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

                        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 December 31, 2000

                                       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 February 7,
2001 was 4,871,865.

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

================================================================================
<PAGE>
                             RAVENSWOOD WINERY, INC.

                          PART I. FINANCIAL INFORMATION


                                                                            Page
                                                                            ----
ITEM 1. FINANCIAL STATEMENT

    Balance Sheets as of December 31, 2000 and June 30, 2000.                  2

    Statements of Income for the three months and six months
    ended December 31 , 2000 and 1999.                                         3

    Statements of Cash Flows for the three months and six
    months ended December 31, 2000 and 1999.                                   4

    Notes to Financial Statements.                                             5

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                      7
         CONDITION AND RESULTS OF OPERATIONS

ITEM 3. FACTORS THAT MAY AFFECT FUTURE RESULTS                                15

               PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                             19

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   20

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                      20

                                       1
<PAGE>
                             RAVENSWOOD WINERY, INC.
                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                             RAVENSWOOD WINERY, INC.
                                  BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                 December 31,          June 30,
                                                                                     2000                2000
                                                                                 -----------         -----------
                         ASSETS                                                  (unaudited)
<S>                                                                              <C>                 <C>
Current assets:
 Cash and cash equivalents                                                       $ 6,338,163         $ 5,769,373
 Accounts receivable, less allowance of $10,000                                    5,558,495           4,166,816
 Inventories                                                                      27,063,182          20,521,284
 Prepaid expenses                                                                    343,935             377,631
                                                                                 -----------         -----------
     Total current assets                                                         39,303,775          30,835,104
 Property, plant and equipment, net                                               14,652,650          14,787,553
 Note receivable from shareholder                                                    310,000             310,000
 Deferred tax assets                                                                  65,000             180,000
 Other assets                                                                         68,997              60,433
                                                                                 -----------         -----------
                                                                                 $54,400,422         $46,173,090
                                                                                 ===========         ===========

          LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Current portion of long-term debt                                               $    56,300         $    83,597
 Current portion of capital lease obligations                                        737,754             617,979
 Short-term borrowings                                                                    --             500,000
 Accounts payable                                                                  7,355,550           3,217,036
 Accrued commissions                                                                 686,544             514,379
 Accrued liabilities                                                                 694,621             390,010
                                                                                 -----------         -----------
     Total current liabilities                                                     9,530,769           5,323,001

Long-term liabilities:
 Long-term debt, net                                                               6,895,799           6,453,407
 Capital lease obligations, net                                                    2,453,633           2,392,497
 Convertible debentures                                                            1,625,000           1,687,500
                                                                                 -----------         -----------
     Total liabilities                                                            20,505,201          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,
  4,871,815 and 4,856,779 issued and outstanding                                  15,156,151          15,054,373
 Retained earnings                                                                18,649,666          15,176,560
 Unrealized gain on available-for-sale securities                                     89,404              85,752
                                                                                 -----------         -----------
     Total shareholders' equity                                                   33,895,221          30,316,685
                                                                                 -----------         -----------
                                                                                 $54,400,422         $46,173,090
                                                                                 ===========         ===========

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

                                       2
<PAGE>
                             RAVENSWOOD WINERY, INC.
                               STATEMENT OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                           Three months ended December 31,     Six months ended December 31,
                                           -------------------------------     -----------------------------
                                                2000            1999               2000            1999
                                            ------------    ------------       ------------    ------------
<S>                                        <C>              <C>                <C>             <C>
Gross Sales                                 $ 11,359,262    $ 10,437,413       $ 20,966,215    $ 18,726,389
  Less excise taxes                             (241,232)       (199,045)          (572,276)       (533,690)
  Less discounts, allowances and returns        (408,350)       (314,777)          (786,434)       (576,925)
                                            ------------    ------------       ------------    ------------

Net sales                                     10,709,680       9,923,591         19,607,505      17,615,774

Cost of goods sold                             4,921,569       4,813,758          8,954,200       8,277,176
                                            ------------    ------------       ------------    ------------

Gross profit                                   5,788,111       5,109,833         10,653,305       9,338,598

Operating expenses                             2,403,437       2,001,483          4,620,896       3,741,333
                                            ------------    ------------       ------------    ------------

Operating income                               3,384,674       3,108,350          6,032,409       5,597,265

Interest expense                                (244,628)       (232,678)          (502,359)       (356,444)
Other income (expenses)                           84,421          72,282            229,057         158,076
                                            ------------    ------------       ------------    ------------
                                                (160,207)       (160,396)          (273,302)       (198,368)

Income before income taxes                     3,224,467       2,947,954          5,759,107       5,398,897

Provision for income taxes                     1,266,000       1,168,000          2,286,000       2,121,130
                                            ------------    ------------       ------------    ------------

Net income                                  $  1,958,467    $  1,779,954       $  3,473,107    $  3,277,767
                                            ============    ============       ============    ============
Earnings per share:
  Basic                                     $       0.40    $       0.39       $       0.71    $       0.72
                                            ============    ============       ============    ============
  Diluted                                   $       0.39    $       0.36       $       0.69    $       0.67
                                            ============    ============       ============    ============
Weighted average number of common
 shares outstanding:
  Basic                                        4,870,758       4,571,435          4,864,142       4,569,893
                                            ============    ============       ============    ============
  Diluted                                      5,094,431       5,006,546          5,098,581       5,006,562
                                            ============    ============       ============    ============

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

                                       3
<PAGE>
                             RAVENSWOOD WINERY, INC.
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            Three months ended December 31,    Six months ended December 31,
                                                            -------------------------------    -----------------------------
                                                                2000                1999           2000             1999
                                                            -----------         -----------    -----------      ------------
<S>                                                        <C>                   <C>           <C>               <C>
Operations:
Net income                                                  $ 1,958,467         $ 1,779,954    $ 3,473,107      $  3,277,767
Items not requiring the current
 use of cash:
  Depreciation and amortization                                 418,804             315,441        792,366           458,831
  Unrealized gain (loss) on available for sale securities       (20,172)              5,649          3,652            43,216
  Deferred income taxes                                         (13,000)                 --        115,000             7,800
Changes in other operating items:
  Accounts receivable                                          (140,276)         (1,176,461)    (1,391,679)       (2,380,620)
  Inventories                                                  (878,483)         (3,521,358)    (6,541,898)       (5,378,337)
  Prepaid expenses                                             (150,542)           (169,092)      (117,304)           34,320
  Other assets                                                   (3,803)             (3,607)        (8,566)          (11,887)
  Accounts payable                                             (670,015)          2,326,683      4,138,514         2,973,194
  Accrued liabilities                                           223,918             121,329        304,612           207,243
  Prepaid (accrued) income taxes                               (741,000)           (929,480)       151,000          (240,520)
  Accrued commissions                                            92,359             185,285        172,165           281,595
                                                            -----------         -----------    -----------      ------------
Cash provided by (used for) operations                           76,257          (1,065,657)     1,090,969          (727,398)
                                                            -----------         -----------    -----------      ------------
Investing:
 Additions to plant & equipment                                 (60,252)         (2,382,011)      (170,952)       (4,484,459)
                                                            -----------         -----------    -----------      ------------
Cash used for investing activities                              (60,252)         (2,382,011)      (170,952)       (4,484,459)
                                                            -----------         -----------    -----------      ------------
Financing:
 Short-term borrowings, net                                          --             250,000       (500,000)         (700,000)
 Proceeds from long-term debt                                        --           1,933,509        455,000         2,252,036
 Proceeds from issuance of stock                                 16,703                  --         39,278                --
 Proceeds from sale of securities                                    --              12,948             --            12,948
 Repayments of long-term debt                                  (170,978)            (73,955)      (345,505)         (158,335)
                                                            -----------         -----------    -----------      ------------
Cash provided by (used for) financing activities               (154,275)          2,122,502       (351,227)        1,406,649
                                                            -----------         -----------    -----------      ------------
Change in cash & cash equivalents                              (138,270)         (1,325,166)       568,790        (3,805,208)

Balance at beginning of period                                6,476,433           8,910,861      5,769,373        11,390,903
                                                            -----------         -----------    -----------      ------------
Balance at end of period                                    $ 6,338,163         $ 7,585,695    $ 6,338,163      $  7,585,695
                                                            ===========         ===========    ===========      ============

Cash paid during the period for:
 Interest                                                   $   213,345         $   253,835    $   475,346      $    377,824
                                                            ===========         ===========    ===========      ============
 Taxes                                                      $ 2,020,000         $ 2,353,850    $ 2,020,000      $  2,353,850
                                                            ===========         ===========    ===========      ============
Noncash investing and financing:
 Plant and equipment purchased with long-term liabilities   $   362,627         $   411,576    $   486,511      $  1,116,631
                                                            ===========         ===========    ===========      ============
 Conversion of convertible debentures to common stock       $    62,500         $   815,000    $    62,500      $    815,000
                                                            ===========         ===========    ===========      ============

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

                                       4
<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 six-month periods ended
December 31, 2000 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 six month period ended December 31, 2000, 2,200 shares of common
stock were purchased under Ravenswood's 1999 Equity Incentive Plan, and 1,586
shares of common stock were issued under the Company's Employee Stock Purchase
Plan. In October 2000, debentures with a face value of $62,500 were converted
into 5,625 shares of the Company's common stock.

                                       5
<PAGE>
NOTE 4 - Inventories:

     Inventories are summarized as follows:

                                                December 31,          June 30,
                                                   2000                2000
                                                -----------         -----------
                                                (Unaudited)

          Bulk wine                             $22,134,236         $15,262,865
          Bottled wine                            4,590,277           4,716,701
          Crop costs                                 43,967             137,051
          Supplies                                  130,286             233,943
          Tasting room merchandise                  164,416             170,724
                                                -----------         -----------
                                                $27,063,182         $20,521,284
                                                ===========         ===========

NOTE 5 - Property, plant and equipment:

     Property, plant and equipment are summarized as follows:

                                                December 31,          June 30,
                                                   2000                2000
                                                -----------         -----------
                                                (Unaudited)

          Land                                  $   245,135         $   245,135
          Vineyards                                 345,473             345,473
          Buildings and improvements              1,647,634           1,647,637
          Leasehold improvements                  9,834,769           9,832,748
          Machinery and equipment                 1,195,900           1,080,251
          Equipment held under capital leases     4,605,465           4,118,953
          Office equipment                          319,386             298,837
          Construction in progress                   32,735                  --
                                                -----------         -----------
                                                 18,226,497          17,569,034
          Less accumulated depreciation           3,573,847           2,781,481
                                                -----------         -----------
                                                $14,652,650         $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                   Six months ended
                                                    December 31,                         December 31,
                                            ----------------------------         --------------------------
                                               2000              1999               2000            1999
                                            -----------       ----------         ----------      ----------
<S>                                         <C>               <C>                <C>             <C>
Net income                                  $ 1,958,467       $1,779,954         $3,473,107      $3,277,767

Change in unrealized gain (loss) on
  available-for-sale securities                 (20,172)           5,649              3,652          43,216
                                            -----------       ----------         ----------      ----------
Comprehensive income                        $ 1,938,295       $1,785,603         $3,476,759      $3,320,983
                                            ===========       ==========         ==========      ==========
</TABLE>

                                       6
<PAGE>
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

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

                                       7
<PAGE>
specific periods. Ravenswood traditionally releases new vintages of its Vineyard
Designate Series in the fourth fiscal quarter or the first fiscal quarter of the
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.

                                       8
<PAGE>
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:

<TABLE>
<CAPTION>
                                         Three Months Ended               Six Months Ended
                                            December 31,                    December 31,
                                            ------------                    ------------
Statement of Income Data:                1999           2000              1999        2000
                                         ----           ----              ----        ----
<S>                                     <C>            <C>               <C>         <C>
Net Sales                               100.0%         100.0%            100.0%      100.0%
Cost of Goods Sold                       48.5           46.0              47.0        45.7
                                        -----          -----             -----       -----
Gross Profit                             51.5           54.0              53.0        54.3
Operating Expenses                       20.2           22.4              21.2        23.5
                                        -----          -----             -----       -----
Operating Income                         31.3           31.6              31.8        30.8
Other Expense, net                        1.6            1.5               1.1         1.4
                                        -----          -----             -----       -----
Income Before Income Taxes               29.7           30.1              30.7        29.4
Provision for Income Taxes               11.8           11.8              12.1        11.7
                                        -----          -----             -----       -----
Net Income                               17.9%          18.3%             18.6%       17.7%
                                        =====          =====             =====       =====
</TABLE>

Three Months Ended December 31, 2000 and 1999

Sales

Net sales of Ravenswood's products increased to $10.7 million in the three
months ended December 31, 2000, from $9.9 million in the three months ended
December 31, 1999. This increase is primarily attributable to an increase in the
volume of wines produced and sold by Ravenswood. In the three months ended
December 31, 2000, case sales increased to 134,245 cases from 119,966 cases in
the three months ended December 31, 1999, while the average gross price per case
decreased to $83.97 from $86.13 in these respective periods due to a change in
the mix of products sold. Gross sales for Vintners Blend Series grew 16.1%,
while County Series sales increased by 8.4% for the three months ending December
31, 2000, compared to the three months ended December 31, 1999. Vineyard
Designate Series decreased by 16.0% for the period ended December 31, 2000 when
compared to the second quarter of fiscal 2000 due to the smaller 1998 vintage
which is available for sale during the 2001 fiscal year.

The percentages of gross sales attributable to the Vintners Blend Series, County
Series and Vineyard Designate Series were 66.4%, 19.7% and 13.0%, respectively,
for the three months ended December 31, 2000, as compared to 62.5%, 19.8% and
16.8%, respectively, in the three months ended December 31, 1999. Sales of
Ravenswood branded merchandise accounted for approximately .9% of gross sales
for the three months ended December 31, 2000 and December 31, 1999.

Cost of Goods Sold

Cost of goods sold increased to $4.9 million, or 46.0% of net sales, for the
three months ended December 31, 2000, from $4.8 million, or 48.5% of net sales,
for the three months ended December 31, 1999. 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.

Gross Profit

Ravenswood's gross profit increased to $5.8 million for the three months ended
December 31, 2000, from $5.1 million for the three months ended December 31,

                                       9
<PAGE>
1999, and increased as a percentage of net sales to 54.0% from 51.5% 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.

Operating Expenses

Operating expenses increased to $2.4 million for the three months ended December
31, 2000, from $2.0 million for the three months ended December 31, 1999, and
increased as a percentage of net sales to 22.4% from 20.2% 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 additional personnel that were not hired until the
third and fourth quarters of fiscal 2000 when the Quarry Facility and new
warehouse became operational. Additionally, depreciation expense has increased
significantly as portions of the Quarry Facility have been put into operation.

Other Expense, Net

Other expense remained stable at $160,207 and $160,396, or 1.5% and 1.6% of net
sales, in the three months ended December 31, 2000, and 1999, respectively.

Provision for Income Taxes

The provision for income taxes reflects an estimated annualized effective tax
rate of 39.3% for the three months ended December 31, 2000, and 39.6% 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 three months ended
December 31, 2000.

Six  Months Ended December 31, 2000 and 1999

Sales

Net sales of Ravenswood's products increased to $19.6 million in the six months
ended December 31, 2000, from $17.6 million in the six months ended December 31,
1999. This increase is primarily attributable to an increase in the volume of
wines produced and sold by Ravenswood. In the six months ended December 31,
2000, case sales increased to 241,782 cases from 206,654 cases in the six months
ended December 31, 1999, while the average price per case decreased to $85.85
from $89.59 in these respective periods. Gross sales for Vintners Blend Series
grew 23.6%, while County Series sales increased by 16.2% for the six months
ended December 31, 2000, compared to the six months ended December 31, 1999.
Vineyard Designate Series decreased by 22.7% for the period ended December 31,
2000 when compared to the first six 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 63.0%, 21.3% and 14.6%, respectively,
for the six months ended December 31, 2000, as compared to 57.1%, 20.5% and
21.2%, respectively, in the six months ended December 31, 1999. Sales of
Ravenswood branded merchandise accounted for approximately 1.1% of gross sales
for the six months ended December 31, 2000, and December 31, 1999.

Cost of Goods Sold

Cost of goods sold increased to $8.9 million, or 45.7% of net sales, for the six
months ended December 31, 2000, from $8.3 million, or 47.0% of net sales, for

                                       10
<PAGE>
the six months ended December 31, 1999. 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 $10.6 million for the six months ended
December 31, 2000, from $9.3 million for the six months ended December 31, 1999,
and increased as a percentage of net sales to 54.3% from 53.0% 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 $4.6 million for the six months ended December
31, 2000, from $3.7 million for the six months ended December 31, 1999, and
increased as a percentage of net sales to 23.6% from 21.2% 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 additional personnel that were not hired until the
third and fourth quarters of fiscal 2000 when the Quarry Facility and new
warehouse became operational. Additionally, depreciation expense has increased
significantly as portions of the Quarry Facility have been put into operation.

Other Expense, Net

Other expense amounted to $273,302 and $198,368 or 1.4% and 1.1% of net sales,
in the six months ended December 31, 2000, and 1999, 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. A portion of the
decrease in interest income has been offset by income generated through custom
crush and custom bottling fees.

Provision for Income Taxes

The provision for income taxes reflects an estimated annualized effective tax
rate of 39.7% for the six months ended December 31, 2000, and 39.3% for the
corresponding period in fiscal 2000. The slight increase is due to the effect of
manufacturer's tax credit on the effective tax rate for the six months ended
December 31, 1999.

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 December 31, 2000. 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.

                                       11
<PAGE>
<TABLE>
<CAPTION>
                                                                          Quarter Ended
                                                                          (In Thousands)
                                        ----------------------------------------------------------------------------------
                                        September 30,   December 31,   March 31,   June 30,   September 30,   December 31,
                                            1999           1999          2000        2000         2000           2000
                                            ----           ----          ----        ----         ----           ----
<S>                                        <C>           <C>            <C>         <C>          <C>           <C>
Statement of Income Data:
Gross Sales                                $8,289        $10,437        $8,692      $8,197       $9,607        $11,359
 Less Excise Taxes                            335            199           326         404          331            241
 Less Discounts, Allowance and Returns        262            315           239         309          378            408
                                           ------        -------        ------      ------       ------        -------
Net Sales                                   7,692          9,924         8,127       7,484        8,898         10,710
Cost of Goods Sold                          3,463          4,814         3,897       3,522        4,033          4,922
                                           ------        -------        ------      ------       ------        -------
Gross Profit                                4,229          5,110         4,230       3,961        4,865          5,788
Operating Expenses                          1,740          2,001         1,832       2,162        2,217          2,403
                                           ------        -------        ------      ------       ------        -------
Operating Income                            2,489          3,108         2,398       1,799        2,648          3,385
Other Expense, Net                             38            160           205         186          113            160
                                           ------        -------        ------      ------       ------        -------
Income Before Income Taxes                  2,451          2,947         2,192       1,613        2,535          3,224
Provision for Income Taxes                    953          1,168           875         370        1,020          1,266
                                           ------        -------        ------      ------       ------        -------
Net Income                                 $1,498        $ 1,780        $1,317      $1,243       $1,515        $ 1,958
                                           ======        =======        ======      ======       ======        =======
</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 17.8% to $54.4 million at December 31,
2000, from $46.2 million at June 30, 2000. Accounts receivable increased 33.4%
from $4.2 million at June 30, 2000 to $5.6 million at December 31, 2000. The
increase in accounts receivable can be attributed to an increase in sales for
the quarter ended December 31, 2000 as compared to sales for the quarter ended
June 30, 2000, especially during the month of December. Ravenswood's inventory
increased by 31.9% or $6.5 million from $20.5 million at June 30, 2000 to $27.1
million on December 31, 2000. The increase in inventory is primarily due to the
receipt of grapes for the 2000 harvest. Property, plant and equipment, net of
depreciation, decreased $134,903 from $14.8 million at June 30, 2000 to $14.7
million at December 31, 2000.

Liabilities

Ravenswood's total liabilities increased 29.3% to $20.5 million at December 31,
2000, from $15.9 million at June 30, 2000. The increase was primarily due to
purchases of grapes received for the 2000 harvest and reflected in accounts
payable. At December 31, 2000,

                                       12
<PAGE>
Ravenswood's long-term liabilities outstanding were $11.0 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 $6.3 million at December 31, 2000, 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 $76,257 for the three months ended December
31, 2000 as compared to $1.1 million used for operations for the three months
ended December 31, 1999. The principal uses of cash from operations for the
three months ended December 31, 2000 were the acquisition of inventory,
especially grapes received through the harvest, payment of income taxes and
payment of accounts payable. The principal source of cash for the three months
ended December 31, 2000 was net income. Net cash provided by operations was $1.1
million for the six months ended December 31, 2000, as compared to $727,389 used
by operations for the six months ended December 31, 1999. The principal uses of
cash from operations for the six months ended December 31, 2000 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 $60,252 for the three months
ended December 31, 2000 as compared to $2.4 million for the three months ended
December 31, 1999. The principal use of cash for investing activities for the
three months ended December 31, 2000 was primarily purchases of plant equipment.
Net cash used for investing activities totaled $170,952 for the six months ended
December 31, 2000, as compared to $4.5 million for the six months ended December
31, 1999. The principal use of cash for the six months ended December 31, 2000
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 $154,275 for the three months ended
December 31, 2000, as compared to $2.1 million provided by financing activities
for the three months ended December 31, 1999. The principal use of cash for the
three months ended December 31, 2000 was repayment of long-term debt while the
principal source of cash for the three months ended December 31, 1999 was
financing from Pacific Coast Farm Credit Association to fund construction of the
Quarry Facility. Net cash used by financing activities was $351,227 for the six
months ended December 31, 2000, as compared to $1.4 million provided by
financing activities for the six months ended December 31, 1999. The principal
use of cash for the six months ended December 31, 2000 was repayment of
long-term debt while the principal source of cash for the six months ended
December 31, 1999 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

                                       13
<PAGE>
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 or third fiscal
quarters. Cash requirements also fluctuate depending upon the level and timing
of capital spending and tax payments.

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 December
31, 2000, 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

                                       14
<PAGE>
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.

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.

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.

                                       15
<PAGE>
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.

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.

                                       16
<PAGE>
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.

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.

                                       17
<PAGE>
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.

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 2,243,976 shares of common stock, or
approximately 44.8% 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

                                       18
<PAGE>
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.

                                       19
<PAGE>
                             RAVENSWOOD WINERY, INC.

                           PART II. OTHER INFORMATION

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.

(IN THOUSANDS)

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
 December 31, 2000:
  Working capital                                     $2,297
  Retirement of debt                                  $1,000
  Expansion of production facilities                  $3,350

-----------
* 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.

Item 4. Submission of Matters to a Vote of Security Holders

The following matters were submitted to the shareholders at Ravenswood's Annual
Meeting of Shareholders held on November 7, 2000. Each of these matters was
approved by a majority of the shares present at the meeting.

(1)  The uncontested reelection of each member of the Board of Directors:

     Name                       Shares Voted For          Shares Withheld

     W. Reed Foster             4,571,925                 5,110
     Joel E. Peterson           4,571,925                 5,110
     Callie S. Konno            4,571,915                 5,120
     Justin M. Faggioli         4,571,534                 5,501
     James F. Wisner            4,571,825                 5,210
     Robert E. McGill, III      4,571,725                 5,310
     John D. Nichols            4,571,635                 5,400

(2)  Amendment to the 1999 Equity Incentive Plan

     Shares voted for:          2,965,233
     Shares voted against:      59,337
     Abstain:                   945
     Broker Non-Vote            1,833,414

(3)  Ratification of the appointment of Ravenswood's Independent Auditors

     Shares voted for:          4,535,784
     Shares voted against:      1,876
     Abstentions:               39,375
     Broker Non-votes:          281,894

Item 6. Exhibits and Reports on Form 8-K

(b)      Reports on Form 8-K.

         None.

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<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: February 12, 2001         Ravenswood Winery, Inc.


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

Dated: February 12, 2001

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

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