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                                   FORM 10Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                 Quarterly Report Under Section 13 or 15 (d)
                   of the Securities Exchange Act of 1934



For the Quarter ended      MARCH 31, 1997     
                     -------------------------
Commission file number          0-2246        
                      ------------------------

                           VESTRO NATURAL FOODS INC.
            (Exact name of Registrant as specified in its charter)


          DELAWARE                                         11-1676942
-------------------------------                 -------------------------------
(State or other jurisdiction of                           (IRS Employer
incorporation or organization)                       Identification Number)

           1065 EAST WALNUT STREET, CARSON, CALIFORNIA      90746
-------------------------------------------------------------------------------
            (Address of principal executive offices)      (Zip code)

                                (310) 886-8200
                        -------------------------------
                        (Registrant's telephone number)

Indicate by check mark whether the Registrant (1) has filed all reports 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       
                                  -------       -------

As of April 30, 1997, 5,950,588 shares of the Registrant's Common Stock, par 
value $.01 were issued and outstanding.


                                  Page 1 of 9

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                  VESTRO NATURAL FOODS INC. AND SUBSIDIARIES
                     CONSOLIDATED CONDENSED BALANCE SHEET

                                    ASSETS
                                                        March 31,  December 31,
                                                          1997         1996    
                                                      -----------  ------------
                                                      (Unaudited)
Current assets:
    Cash and cash equivalents                         $   604,000   $     1,000
    Accounts receivable trade - net                     2,110,000     2,105,000
    Inventories                                         4,235,000     3,779,000
    Prepaid expenses and other                            665,000       632,000
                                                      -----------   -----------
       Total current assets                             7,614,000     6,517,000
                                                      -----------   -----------
Properties, at cost:
    Machinery and equipment                               690,000       667,000
    Leasehold improvements                                 16,000        16,000
                                                      -----------   -----------
                                                          706,000       683,000
    Less accumulated depreciation                         539,000       514,000
                                                      -----------   -----------
                                                          167,000       169,000
Excess of cost over net assets of
 businesses acquired - net                              6,641,000     6,694,000

Other assets                                              329,000       395,000
                                                      -----------   -----------
       Total assets                                   $14,751,000   $13,775,000
                                                      -----------   -----------

See accompanying notes to consolidated financial statements.

                                       2

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                  VESTRO NATURAL FOODS INC. AND SUBSIDIARIES
                    CONSOLIDATED CONDENSED BALANCE SHEETS

                     LIABILITIES AND SHAREHOLDERS' EQUITY


                                                        March 31,  December 31,
                                                          1997         1996    
                                                      -----------  ------------
                                                      (Unaudited)
Current liabilities:

    Accounts payable                                  $ 2,798,000   $ 1,713,000
    Notes Payable-current portion                         861,000       849,000
    Accrued liabilities                                   608,000       786,000
                                                      -----------   -----------
    Total current liabilities                           4,267,000     3,348,000
Notes Payable                                           1,687,000     1,913,000
                                                      -----------   -----------
    Total liabilities                                   5,954,000     5,261,000

Commitments and contingencies (Note 3)

    Common stock, $.01 par value, 30,000,000
    shares authorized: 5,950,588
    shares issued and outstanding                         60,000         60,000
    Additional paid-in capital                        16,758,000     16,758,000
    Accumulated deficit                               (8,021,000)    (8,304,000)
                                                      -----------   -----------
                                                       8,797,000      8,514,000
                                                      -----------   -----------
Total liabilities and shareholders' equity           $14,751,000    $13,775,000
                                                      -----------   -----------

See accompanying notes to consolidated financial statements.

                                       3

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                  VESTRO NATURAL FOODS INC. AND SUBSIDIARIES
                        CONSOLIDATED INCOME STATEMENT
                                 (Unaudited)

                                                         Three Months Ended
                                                              March 31,
                                                       ------------------------
                                                           1997         1996
                                                       -----------  -----------
Net sales                                              $ 8,098,000  $ 8,100,000
Cost of sales                                            4,935,000    5,062,000
                                                       -----------  -----------
Gross profit                                             3,163,000    3,038,000
Selling, general and
      administrative expense                             2,792,000    2,704,000
                                                       -----------  -----------
Operating income                                           371,000      334,000
Interest & other income (expense)                          (47,000)     (68,000)
                                                       -----------  -----------
Net Income before income taxes                             324,000      266,000
Income tax provision                                        41,000        8,000
                                                       -----------  -----------
Net Income                                             $   283,000  $   258,000

Earnings per common share                              $       .04  $       .04 
                                                       -----------  -----------

See accompanying notes to consolidated financial statements.

                                       4

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                  VESTRO NATURAL FOODS INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                               (Unaudited)

                                                         Three Months Ended
                                                              March 31,
                                                       ------------------------
                                                           1997         1996
                                                       -----------  -----------
Cash flows from operating activities:

  Net income                                           $  283,000   $ 258,000
  Adjustments to reconcile net income
   to net cash provided (used) by
   operating activities:
    Depreciation and amortization                          78,000      72,000
   Provision for doubtful accounts                          9,000       9,000
  Change in assets and liabilities,
    net of effect of business acquisitions:
    (Increase) decrease in accounts receivable            (14,000)   (429,000)
    (Increase) decrease in inventories                   (456,000)     37,000
    (Increase) decrease in prepaid
     expenses and other                                   (33,000)     38,000
    Increase (decrease) in accounts payable             1,085,000    (178,000)
    Increase (decrease) in other accrued
     liabilities                                         (178,000)    178,000
                                                       ----------   ---------
  Total adjustments
                                                          491,000    (273,000)
                                                       ----------   ---------
  Net cash provided (used) by
    operating activities                                  774,000     (15,000)
                                                       ----------   ---------
Cash flows from investing activities:
    Expenditures for equipment                            (23,000)    (38,000)
    (Increase) decrease in other assets                    66,000      46,000
                                                       ----------   ---------

  Net cash provided (used) by investing
    activities                                             43,000       8,000
                                                       ----------   ---------
Cash flows from financing activities:
  Net borrowings (payments) of
    long-term obligations                                (214,000)   (169,000)
                                                       ----------   ---------
  Net cash provided (used) by
    financing activities                                 (214,000)   (169,000)
                                                       ----------   ---------
Increase (decrease) in cash                               603,000    (176,000)
Cash and cash equivalents, beginning
 of period                                                  1,000     192,000
                                                       ----------   ---------
Cash and cash equivalents, end of period               $  604,000   $  16,000
                                                       ----------   ---------

See accompanying notes to consolidated financial statements.

                                       5

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                  VESTRO NATURAL FOODS INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheet as of March 31, 1997, and the consolidated 
statements of operations and cash flows for the three months ended March 31, 
1997 and March 31, 1996 have been prepared by the Company, without audit.  In 
the opinion of management, all adjustments necessary to present fairly the 
financial position, results of operations and changes in financial position 
at March 31, 1997 and for all periods presented have been made.  Such 
adjustments consisted only of normal recurring items.

Certain information and footnote disclosures normally included in annual 
financial statements have been condensed or omitted.  It is suggested that 
these consolidated financial statements be read in conjunction with the 
financial statements and notes thereto included in the Company's Annual 
Report on Form 10-K for the year ended December 31, 1996.  The results of 
operations for the periods ended March 31, 1997 and March 31, 1996 are not 
necessarily indicative of the operating results for the full years.

NOTE 1.  PROVISION FOR INCOME TAXES

Effective January 1, 1993, the Company adopted SFAS No. 109 for accounting 
for income taxes.  The adoption of SFAS No. 109 did not have a material 
effect on the Company's net income for the first quarter of 1997.

For Federal tax purposes, the Company has a tax basis net operating loss 
carryforward of $2,700,000 expiring through 2009.  During the first quarter 
of 1997, the income tax provision reflects the utilization of available 
Federal operating loss carryforwards in lieu of income taxes that would have 
been incurred.  Utilization of the remaining carryforwards is dependent on 
future taxable income.  

NOTE 2.  EARNINGS (LOSS) PER SHARE

Earnings (loss) per share amounts are based on the weighted average number of 
shares outstanding - 6,436,231 in 1997 and 6,223,100 in 1996.  Assumed 
exercise of outstanding warrants and options have been considered in the 
computation of per share data to the extent they would cause dilution.  

NOTE 3.  CONTINGENCIES

Management has considered information furnished by legal counsel of the 
current status of all outstanding legal proceedings and the development of 
these matters to date.  Based upon this review, it is the opinion of 

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management that adequate provision has been made for all reasonable estimable 
costs and that the ultimate aggregate liability, if any, should not 
materially affect the consolidated financial statements.

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

RESULTS OF OPERATIONS

Net sales for the quarter ended March 31, 1997 of $8,098,000 were even with 
the prior year's level of $8,100,000.  Sales of the Company's non dairy 
beverage and canned product categories continued their growth compared to the 
prior year, but the snack foods category was below the first quarter of 1996. 
In the prior year, there were significant product introduction of snack foods 
which enhanced the sales of that period. 

Gross profit of the Company was $3,163,000 or 39.1% of sales for the quarter 
ended March 31, 1997 compared to $3,038,000 or 37.5% of sales in 1996.  The 
gross margin increase of 1.6% was caused by the Company's policy of pricing 
and formulating new products to meet higher margin standards than many of the 
older items.  As these new products attain a higher percentage of the 
Company's sales volume, the mix has produced an overall increase in margins.

Selling, general and administrative expenses were $2,792,000 or 34.5% of 
sales for the quarter ended March 31, 1997 compared to $2,704,000 or 33.4% of 
sales in 1996.  The increase was due largely to programs with distributors 
and retailers to promote the Company's products at attractive retail prices.

The Company had net interest and other expense of $47,000 in the current 
quarter compared to net interest and other expense of $68,000 in the prior 
year.  The Company recorded $41,000 of income tax expense, representing state 
taxes and the federal alternative minimum tax, in the quarter ended March 31, 
1997, compared to $8,000 in the first quarter of 1996.  

As a result of the above, the Company recorded net income of $283,000 or $.04 
per share for the first quarter ended March 31, 1997,  while in the quarter 
ended March 31, 1996, the Company recorded net income of $258,000, or $.04 
per share.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1997, the Company had $604,000 of cash.  The Company has a line 
of credit with a bank to provide up to $4,000,000 of financing based upon 
certain percentages of the Company's accounts receivable and inventory.  At 
March 31, 1997, the Company had no borrowing and $2,600,000 of borrowing 
capacity on this line of credit.

                                       7

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The Company has outstanding $2,518,000 of Subordinated Notes.  The 
Subordinated Notes call for monthly principal and interest payments. During 
the 12 months ending December 31, 1997, the Company is obligated to pay 
$831,000 of principal and $187,000 of interest on these notes.  

The Company projects that cash flow from operations together with its current 
cash balance and the availability under its credit line should be sufficient 
to support its operating needs for at least the current fiscal year.

                         Part II - OTHER INFORMATION

None.

                                       8

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                  VESTRO NATURAL FOODS INC. AND SUBSIDIARIES
                                  SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934 the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                    VESTRO NATURAL FOODS INC. 

Date:   May 12, 1997                By:  /s/  B. Allen Lay 
     ------------------                ------------------------------------
                                        B. Allen Lay
                                        Chairman of the Board and Chief
                                        Executive Officer

Date:   May 12, 1997                By:  /s/  Stephen Schorr
     ------------------                ------------------------------------
                                       Stephen I. Schorr
                                       Vice President, Finance

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