natural disasters,  including earthquakes or fires, could destroy our facilities
or our inventory

California experiences earthquake activity from time to time, such as the recent
earthquake in Napa. The Gehricke Road Facility,  the Quarry  Facility and all of
the  third-party  facilities we use to produce and store our wine are located in
areas that are subject to  earthquake  activity.  If we lost all or a portion of
our wine prior to its sale or distribution  as a result of earthquake  activity,
we would lose our  investment in, and  anticipated  profits and cash flows from,
that wine.  Such a loss would  seriously  harm our business and reduce our sales
and profits.

In  addition,  we must  store our wine in a limited  number of  locations  for a
period of time prior to its sale or distribution. Any intervening catastrophies,
such as a fire,  that result in the  destruction of all or a portion of our wine
would result in a loss of our  investment in, and  anticipated  profits and cash
flows from,  that wine. Such a loss would seriously harm our business and reduce
our sales and profits.

Our small  market size and  relatively  low trading  volume may limit the market
price, liquidity or trading volume of our stock

Our small  size and  relatively  low  trading  volume  may  reduce the amount of
research coverage from market analysts. This reduced level of coverage may limit
the market price, liquidity or trading volume of our common stock.

                                       20
<PAGE>


                             RAVENSWOOD WINERY, INC.

                           PART II. OTHER INFORMATION
<TABLE>

Item 2. Changes in Securities and Use of Proceeds

The following  table  describes the use of proceeds  from  Ravenswood's  initial
public offering in April, 1999.
<CAPTION>

(IN THOUSANDS)
<S>                                                                    <C>
Effective Date of the Company's Registration Statement:                April 8, 1999
Commission File Number                                                 333-71729
Date Offering Commenced:                                               April 9, 1999
Date Offering Completed:                                               Upon the sale of all the shares
                                                                          registered
Names of Managing Underwriters:                                        W. R. Hambrecht & Co., LLP
Class of Securities Registered:                                        Common Stock
Shares Registered and Sold:                                            1,000*
Sold by Company:                                                       1,000*
Sold by Shareholders:                                                  0
Aggregate Price of Offering Amount Registered and Sold:                $10,500
Gross Proceeds to Company:                                             $10,500
Gross Proceeds to Selling Shareholders                                 0
Underwriter's Discounts and Commission Charged to the Company:         $420
Other issuance costs:                                                  $546
Net offering proceeds to the Company:                                  $9,534
Approximate use of net offering proceeds through March 31, 2001:
         Working capital                                               $2,297
         Retirement of debt                                            $1,000
         Expansion of production facilities                            $3,350

<FN>
-----------
*In  connection  with  the  initial  public  offering,  Ravenswood  granted  the
underwriters an over-allotment  option to purchase 150,000  additional shares of
Ravenswood's  common stock at the original  initial public offering  price.  The
option was not exercised.
</FN>
</TABLE>

Item 6. Exhibits and Reports on Form 8-K

(b)      Reports on Form 8-K.

Ravenswood  filed a Current  Report on Form 8-K dated April 11,  2001,  with the
Securities  and Exchange  Commission.  This Current  Report on Form 8-K reported
information  under Item 5 (Other  Events).  The  Current  Report did not include
financial statements.

                                       21
<PAGE>

                             RAVENSWOOD WINERY, INC.

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.


Dated: May 14, 2001                         Ravenswood Winery, Inc.


                                            ------------------------------------
                                            Callie S. Konno
                                            Chief Financial Officer

Dated: May 14, 2001

                                            ------------------------------------
                                            W. Reed Foster
                                            Chairman of the Board and Chief
                                            Executive Officer

                                       22