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                        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, 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 May 12, 2000
was 4,855,053.

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


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<PAGE>

                             RAVENSWOOD WINERY, INC.

                          PART I. FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS                                             Page
                                                                           ----

     Balance Sheets as of March 31, 2000 and June 30, 1999.                  2

     Statements  of Income for the three  months and nine  months
     ended March 31, 2000 and 1999.                                          3

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

     Notes to Financial Statements.                                          5

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


                           PART II. OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITES AND USE OF PROCEEDS                          21

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


                                       1

<PAGE>

<TABLE>
                                                RAVENSWOOD WINERY, INC.
                                             PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                                RAVENSWOOD WINERY, INC.
                                                     BALANCE SHEET
<CAPTION>
                                                                                       March 31,            June 30,
                                                                                         2000                 1999
                                                                                      -----------         -----------
                                    ASSETS                                            (unaudited)
<S>                                                                                   <C>                 <C>
Current assets:
 Cash and cash equivalents                                                            $ 6,891,983         $11,390,903
 Accounts receivable, less allowance of $10,000                                         5,035,388           2,763,418
 Inventories                                                                           19,244,006          14,581,973
 Prepaid expenses                                                                         356,927             116,676
 Deferred tax assets                                                                      155,000             162,800
                                                                                      -----------         -----------
     Total current assets                                                              31,683,304          29,015,770
 Property, plant and equipment, net                                                    14,795,450           9,001,147
 Note receivable from shareholder                                                         314,475             314,475
 Other assets                                                                              98,357             186,921
                                                                                      -----------         -----------
                                                                                      $46,891,586         $38,518,313
                                                                                      ===========         ===========

                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Current portion of long-term debt                                                      $ 102,578           $ 109,722
 Current portion of capital lease obligations                                             538,016             368,203
 Short-term borrowings                                                                  1,000,000           1,700,000
 Accounts payable                                                                       4,471,502           3,382,118
 Accrued commissions                                                                      607,165             396,358
 Accrued liabilities                                                                      742,944             433,011
                                                                                      -----------         -----------
     Total current liabilities                                                          7,462,205           6,389,412

Long-term liabilities:
 Long-term debt, net                                                                    6,277,839           4,525,231
 Capital lease obligations, net                                                         2,414,558           1,551,762
 Convertible debentures                                                                 1,687,500           2,502,500
                                                                                      -----------         -----------
     Total liabilities                                                                 17,842,102          14,968,905
                                                                                      -----------         -----------

Shareholders' equity:
 Preferred stock, no par value; 1 million shares authorized, none issued                   --                  --
 Common stock, no par value; 20 million shares authorized,
  4,855,053 and 4,568,352 issued and outstanding                                       15,038,965          14,211,018
 Retained earnings                                                                     13,933,609           9,338,390
 Unrealized gain on available-for-sale securities                                          76,910              --
                                                                                      -----------         -----------
     Total shareholders' equity                                                        29,049,484          23,549,408
                                                                                      -----------         -----------
                                                                                      $46,891,586         $38,518,313
                                                                                      ===========         ===========


<FN>
                                    See accompanying notes to financial statements.
</FN>
</TABLE>
                                                          2

<PAGE>

<TABLE>
                                                RAVENSWOOD WINERY, INC.
                                                  STATEMENT OF INCOME
                                                      (UNAUDITED)
<CAPTION>

                                                Three months ended March 31,               Nine months ended March 31,
                                               -----------------------------             -------------------------------
                                                  2000               1999                    2000               1999
                                               ----------         ----------             -----------         -----------
<S>                                            <C>                <C>                    <C>                 <C>
Gross Sales                                    $8,692,139         $5,415,318             $27,418,528         $17,610,314
  Less excise taxes                              (325,967)          (272,035)               (859,657)           (547,830)
  Less discounts, allowances
  and returns                                    (239,319)          (182,226)               (816,243)           (518,910)
                                               ----------         ----------             -----------         -----------

Net sales                                       8,126,853          4,961,057              25,742,628          16,543,574

Cost of goods sold                              3,897,343          2,404,886              12,174,519           7,471,357
                                               ----------         ----------             -----------         -----------

Gross profit                                    4,229,510          2,556,171              13,568,109           9,072,217

Operating expenses                              1,831,691          1,395,840               5,573,023           3,735,849
                                               ----------         ----------             -----------         -----------

Operating income                                2,397,819          1,160,331               7,995,086           5,336,368
                                               ----------         ----------             -----------         -----------

Interest expense                                 (237,883)          (133,378)               (594,327)           (357,685)
Other income (expenses)                            32,514             41,726                 190,590             119,077
                                               ----------         ----------             -----------         -----------
                                                 (205,369)           (91,652)               (403,737)           (238,608)
                                               ----------         ----------             -----------         -----------

Income before income taxes                      2,192,450          1,068,679               7,591,349           5,097,760

Provision for income taxes                        875,000            312,451               2,996,130           2,056,300
                                               ----------         ----------             -----------         -----------

Net income                                     $1,317,450         $  756,228             $ 4,595,219         $ 3,041,460
                                               ==========         ==========             ===========         ===========



Earnings per share:
    Basic                                      $     0.27         $     0.22             $      0.99         $      0.87
                                               ==========         ==========             ===========         ===========
    Diluted                                    $     0.27         $     0.21             $      0.94         $      0.80
                                               ==========         ==========             ===========         ===========

Weighted average number of
  common shares outstanding:
    Basic                                       4,855,053          3,498,945               4,664,947           3,498,945
                                               ==========         ==========             ===========         ===========
    Diluted                                     5,008,985          3,953,588               5,007,370           3,896,083
                                               ==========         ==========             ===========         ===========

<FN>
                                    See accompanying notes to financial statements.
</FN>
</TABLE>
                                                          3

<PAGE>

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

                                                        Three months ended March 31,          Nine months ended March 31,
                                                       ----------------------------          ----------------------------
                                                           2000             1999                 2000             1999
                                                       -----------       ----------          -----------      -----------
<S>                                                    <C>               <C>                 <C>              <C>
Operations:
Net income                                             $ 1,317,450       $  756,228          $ 4,595,219      $ 3,041,460
Items not requiring the current
use of cash:
  Depreciation and amortization                            268,649          121,572              727,480          292,240
  Unrealized capital appreciation                           33,694            6,817               76,910            6,817
  Deferred income taxes                                          -                -                7,800                -
Changes in other operating items:
  Accounts receivable                                      108,649         (155,047)          (2,271,970)        (903,029)
  Prepaid income taxes                                           -           73,849                    -           73,849
  Inventories                                              716,304         (793,822)          (4,662,033)      (3,297,802)
  Deferred tax asset                                             -          242,322                    -          242,322
  Prepaid expenses                                         (34,052)         (72,188)            (240,251)         (45,286)
  Other assets                                              (4,107)               -              (15,995)               -
  Accounts payable                                      (1,883,809)         (55,950)           1,089,384        1,373,769
  Accrued liabilities                                       99,962          334,420              307,205          200,865
  Income taxes payable                                           -                -                    -                -
  Accrued commissions                                      (70,788)          81,239              210,807          210,008
                                                       -----------       ----------          -----------      -----------
Cash provided by (used for) operations                     551,952          539,440             (175,444)       1,195,213
                                                       -----------       ----------          -----------      -----------

Investing:
  Shareholder receivables                                        -           28,472                    -          (30,963)
  Additions to plant & equipment                        (1,127,413)        (660,483)          (5,611,873)      (1,208,873)
  Cash used for investing activities                    (1,127,413)        (632,011)          (5,611,873)      (1,239,836)

Financing:
  Short-term borrowings, net                                     -          150,000             (700,000)        (250,000)
  Proceeds from long-term debt                                   -          122,080            2,252,036          672,080
  Proceeds from convertible debentures                           -          243,750                    -        1,687,500
  Proceeds from sale of securities                               -           39,761               12,947        1,687,500
  Repayments of related parties' notes                           -         (165,143)                   -         (165,143)
  Repayments of long-term debt                            (118,251)          26,104             (276,586)        (194,231)
  Deferred stock offering costs                                  -         (371,272)                   -         (371,272)
                                                       -----------       ----------          -----------      -----------
  Cash provided by (used for) financing activities        (118,251)          45,280            1,288,397        3,066,434
                                                       -----------       ----------          -----------      -----------

Change in cash & cash equivalents                         (693,712)         (47,291)          (4,498,920)       3,021,811

Balance at beginning of period                           7,585,695        3,171,374           11,390,903          102,272
                                                       -----------       ----------          -----------      -----------
Balance at end of period                               $ 6,891,983       $3,124,083          $ 6,891,983      $ 3,124,083
                                                       ===========       ==========          ===========      ===========


Cash paid during the period for:
  Interest                                             $   274,229       $  196,764          $   612,687      $   437,243
                                                       ===========       ==========          ===========      ===========
  Taxes                                                $   740,000       $   85,000          $ 2,995,000      $ 1,755,000
                                                       ===========       ==========          ===========      ===========

Noncash investing and financing:
  Plant and equipment purchased with
  long-term liabilities                                $   185,759       $        -          $   805,353      $   175,507
                                                       ===========       ==========          ===========      ===========
  Conversion of convertible debentures
  to common stock                                      $         -       $        -          $   815,000      $         -
                                                       ===========       ==========          ===========      ===========

<FN>
                                    See accompanying notes to financial statements.
</FN>
</TABLE>
                                                          4

<PAGE>

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                             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  pursuant  to the  rules  and
regulations  of the  Securities  and  Exchange  Commission,  without  audit.  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 and nine months ended March 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,  1999 dated  September  29,  1999 and its  Quarterly
Report on Form 10-QSB dated February 8, 2000.

NOTE 2 - Reclassifications:

Certain prior period amounts have been  reclassified  in order to conform to the
current  period  presentation.  These  changes do not impact gross margin or net
income for any period.

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.

On December 31, 1999,  debentures  with a face value of $815,000 were  converted
into 285,250 shares of the Company's common stock. During the three month period
ended  December  31,  1999,  1,451  shares of common  stock  were  issued  under
Ravenswood's Employee Stock Purchase Plan.

NOTE 4 - Inventories:

Inventories are summarized as follows:

                                           March 31,            June 30,
                                              2000                1999
                                       -------------------  ------------------
                                          (Unaudited)

Bulk wine                                     $15,454,265         $10,355,759
Bottled wine                                    3,331,968           3,870,548
Crop costs                                         74,542              88,725
Supplies                                          223,745             124,298
Tasting room merchandise                          159,486             142,643
                                       -------------------  ------------------
                                              $19,244,006         $14,581,973
                                       ===================  ==================


                                        5

<PAGE>

NOTE 5 - Property, plant and equipment:

Property, plant and equipment is summarized as follows:

                                             March 31,             June 30,
                                                2000                 1999
                                         ------------------   ------------------
                                            (Unaudited)

Land                                           $    245,135          $   245,135
Vineyards                                           134,033              134,033
Vineyards under development                         211,440              211,440
Buildings and improvements                        1,647,637            1,647,637
Leasehold improvements                              174,331              174,331
Machinery and equipment                             846,160              835,850
Barrels and equipment held under
  capital leases                                  3,911,864            2,623,977
Tanks                                               172,172              145,688
Office equipment                                    274,046              131,127
Transportation equipment                             55,499               38,469
Construction in progress                          9,399,128            4,466,534
                                         ------------------   ------------------
                                                 17,071,445           10,654,221
Less accumulated depreciation                     2,275,995            1,653,074
                                         ------------------   ------------------
                                               $ 14,795,450          $ 9,001,147
                                         ==================   ==================

NOTE 6 - Comprehensive income:

In June 1997,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 130 - Reporting  Comprehensive Income ("SFAS
130").  SFAS 130  requires the  additional  reporting of a new measure of income
which takes into account certain elements  otherwise recorded as part of equity.
For all periods  presented,  the difference between net income and comprehensive
income   consists  of  the  changes  in  the   unrealized   gain  in  securities
available-for-sale included as part of the Company's equity.

         The  following  is a  reconciliation  of net income  and  comprehensive
income:

                                                   (Unaudited)
                                    -------------------------------------------
                                     Three months ended     Nine months ended
                                            March 31,           March 31,
                                    --------------------  ---------------------
                                       2000       1999       2000       1999
                                    ----------  --------  ---------- ----------

  Net income                        $1,317,450  $756,228  $4,595,219 $3,041,460
  Change in unrealized gain on
    available-for-sale securities       33,694         -      76,910          -
                                    ----------  --------  ---------- ----------
  Comprehensive income              $1,351,144  $756,228  $4,672,129 $3,041,460
                                    ==========  ========  ========== ==========


                                       6

<PAGE>

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

Forward-Looking Statements

From time to time,  statements  made by  Ravenswood's  employees or  information
included in  Ravenswood's  filings with the Securities  and Exchange  Commission
(including  this Form  10-QSB) may contain  statements  that are not  historical
facts, so called  "forward-looking  statements,"  which are subject to risks and
uncertainties   that  could   cause   actual   results  to  differ   materially.
Forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation  Reform Act of 1995.  When used in this Form
10-QSB, the terms "anticipates,"  "expects," "estimates,"  "believes," and other
similar  terms as they relate to Ravenswood  or its  management  are intended to
identify such forward-looking  statements.  For example,  statements made herein
relating to operating  expenses,  gross sales  attributable to specific  product
series, and future capital expenditures, are forward-looking statements. 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;  and (iii)
changes in the wine industry regulatory environment.  Each of these factors, and
others,  are  discussed  beginning  on page 15 of this report and in the section
entitled  "Factors that May Affect Future Results" of  Ravenswood's  Form 10-KSB
for the fiscal year ended June 30, 1999,  filed with the Securities and Exchange
Commission.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which speak only as of the date hereof. Ravenswood
undertakes no obligation to update or revise 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  93% of gross sales in the 1999 fiscal year,
with sales of Zinfandel accounting for approximately 67% 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,
1999,  Ravenswood  realized  total gross sales of $23.7 million from the sale of
270,760 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 particular,  as sales of the
value-priced  Vintners  Blend Series have  increased  as a  percentage  of gross
sales,  Ravenswood's  gross  margin  has  decreased.  The gross  margin  for the
Vintners  Blend  Series  traditionally  is  also  more  variable  than  that  of
Ravenswood's  higher-priced  wine products 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 no bulk wine purchase contracts.  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
subsequent  fiscal year. In addition,  the release dates of some of Ravenswood's
County Series wines  fluctuate


                                       7

<PAGE>

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 29
other states.  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 wines shops. Ravenswood
uses both  brokers and  distributors  in most of the foreign  countries in which
Ravenswood's wines are sold.

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 five 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  48%  of
Ravenswood's gross sales in the 1999 fiscal year. Of this amount,  approximately
9% of gross  sales  were  retail  purchases  by  California  and  non-California
consumers through Ravenswood's tasting room and approximately 39% of gross sales
were sales to retail  accounts.  We expect  similar  results  for  fiscal  2000.
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:

                                      Three Months Ended       Nine Months Ended
                                          March 31,                March 31,
                                          ---------                ---------
Statement of Income Data:              1999       2000          1999       2000

Net Sales                             100.0%     100.0%        100.0%     100.0%
Cost of Goods Sold                     48.5       48.0          45.2       47.3
                                      -----      -----         -----      -----
Gross Profit                           51.5       52.0          54.8       52.7
Operating Expenses                     28.1       22.5          22.6       21.6
                                       ----       ----          ----       ----
Operating Income                       23.4       29.5          32.2       31.1
Other Expense, net                      1.9        2.5           1.4        1.6
                                      -----      -----         -----      -----
Income Before Income Taxes             21.5       27.0          30.8       29.5
Provision for Income Taxes              6.3       10.8          12.4       11.6
                                      -----      -----         -----      -----
Net Income                             15.2%      16.2%         18.4%      17.9%
                                      =====      =====         =====      =====

Three Months Ended March 31, 2000 and 1999

Sales

Net sales of Ravenswood's products increased to $8.1 million in the three months
ended March 31,  2000,  from $5.0  million in the three  months  ended March 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 March 31, 2000,
case sales  increased  to 106,249  cases from 65,108  cases in the three  months
ended March 31, 1999,  while the average price per case decreased to $81.28 from
$82.36 in these respective periods.  The average price per case decreased as the
Vintners Blend Series increased as a percentage of gross sales.  Gross sales for
each  product  series  grew in the  three  months  ended  March 31,  2000,  with
increases for Vintners Blend Series, County Series and Vineyard Designate series
of 69.0%, 28.6% and 144.8%,  respectively,  over the same period ended March 31,
1999.  The large increase in sales for the Vineyard  Designate  series is mainly
attributable to the availability of product in the third quarter of fiscal 2000.

The percentages of gross sales attributable to the Vintners Blend Series, County
Series and Vineyard Designate Series were 68.1%,  23.4% and 7.9%,  respectively,
for the three months ended March 31, 2000, as compared to 64.6%, 29.2% and 5.2%,
respectively,  in the three  months ended March 31,  1999.  Sales of  Ravenswood
branded merchandise accounted for approximately .6% of gross sales for the three
months  ended March 31,  2000,  as compared to 1.0% of gross sales for the three
months ended March 31, 1999.

Cost of Goods Sold

Cost of goods sold  increased to $3.9  million,  or 48.0% of net sales,  for the
three months ended March 31, 2000, from $2.4 million, or 48.5% of net sales, for
the three months ended March 31, 1999.  Cost of goods


                                       9

<PAGE>

sold, as a percentage of net sales,  remained fairly  consistent as the combined
mix of sales of the Vintners Blend Series,  County Series and Vineyard Designate
series were relatively similar for both periods.

Gross Profit

Ravenswood's  gross profit  increased to $4.2 million for the three months ended
March 31, 2000, from $2.6 million for the three months ended March 31, 1999, and
increased as a percentage  of net sales to 52.0% from 51.5% in these  respective
periods.  The increase in aggregate  gross profit is primarily  attributable  to
increases in sales volumes across all of Ravenswood's product series.

Operating Expenses

Operating  expenses  increased  to $1.8 million for the three months ended March
31, 2000,  from $1.4  million for the three  months  ended March 31,  1999,  and
decreased as a percentage  of net sales to 22.5% from 28.1% in these  respective
periods.  The increase in the amount of operating  expenses is  attributable  to
several  different  factors.  Increased sales volumes resulted in an increase in
brokerage commissions. Additionally, Ravenswood has incurred additional expenses
as a public  company,  such as legal and accounting  fees.  Ravenswood  became a
public  company in the quarter  ended June 30,  1999.  The decrease in operating
expenses as a percentage of net sales can partially be attributed to the accrual
of approximately  half of annual employee bonuses in the third quarter of fiscal
1999,  while a portion of these  bonuses  have been  accrued in each  quarter of
fiscal  2000.  Additionally,  as  Ravenswood  has  increased  sales  it has  not
increased  administrative  staff  proportionately.  However,  in April,  2000, a
portion of  Ravenwood's  production  and  administrative  staffs  moved into new
offices at the Quarry  Facility.  With the  additional  space  available  at the
Quarry Facility,  Ravenswood expects to expand its production and administrative
staffs to support its sales and production growth.

Other Expense, Net

Other expense  amounted to $205,369 and $91,652,  or 2.5% and 1.9% of net sales,
in the three months ended March 31, 2000, and 1999,  respectively.  The increase
in  other  expenses  is  primarily  attributable  to  interest  incurred  on the
construction  loan for its new  production  facility,  referred to as the Quarry
Facility,  and on capital  leases used to finance the purchase of equipment  for
the Quarry  Facility.  Some interest  expense is offset by interest  income from
unspent proceeds of Ravenswood's initial public offering.

Provision for Income Taxes

The provision for income taxes  reflects an estimated  annualized  effective tax
rate of 39.9% for the three  months  ended  March  31,  2000,  and 29.3% for the
corresponding period in fiscal 1999. The increase is due to the recognition of a
deferred  tax asset in the third  quarter of fiscal  1999 for which  there is no
corresponding item in fiscal 2000.

Nine Months Ended March 31, 2000 and 1999

Sales

Net sales of Ravenswood's products increased to $25.7 million in the nine months
ended March 31,  2000,  from $16.5  million in the nine  months  ended March 31,
1999.  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,


                                       10

<PAGE>

2000,  case sales  increased  to 312,902  cases from  195,600  cases in the nine
months  ended March 31,  1999,  while the average  price per case  decreased  to
$86.76  from $88.81 in these  respective  periods.  The  average  price per case
decreased as the Vintners Blend Series increased as a percentage of gross sales.
Gross sales for each  product  series  grew in the nine  months  ended March 31,
2000,  with  increases  for Vintners  Blend  Series,  County Series and Vineyard
Designate series of 77.3%, 23.4% and 43.8%,  respectively,  over the same period
ended March 31, 1999.

The percentages of gross sales attributable to the Vintners Blend Series, County
Series and Vineyard Designate Series were 60.6%, 21.4% and 17.0%,  respectively,
for the nine months ended March 31, 2000, as compared to 53.2%, 27.0% and 18.4%,
respectively,  in the nine months  ended  March 31,  1999.  Sales of  Ravenswood
branded merchandise accounted for approximately 1.0% of gross sales for the nine
months ended March 31,  2000,  and 1.4% of gross sales for the nine months ended
March 31, 1999.

Cost of Goods Sold

Cost of goods sold  increased to $12.2 million,  or 47.3% of net sales,  for the
nine months ended March 31, 2000, from $7.5 million,  or 45.2% of net sales, for
the nine months  ended March 31,  1999.  The increase in cost of goods sold as a
percentage  of net sales is primarily  attributable  to the increase in sales of
Ravenswood's Vintners Blend Series as a percentage of gross sales.

Gross Profit

Ravenswood's  gross profit  increased to $13.6 million for the nine months ended
March 31, 2000,  from $9.1 million for the nine months ended March 31, 1999, and
decreased as a percentage  of net sales to 52.7% from 54.8% in these  respective
periods.  The increase in aggregate  gross profit is primarily  attributable  to
increases  in  sales  volumes  across  all  of   Ravenswood's   product  series.
Traditionally Vintners Blend series wines have a lower percent gross margin than
those of the Vineyard  Designate and County series wines.  The decrease in gross
profit as a percentage of net sales is primarily attributable to the increase in
sales of the Vintners Blend Series as a percentage of gross sales.

Operating Expenses

Operating expenses increased to $5.6 million for the nine months ended March 31,
2000,  from $3.7 million for the nine months ended March 31, 1999, and decreased
as a percentage  of net sales to 21.6% from 22.6% in these  respective  periods.
The  increase in the amount of  operating  expenses is  attributable  to several
different factors.  Increased sales volumes resulted in an increase in brokerage
commissions.  Additionally,  Ravenswood  has incurred  additional  expenses as a
public company,  such as legal and accounting fees.  Ravenswood did not become a
public  company  until the fourth  quarter of 1999.  The  decrease in  operating
expenses as a percentage of net sales can in part be attributed to the fact that
as Ravenswood  has increased  sales it has not  increased  administrative  staff
proportionately.  However,  in April, 2000, a portion of Ravenwood's  production
and  administrative  staffs moved into new offices at the Quarry Facility.  With
the additional  space available at the Quarry  Facility,  Ravenswood  expects to
expand  its  production  and  administrative  staffs  to  support  its sales and
production growth.

Other Expense, Net

Other expense amounted to $403,737 and $238,608,  or 1.6% and 1.4% of net sales,
in the nine months ended March 31, 2000, and 1999, respectively. The increase in
other  expenses  is  primarily   attributable   to  interest   incurred  on  the
construction  loan for its new  production  facility,  referred to as the Quarry
Facility, and on


                                       11

<PAGE>

capital  leases  used to  finance  the  purchase  of  equipment  for the  Quarry
Facility.  Some interest  expense is offset by interest  income from proceeds of
Ravenswood's initial public offering.

Provision for Income Taxes

The provision for income taxes  reflects an estimated  annualized  effective tax
rate of 39.5%  for the nine  months  ended  March  31,  2000,  and 40.3% for the
corresponding  period in fiscal 1999.  The decrease is due to the  effective tax
rate for the nine months ended March 31, 1999 not  reflecting an adjustment  for
deferred taxes and recognition of manufacturer's tax credit.

<TABLE>
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,  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, 1999. 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.
<CAPTION>
                                                                        Quarter Ended
                                                                        (In Thousands)
                                     -----------------------------------------------------------------------------------
                                     December 31,     March 31,      June 30,     September 30,  December 31,   March 31
                                         1998           1999           1999           1999           1999         2000
                                       -------        -------        -------        -------        -------       -------
<S>                                    <C>            <C>            <C>            <C>            <C>           <C>
Statement of Income Data:
Gross Sales                            $ 5,853        $ 5,415        $ 6,119        $ 8,289        $10,437       $ 8,692
 Less Excise Taxes                          51            272            361            335            199           326
 Less Discounts,
    Allowance
    and Returns                            182            182            234            262            315           239
                                       -------        -------        -------        -------        -------       -------
Net Sales                                5,620          4,961          5,525          7,692          9,924         8,127
Cost of Goods Sold                       2,538          2,405          2,788          3,463          4,814         3,897
                                       -------        -------        -------        -------        -------       -------
Gross Profit                             3,082          2,556          2,737          4,229          5,110         4,230
Other Operating Expenses                 1,125          1,396          1,503          1,740          2,001         1,832
                                       -------        -------        -------        -------        -------       -------
Operating Income                         1,957          1,160          1,234          2,489          3,108         2,398
Other (Income) Expense                      74             92            (12)            38            160           205
                                       -------        -------        -------        -------        -------       -------
Income Before Income Taxes               1,884          1,068          1,247          2,451          2,947         2,192
Provision for Income Taxes                 815            312            385            953          1,168           875
                                       -------        -------        -------        -------        -------       -------
Net Income                             $ 1,068        $   756        $   862        $ 1,498        $ 1,780       $ 1,317
                                       =======        =======        =======        =======        =======       =======
</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; (b) how to position its wines competitively; and (c)
which  grape and bulk wine  sources to use to produce  its wines.  In  addition,
variations in 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


                                       12

<PAGE>

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 21.7% to $46.9 million at March 31, 2000,
from $38.5 million at June 30, 1999.  Ravenswood's  inventory increased by 32.0%
or $4.7  million from $14.5  million at June 30, 1999 to $19.2  million on March
31, 2000. Property,  plant and equipment,  net of depreciation,  increased 64.4%
from  $9.0  million  at June  30,  1999 to $14.8  million  at  March  31,  2000.
Ravenswood  expects total assets to continue to increase as  Ravenswood  expands
its inventory.  The rate of growth in property,  plant and equipment is expected
to decrease as the Quarry Facility nears completion.

Liabilities

Ravenswood's total liabilities  increased by 19.2% to $17.8 million at March 31,
2000,  from $15.0  million at June 30,  1999.  At March 31,  2000,  Ravenswood's
long-term  liabilities  outstanding  were $10.4  million  and $1.0  million  was
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 $6.9  million at March 31,  2000,  as compared to
$11.4  million at June 30, 1999.  The decrease in cash and cash  equivalents  is
primarily due to cash required to expand inventory,  to complete construction of
the Quarry Facility and to retire indebtedness.

Net cash  provided by  operations  was $551,952 for the three months ended March
31, 2000 as compared to $539,440 for the three months ended March 31, 1999.  The
principal  sources of cash from  operations  in this  period were net income and
inventory  while the  principal  use of cash was accounts  payable as Ravenswood
began to make payments to growers for grapes  received in the Fall of 1999.  Net
cash used by  operations  was $175,444 for the nine months ended March 31, 2000,
as compared to $1,195,213 provided by operations for the nine months ended March
31, 1999. The principal uses of cash from  operations for the period ended March
31,  2000, were the  acquisition  of  additional  inventory,  especially  grapes
received in the Fall of 1999, and funding accounts receivable. Principal sources
of cash during this period were net income and the increase in accounts payable.


                                       13

<PAGE>

Net cash used for investing activities totaled $1.1 million for the three months
ended March 31, 2000 as compared to $632,011  for the three  months  ended March
31, 1999. The principal use of cash for investing  activities during this period
was primarily the costs associated with construction of the Quarry Facility. Net
cash used for  investing  activities  totaled  $5.6  million for the nine months
ended March 31,  2000,  as compared  to $1.2  million for the nine months  ended
March 31, 1999. The increase was primarily attributable to costs associated with
construction of the Quarry Facility.  Ravenswood  expects that net cash used for
investing  activities  will decrease in the future as the Quarry  Facility nears
completion.

Net cash used for financing  activities  was $118,251 for the three months ended
March 31, 2000, as compared to $45,280 provided by financing  activities for the
three months ended March 31, 1999.  The  principal use of cash during the period
ended March 31,  2000 was the  repayment  of long term debt while the  principal
source of cash for the period  ended  March 31, 1999 was the  completion  of the
sale of securities from Ravenswood's December, 1998, offering. Net cash provided
by  financing  activities  was $1.3  million for the nine months ended March 31,
2000, as compared to $3.1 million for the nine months ended March 31, 1999.  The
principal  source of cash for the nine months ended March 31, 2000 was financing
provided by Pacific Coast Farm Credit Services to construct the Quarry Facility.
The  principal  source of cash for the nine  months  ended  March  31,  1999 was
Ravenswood's sale of securities which was completed in December, 1998.

The majority of Ravenswood's grape purchases occur in the second fiscal quarter,
when the fruit is harvested. 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 1999 harvest,  these payments will be made in the following manner: 42%, 29%
and 17% in the second,  third and fourth quarters of fiscal 2000,  respectively,
and the  remaining  12% in the  first  quarter  of fiscal  2001.  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  $545,000 for the 2000 fiscal year.  Ravenswood
anticipates  that it will  enter  into  additional  leasing  arrangements  as it
increases its production.

In December 1994, Ravenswood completed a private sale of $865,000 of convertible
debentures due December 31, 2004. Each $10,000  debenture was  convertible  into
3,500  shares of common  stock at any time  prior to  December  31,  1999,  upon
request of the holder.  $50,000 of  convertible  debentures  were  converted  to
17,500  shares of  common  stock in  April,  1999.  The  remaining  $815,000  in
convertible  debentures  were  converted  into 285,250 shares of common stock in
December, 1999, when the conversion privilege expired.

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%.


                                       14

<PAGE>

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,
2000,  Ravenswood  had  $1,000,000  outstanding  under this line of  credit.  In
addition, on April 26, 1999 Ravenswood obtained a $4.6 million construction loan
from Pacific Coast for the purpose of financing the  construction  of the Quarry
Facility  which is  estimated  to cost $9.6  million.  The loan is being used as
funds for  construction  are needed.  The loan is secured by the Quarry Facility
and its lease.  The  estimated  $5 million in  remaining  costs to complete  the
facility are to be funded from the December,  1998,  private equity offering and
proceeds from Ravenswood's  initial public offering in April, 1999. Equipment is
being acquired through a $3 million commitment for 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 placements
in 1994 and 1998  described  above,  will be  sufficient  to fund its  presently
anticipated 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 and inventory.

Risks associated with potential Year 2000 problems

Even though to date  Ravenswood  has not  experienced an adverse impact from the
transition  to the Year  2000,  Ravenswood  cannot  provide  assurance  that its
suppliers  and  customers  have not been  affected  in a manner  that is not yet
apparent.  As a  result,  Ravenswood  will  continue  to  monitor  its Year 2000
compliance and Year 2000 compliance of its suppliers and customers.

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


                                       15

<PAGE>

We rely on  annual  contracts,  many of which are not in  writing,  with over 60
independent growers to purchase substantially all of the grapes used in our wine
production.  We  cannot  assure  you  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 do not have contracts with
bulk wine suppliers or agreements that would protect us from fluctuations in the
price or  availability  of bulk wine.  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 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 may be
less than that of our 1997 vintage.  As a result, the growth of our sales may be
limited in fiscal  years 2000 and 2001,  when most of our 1998  vintage  will be
released 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.  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 or diseases.  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


                                       16

<PAGE>

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  wine may reduce the price of
premium wines.  This oversupply 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 1999 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
22% of our gross  sales in the 1999  fiscal  year,  and our ten most  successful
brokers were responsible for 70% of our gross sales in the 1999 fiscal year.

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 1999 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. Generally, the second and third quarters of our fiscal year have
lower sales volumes than the first and fourth  quarters.  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.


                                       17

<PAGE>

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 several 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  must  increasingly  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 are  currently  building  a new  facility,  which we are  calling  the Quarry
Facility,  in order to  increase  our  production  capacity.  While  the  Quarry
Facility is still under construction,  we crushed and fermented a portion of the
1999 harvest at the facility.  Our failure to complete 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.  Upon its  completion,  we expect to use
both the Quarry  Facility and our current  Gehricke Road Facility for a majority
of our operations.

We expect to utilize the Quarry Facility fully upon its completion. As a result,
any  further  expansion  of  our  production  capacity  may  require  us to  use
third-party  production  facilities or 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

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.

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.


                                       18

<PAGE>

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.  In addition,  federal
legislation has been proposed that could significantly  increase excise taxes on
wine.  Other federal  legislation  has been proposed which would prevent us from
selling  wine  directly  through  the  mail  or  the  Internet.   This  proposed
legislation,  or other new  regulations,  requirements  or taxes  could harm our
business and operating  results.  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 the  conversion of all  debentures  held by our directors and executive
officers  and  their  respective  affiliates  and the  exercise  of all  options
exercisable  within 60 days of the date hereof by our  directors  and  executive
officers,  will be converted,  our  directors  and executive  officers and their
respective  affiliates would  beneficially own 2,248,276 shares of common stock,
or  approximately  45.7%  of our  outstanding  common  stock  and  common  stock
equivalents.  Of these shares, 2,064,316 shares, plus an additional 9,765 shares
not held of  record by  Ravenswood's  affiliates,  have been  placed in a voting
trust.  The  trustees of this voting  trust are Messrs.  Foster,  Peterson,  and
Faggioli,  and Ms.  Konno,  all of whom serve as directors of  Ravenswood.  As a
result,  Messrs.  Foster,  Peterson, and Faggioli and Ms. Konno 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  affiliates  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.


                                       19

<PAGE>

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

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 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

Item 2. Changes in Securities and Use of Proceeds
<TABLE>
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:                                                 $552
Net offering proceeds to the Company:                                 $9,528
Approximate use of net offering proceeds through March 31, 2000:

         Working capital                                              $1,265
         Retirement of debt                                           $1,000
         Expansion of production facilities                           $2,300
<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

(a)      Exhibits.

         Exhibit Number
         --------------

                  27.1                      Financial Data Schedule

(b)      Reports on Form 8-K.

         None.


                                       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  12, 2000                             Ravenswood Winery, Inc.

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

Dated: May 12, 2000

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


                                       22