<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q
                                 [ODWALLA LOGO]

(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 3, 2001

                                       OR

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

For the transition period from _________________ to _________________

Commission file number 0-23036

                                  ODWALLA, INC.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                       <C>
                   California                                          77-0096788
 ---------------------------------------------            ------------------------------------
 (State or other jurisdiction of incorporation            (I.R.S. Employer Identification No.)
               or organization)
</TABLE>


              120 Stone Pine Road, Half Moon Bay, CA 94019 (Address
                  and zip code of principal executive offices)
                                 (650) 726-1888
                         (Registrant's telephone number)


              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by X whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                                 Yes [X] No [ ]

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

<TABLE>
<S>                                         <C>
      Common Stock, no par value                   11,065,236 shares
      --------------------------            -------------------------------
              (Class)                       (Outstanding at April 11, 2001)
</TABLE>


<PAGE>   2
                                  ODWALLA, INC.

                                    FORM 10-Q
                  FOR THE QUARTERLY PERIOD ENDED MARCH 3, 2001


                                      INDEX


<TABLE>
<CAPTION>
                                                                                   PAGE
                                                                                   ----
<S>                                                                                <C>
PART I.  FINANCIAL INFORMATION

    Item 1.    Financial Statements

               Consolidated Balance Sheets as of September 2, 2000
               and March 3, 2001 ...............................................     3

               Consolidated Statements of Operations for the thirteen week and
               the twenty-six week periods ended February 26, 2000
               and March 3, 2001 ...............................................     4

               Consolidated Statements of Cash Flows for the twenty-six week
               periods ended February 26, 2000 and March 3, 2001 ...............     5

               Notes to Consolidated Financial Statements ......................     6

    Item 2.    Management's Discussion and Analysis of Financial Condition
               and Results of Operations .......................................     9

    Item 3.    Quantitative and Qualitative Disclosures About Market Risk ......    20

PART II.  OTHER INFORMATION

    Item 1.    Legal Proceedings ...............................................    21

    Item 4.    Submission of Matters to a Vote of Security Holders .............    21

    Item 6.    Exhibits and Reports on Form 8-K ................................    21
</TABLE>


                                       2


<PAGE>   3
PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                  ODWALLA, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                                           SEPTEMBER 2,      MARCH 3,
                                                                             2000             2001
                                                                           ------------     ----------
<S>                                                                        <C>              <C>
Current assets
    Cash and cash equivalents                                              $    3,374       $    1,224
    Short term investments                                                      2,018            1,601
    Trade accounts receivable, less allowance for doubtful
       accounts and product returns of $1,436 and $1,576                       11,599           14,143
    Inventories                                                                 6,705            6,148
    Prepaid expenses and other current assets                                   2,357            2,632
    Deferred tax asset, current                                                 2,265            3,274
                                                                           ----------       ----------

          Total current assets                                                 28,318           29,022
                                                                           ----------       ----------

Plant, property and equipment, net                                             20,011           22,234
                                                                           ----------       ----------

Other assets
    Intangible assets, net                                                     35,091           33,883
    Covenants not to compete, net                                                 393              349
    Deferred tax asset, non-current                                             4,864            4,346
    Other noncurrent assets                                                       677              925
                                                                           ----------       ----------
             Total other assets                                                41,025           39,503
                                                                           ----------       ----------

             Total assets                                                  $   89,354       $   90,759
                                                                           ==========       ==========

Current liabilities
    Accounts payable                                                       $    9,139       $    9,296
    Accrued payroll and related items                                           2,328            1,964
    Line of credit                                                              1,950            1,950
    Other accruals                                                              2,574            3,464
    Income taxes payable                                                           24                -
    Current maturities of capital lease obligations                               372              409
    Current maturities of long-term debt                                          219              221
                                                                           ----------       ----------

          Total current liabilities                                            16,606           17,304

Capital lease obligations, less current maturities                                735              846
Long-term debt, less current maturities                                           390              276
Deferred tax liability                                                         10,296            9,844
Other                                                                             655            2,667
                                                                           ----------       ----------

Total liabilities                                                              28,682           30,937
                                                                           ----------       ----------
Shareholders' equity
    Common stock, no par value, shares authorized, 15,000,000; shares
       issued and outstanding, 11,033,000 and 11,065,000                       72,948           73,132
    Accumulated deficit                                                       (12,276)         (13,310)
                                                                           ----------       ----------

Total shareholders' equity                                                     60,672           59,822
                                                                           ----------       ----------

Total liabilities and shareholders' equity                                 $   89,354       $   90,759
                                                                           ==========       ==========
</TABLE>


           See accompanying notes to consolidated financial statements


                                       3


<PAGE>   4
                                  ODWALLA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                       THIRTEEN WEEKS ENDED        TWENTY-SIX WEEKS ENDED
                                                    -------------------------     -------------------------
                                                    FEBRUARY 26,     MARCH 3,     FEBRUARY 26,     MARCH 3,
                                                        2000           2001           2000           2001
                                                    ------------     --------     ------------     --------
<S>                                                 <C>              <C>          <C>              <C>
Net sales                                             $ 18,090       $ 31,693       $ 34,859       $ 63,135

Cost of sales                                            9,585         14,961         18,541         29,818
                                                      --------       --------       --------       --------

    Gross profit                                         8,505         16,732         16,318         33,317
                                                      --------       --------       --------       --------

Operating expenses
    Sales and distribution                               6,271         11,652         12,498         22,681
    Marketing                                              590            862          1,133          1,977
    General and administrative                           1,918          2,973          3,802          5,790
    Amortization of intangible assets from Fresh
        Samantha acquisition                                 -            577              -          1,154
    Restructuring and other charges                          -          3,490              -          3,490
                                                      --------       --------       --------       --------

          Total operating expenses                       8,779         19,554         17,433         35,092
                                                      --------       --------       --------       --------

Loss from operations                                      (274)        (2,822)        (1,115)        (1,775)

Other (expense) income, net                                (39)          (107)           (51)          (178)
                                                      --------       --------       --------       --------

Loss before income taxes                                  (313)        (2,929)        (1,166)        (1,953)

Income tax benefit                                          47          1,377            175            919
                                                      --------       --------       --------       --------

Net loss                                                  (266)        (1,552)          (991)        (1,034)
                                                      --------       --------       --------       --------

Preferred stock dividend                                  (213)             -           (426)             -
                                                      --------       --------       --------       --------

Net loss applicable to common
    shareholders                                      $   (479)      $ (1,552)      $ (1,417)      $ (1,034)
                                                      ========       ========       ========       ========

Basic net loss applicable to common
    shareholders per share                            $  (0.09)      $  (0.14)      $  (0.28)      $  (0.09)
                                                      ========       ========       ========       ========

Shares used in per share amounts                         5,126         11,048          5,126         11,042
                                                      ========       ========       ========       ========

Diluted net loss applicable to common
    shareholders per share                            $  (0.09)      $  (0.14)      $  (0.28)      $  (0.09)
                                                      ========       ========       ========       ========

Shares used in per share amounts                         5,126         11,048          5,126         11,042
                                                      ========       ========       ========       ========
</TABLE>


           See accompanying notes to consolidated financial statements


                                       4


<PAGE>   5
                                  ODWALLA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                     TWENTY-SIX WEEKS ENDED
                                                                   ---------------------------
                                                                   FEBRUARY 26,      MARCH 3,
                                                                     2000             2001
                                                                   ------------     ----------
<S>                                                                <C>              <C>
Cash flows from operating activities
   Net loss                                                        $     (991)      $   (1,034)
   Adjustments to reconcile net loss to net cash (used in)
     provided by operating activities:
        Depreciation                                                    1,241            2,461
        Amortization                                                       54            1,266
        Deferred taxes                                                   (182)            (943)
        Changes in assets and liabilities:
          Trade accounts receivable                                      (562)          (2,544)
          Inventories                                                    (439)             557
          Prepaid expenses and other current assets                        11             (275)
          Other noncurrent assets                                        (268)            (262)
          Accounts payable                                               (794)             157
          Accrued payroll and related items                              (124)            (364)
          Other accruals                                                 (285)             890
          Income taxes payable                                              -              (24)
          Other long-term liabilities                                       -            2,012
                                                                   ----------       ----------
Net cash (used in) provided by operating activities                    (2,339)           1,897
                                                                   ==========       ==========

Cash flows from investing activities
   Capital expenditures                                                (2,799)          (4,298)
   Proceeds from sale of short-term investments                         3,525              417
                                                                   ----------       ----------
Net cash provided by (used in) investing activities                       726           (3,881)
                                                                   ----------       ----------

Cash flows from financing activities
   Principal payments under long-term debt and capital leases             (97)            (350)

   Net payments under line of credit                                     (369)               -
   Issuance of common stock                                                 1              184
                                                                   ----------       ----------
Net cash used in financing activities                                    (465)            (166)
                                                                   ----------       ----------

Net decrease in cash and cash equivalents                              (2,078)          (2,150)

Cash and cash equivalents, beginning of period                          2,581            3,374
                                                                   ----------       ----------

Cash and cash equivalents, end of period                           $      503       $    1,224
                                                                   ==========       ==========
</TABLE>


           See accompanying notes to consolidated financial statements


                                       5


<PAGE>   6
                                  ODWALLA, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      SUMMARY OF ACCOUNTING POLICIES AND BASIS OF PRESENTATION

        Basis of Presentation. The accompanying consolidated balance sheet of
Odwalla, Inc. and its subsidiaries ("Odwalla" or "Company") at March 3, 2001 and
the related consolidated statements of operations and of cash flows for the
thirteen week and twenty-six week periods ended for each of February 26, 2000
and March 3, 2001 have not been audited by independent accountants. However, in
management's opinion, they include all adjustments (which include only normal
recurring adjustments) necessary for a fair presentation of the financial
position and the results of operations for the periods presented. The statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote disclosure
normally included in financial statements prepared in conformity with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. The operating results for the interim periods are not
necessarily indicative of results to be expected for an entire year. The
aforementioned statements should be read in conjunction with the consolidated
financial statements for the year ended September 2, 2000 appearing in Odwalla's
2000 Annual Report on Form 10-K.

        The Statement of Operations includes the results of Fresh Samantha, a
wholly owned subsidiary, since its acquisition on May 2, 2000.

2.      CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

        We consider all investments with an initial maturity of three months or
less at the date of purchase to be cash equivalents. Both cash equivalents and
short term investments are considered available-for-sale securities and are
reported at amortized cost, which approximates fair value.

3.      INVENTORIES

        Inventories consist of the following (in thousands):


<TABLE>
<CAPTION>
                                  SEPTEMBER 2,       MARCH 3,
                                      2000             2001
                                  -----------      -----------
<S>                               <C>              <C>
Raw materials                     $     4,276      $     3,577
Packaging supplies and other              944              781
Finished product                        1,485            1,790
                                  -----------      -----------
                                  $     6,705      $     6,148
                                  ===========      ===========
</TABLE>


4.      PLANT, PROPERTY AND EQUIPMENT

        Plant, property and equipment consist of the following (in thousands):


<TABLE>
<CAPTION>
                                                          SEPTEMBER 2,       MARCH 3,
                                                             2000              2001
                                                          -----------       -----------
<S>                                                       <C>               <C>
Land                                                      $       618       $       618
Buildings and building improvements                             7,244             7,734
Leasehold improvements                                          2,314             2,305
Machinery and equipment                                        14,018            17,012
Vehicles                                                          997             1,106
Data processing equipment                                       4,019             5,466
Other                                                           1,619             1,272
                                                          -----------       -----------
                                                               30,829            35,513
Less accumulated depreciation and amortization                (10,818)          (13,279)
                                                          -----------       -----------
                                                          $    20,011       $    22,234
                                                          ===========       ===========
</TABLE>


                                       6


<PAGE>   7
                                  ODWALLA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.      EARNINGS PER COMMON SHARE

        Basic earnings per share is computed using the weighted average number
of common shares outstanding during the period. Diluted earnings per share is
computed using the weighted average number of common and dilutive common
equivalent shares outstanding during the period. Common equivalent shares
consist of the shares issuable upon the exercise of stock options and warrants
under the treasury stock method.

        The following table shows the computation of basic and diluted earnings
per share, in thousands except per share data:


<TABLE>
<CAPTION>
                                                   THIRTEEN WEEKS ENDED            TWENTY-SIX WEEKS ENDED
                                                  -------------------------       -------------------------
                                                   FEB. 26,        MAR. 3,         FEB. 26,        MAR. 3,
                                                    2000            2001            2000             2001
                                                  ---------       ---------       ---------       ---------
<S>                                               <C>             <C>             <C>             <C>
Basic:
  Weighted average common shares outstanding          5,126          11,048           5,126          11,042
  Net loss                                        $    (266)      $  (1,552)      $    (991)      $  (1,034)
  Net loss attributable to common
   shareholders                                   $    (479)      $  (1,552)      $  (1,417)      $  (1,034)
  Per share amount, attributable to common
    shareholders                                  $   (0.09)      $   (0.14)      $   (0.28)      $   (0.09)

Diluted:
  Weighted average common shares outstanding          5,126          11,048           5,126          11,042
  Common equivalent shares
  Shares used in per share amounts                    5,126          11,048           5,126          11,042
  Net loss                                        $    (266)      $  (1,552)      $    (991)      $  (1,034)
  Net loss attributable to common
  shareholders                                    $    (479)      $  (1,552)      $  (1,417)      $  (1,034)
  Per share amount, attributable to common
    shareholders                                  $   (0.09)      $   (0.14)      $   (0.28)      $   (0.09)
</TABLE>


        We had no dilutive common equivalent shares during the periods presented
due to the reported net loss.

        Holders of 1,033,333 shares of Series A Preferred Stock ("Series A
Stock") at February 26, 2000 were entitled to receive an 8% annual dividend
which was payable in either cash or additional Series A Stock, at our election.
The dividend was payable semi-annually. For the thirteen week and the twenty-six
week periods ended February 26, 2000, we adjusted net income by $213,000 and
$426,000 to arrive at net income attributable to common shareholders. In
connection with the purchase of Fresh Samantha in May 2000, the Series A Stock
was converted into common stock as of the effective date of the Fresh Samantha
acquisition.

6.      LINE OF CREDIT

        As of March 3, 2001, we had exceeded the capital asset acquisition
limitation and debt service coverage covenants included in the Credit Agreement.
We requested our lender to waive the specific March 3, 2001 covenant violations
and, in April 2001, the lender granted the requested waiver.


                                       7


<PAGE>   8
                                  ODWALLA, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.      RESTRUCTURING AND OTHER CHARGES

        Restructuring and other charges consist of the following items (in
thousands):


<TABLE>
<S>                                                <C>
Separation agreement and severance agreements      $1,230
Exit from Saco, Maine production facilities         2,260
                                                   ------
                                                   $3,490
                                                   ------
</TABLE>


        Separation agreement and severance agreements. On December 14, 2000,
Odwalla announced that Doug Levin, Founder and CEO of Fresh Samantha, was
leaving the company after helping to complete the successful merger of Odwalla
and Fresh Samantha. In December 2000 and January 2001, management changes were
implemented in our East Coast operations. As a result of these actions, we
recorded a $1,230,000 charge to operations.

        Exit from Saco, Maine production facilities. On January 11, 2001,
Odwalla announced the closure of the Fresh Samantha production facilities and
the construction of a new production facility in Florida. The main components of
the cost of this closure are as follows:

        -       The closure includes the termination of approximately 60
                employees, primarily from the manufacturing operation, and
                estimated severance payments and related payments of $752,000.
                All employees were notified of their pending termination in
                January 2001.

        -       The exit from the Saco facility results in excess leased
                facilities, excess transportation equipment, and certain other
                assets that will have no recoverable value due to the closure.
                These items total $1,508,000.

        As of March 3, 2001, the liability for the above charges, net of
expenses applicable to the quarter ended March 3, 2001, are included in the
following accounts (in thousands):


<TABLE>
<S>                                                      <C>
Other accruals                                           $ 1,426
Other long-term liabilities                                2,031
</TABLE>


8.      OTHER (EXPENSE) INCOME, NET

        Other (expense) income consisted of the following (in thousands):


<TABLE>
<CAPTION>
                           THIRTEEN WEEKS ENDED              TWENTY-SIX WEEKS ENDED
                      -----------------------------       -----------------------------
                      FEBRUARY 26,       MARCH 3,         FEBRUARY 26,       MARCH 3,
                         2000              2001              2000              2001
                      -----------       -----------       -----------       -----------
<S>                   <C>               <C>               <C>               <C>
Interest income       $        36       $        57       $       104       $       170
Interest expense              (53)             (156)             (125)             (299)
Other                         (22)               (8)              (30)              (49)
                      -----------       -----------       -----------       -----------

                      $       (39)      $      (107)      $       (51)      $      (178)
                      ===========       ===========       ===========       ===========
</TABLE>


                                       8


<PAGE>   9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

CAUTION ABOUT FORWARD-LOOKING STATEMENTS

        This Quarterly Report on Form 10-Q includes forward-looking statements
about future financial results, future business changes and other events that
haven't yet occurred. For example, statements like "we expect," "we want," "we
anticipate" or "we believe" are forward-looking statements. Investors should be
aware that actual results may differ materially from our expressed expectations.
We will not necessarily update the information in this Form 10-Q if any
forward-looking statement later turns out to be inaccurate. Details about risks
that could affect various aspects of our business are included throughout this
Form 10-Q, including in this Item 2 - Other factors affecting Odwalla's
business. Investors should read all of these risks carefully. Investors should
pay particular attention to risks affecting the following areas: availability
and pricing of raw materials (page 15); competition (page 19); our dependence on
significant trade partners (page 16); government regulations that may impact our
business (page 16); the specific risk factors discussed on pages 14 to 20; legal
proceedings (page 21). Investors should also refer to Odwalla's Annual Report on
Form 10-K for the year ended September 2, 2000 and our financial statements and
related notes included in that Annual Report on Form 10-K and other documents
that we file from time to time with the Securities and Exchange Commission in
conjunction with the following discussion and analysis.

OVERVIEW

        Odwalla's business is to provide easy access to great tasting
nourishment. We are the nation's leading branded super-premium beverage company,
delivering nourishment coast to coast with the Odwalla and Samantha lines of
more than 45 all natural juices, smoothies, dairy-free original and chocolate
milk, dairy-free shakes, spring water and natural food bars. Our beverage
product lines appeal to many consumers because of the superior taste and greater
nutritional value of minimally processed beverages compared to juice from
concentrate or with artificial flavors or to more highly processed non-dairy
products. When we refer to "Odwalla," we mean Odwalla, Inc. and our wholly owned
subsidiary, Fresh Samantha, Inc. When we refer to "Samantha," we mean the
branded products of Fresh Samantha, Inc.

        We want to be the leading nourishment company in our existing and future
markets. We seek to achieve this objective by leading the industry in beverage
and other food knowledge, optimizing quality through sourcing and production,
controlling product access and distribution from production through retail,
artful presentation, growing through geographic and product line expansion,
leveraging our information systems, interacting with consumers and living our
vision.

        Odwalla's sourcing procedures and production methods enable us to create
products with high nutritional value and flavor quality. The distribution of our
products through both our own and other direct-store-delivery systems allows us
to control product quality and presentation, as well as to develop relationships
with trade partners. We sell and distribute our products to thousands of retail
locations, including supermarkets, specialty retailers, natural food stores,
warehouse outlets, convenience stores, on-line grocers and food service
operators through our direct-store-delivery system.

        Odwalla is committed to certain values -- nourishing consumers,
shareholders and other stakeholder groups; environmental awareness; and support
for the communities we serve. We believe that our products reflect these values.

        Odwalla products are currently sold in over thirty states. Our
nourishing food bars are available in additional states and can also be
purchased through our Web site at www.odwalla.com.


                                       9


<PAGE>   10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


        We completed our acquisition of Fresh Samantha on May 2, 2000, and the
financial information presented herein includes the operations of Fresh Samantha
since the acquisition date.

RESULTS OF OPERATIONS

        The following table presents, as a percentage of net sales, certain
statements of operations data for the thirteen week and twenty-six week periods
ended for each of February 26, 2000 and March 3, 2001. These operating results
are not necessarily indicative of the results for any future period.


<TABLE>
<CAPTION>
                                                   THIRTEEN WEEKS ENDED                 TWENTY-SIX WEEKS ENDED
                                              ------------------------------        ------------------------------
                                              FEBRUARY 26,         MARCH 3,         FEBRUARY 26,          MARCH 3,
                                                  2000               2001               2000               2001
                                              -----------        -----------        -----------        -----------
<S>                                           <C>                <C>                <C>                <C>
Net sales                                           100.0%             100.0%             100.0%             100.0%
Cost of sales                                        53.0               47.2               53.2               47.2
                                              -----------        -----------        -----------        -----------
Gross margin                                         47.0               52.8               46.8               52.8
Operating expenses
  Sales and distribution                             34.7               36.8               35.9               35.9
  Marketing                                           3.2                2.7                3.2                3.1
  General and administrative                         10.6                9.4               10.9                9.2
  Amortization of intangible assets from
    Fresh Samantha acquisition                        0.0                1.8                0.0                1.8
  Restructuring and other charges                     0.0               11.0                0.0                5.5
                                              -----------        -----------        -----------        -----------
Loss from operations                                 (1.5)              (8.9)              (3.2)              (2.7)
Interest and other income (expense), net             (0.2)              (0.3)              (0.1)
                                                                                                              (0.3)
Income tax benefit                                    0.2                4.3                0.5                1.5
                                              -----------        -----------        -----------        -----------
Net loss                                             (1.5)%             (4.9)%             (2.8)%             (1.5)%
                                              ===========        ===========        ===========        ===========
</TABLE>


        NET SALES. Net sales for the second quarter of fiscal 2001 increased
75.2% to $31.69 million compared to $18.09 million in the second quarter of
fiscal 2000. The sales growth this quarter was 13% on a pro forma basis if we
were to include Samantha sales for the second quarter of fiscal 2000. Our sales
growth rate this quarter, excluding the impact of the Samantha sales, was about
the same for both our direct-store-delivery and our distributor business. Our
sales growth occurred throughout the country, both in our more established
markets and in newer markets. We did not enter any significant new markets this
quarter. Because we sell product to distributors at a wholesale price lower than
the price to retail trade partners, our increased use of distributors will not
produce the same net sales growth that would occur if the same number of
products were sold to retail trade partners. In addition, growth in large new
accounts serviced by distributors, which we support with initial product return
right programs, will have a negative impact on net sales, as it did in the
second quarter of fiscal 2001. With a few exceptions, the Samantha brand has not
historically been sold through distributors. We expect to supplement the East
Coast direct-store-delivery system with distributors during fiscal 2001, which
may impact net sales growth percentages. Our food bar sales continue as an
important component of our nourishment product lines, although food bar sales
were less than 5% of total sales in both quarters.

        Net sales for the first half of fiscal 2001 increased 81.1% to $63.14
million compared to $34.86 million for the same period last year. This increase
was mainly due to the acquisition of Fresh Samantha. Sales growth for the first
half of the year was about equal for our direct-store-delivery and our
distributor business and was strongest in our new markets and most established
markets. Food bar sales increased about 52% during the first half of fiscal 2001
compared to the same period in the prior year due to increased geographic
distribution and sales promotions. Food bar sales represented less than 5% of
net sales for the twenty-six week period.


                                       10


<PAGE>   11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:

        COST OF SALES. Cost of sales increased to $15.0 million in the second
quarter of fiscal 2001 compared to $9.6 million for the same period during
fiscal 2000. This increase was mainly due to the acquisition of Fresh Samantha.
Gross margin as a percentage of net sales was 52.8% in the second quarter of
fiscal 2001, an increase from 47.0% in the second quarter of fiscal 2000. For
the Odwalla brand, gross margin has improved due to better production
efficiencies from our investment in equipment and production personnel during
the past few years. These investments have improved our product yields on both
processing and packaging. In addition, we are experiencing the benefits of
better purchasing decisions for the Odwalla brand and the Samantha brand. In the
first quarter of fiscal 2001, we began processing internally some products that
had been produced at a higher cost by a co-packer in prior quarters. We also
experienced slightly lower product return rates in the second quarter of fiscal
2001 compared to the same period in fiscal 2000.

        Since the Fresh Samantha acquisition, we have had two production
facilities. The impact on cost of sales of the Fresh Samantha facility in Saco,
Maine had a slight negative impact for the quarter. This was primarily due to
the reliance on more expensive Florida fruit and the co-packing costs incurred
for some Samantha products. The continued use of third party distributors also
negatively affected gross margins.

        In late December 1998, the San Joaquin Valley in central California
experienced a citrus freeze that seriously damaged the navel orange crop. The
freeze also impacted the California Valencia orange crop and other citrus, which
extended the impact throughout calendar year 1999 and into early calendar 2000.
The immediate effect of the freeze was to increase the price of the fresh citrus
we purchased. We also experienced poorer citrus yields and some delay in fruit
maturity. The freeze also caused us to be more reliant on citrus sources farther
from our production facility than in prior years, which caused an increase in
freight cost. During the first twenty-six weeks of fiscal 2001, we experienced a
return to more favorable pricing and yield for ingredients, primarily citrus,
for the Odwalla brand.

        In January 2001, we announced that we plan to cease production at the
facility in Saco, Maine in June 2001 and that we will construct a new production
facility in southern Florida to handle our east coast production requirements
beginning in late calendar 2001. See "Restructuring and other charges" below for
additional information.

        Cost of sales for the first half of fiscal 2001 were $29.8 million
compared to $18.5 million in the same period last year. Gross margin as a
percentage of net sales was 52.8% for the first half of this year compared to
46.8% in the prior year. Gross margin increased primarily due to (a) the better
efficiencies in yields from the new bottling line and other investments in the
Dinuba production facility, (b) better purchasing practices for key materials
for both brands, (c) the citrus freeze discussed above which impacted the fiscal
2000 margin negatively, and (d) the additional costs due to the issues involved
with our new bottle introduction, as discussed below, as we worked through the
production challenges of the new bottling line.

        In the first quarter of fiscal 2000, we introduced new branded,
custom-designed 450 milliliter and 325 milliliter bottles made from recyclable,
HDPE plastic. At the same time, we began using a new bottling line designed to
accommodate our new bottles. During the first quarter of fiscal 2000, we
experienced problems in producing beverage products to meet sales orders during
the initial introduction period. We also experienced unexpected issues that
caused some products to ferment and, ultimately, caused some bottles to bloat.
These issues disrupted a consistent flow of product during a portion of the
first half of fiscal 2000 and contributed to higher costs.

        SALES AND DISTRIBUTION. Sales and distribution expenses increased to
$11.7 million in the second quarter of fiscal 2001 compared to $6.3 million in
the second quarter of fiscal 2000, and increased to 36.8% of net sales compared
to 34.7% in the second quarter last year. The increase in absolute dollars is
due to the Fresh Samantha acquisition in May 2000, increased costs of utilizing
a direct-store-delivery system in some of our newer markets, some of which were
previously serviced with first party distributors, and increased national and


                                       11


<PAGE>   12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:

regional labor costs. The increase as a percentage of net sales compared to the
second quarter of last year results from restructuring of the East Coast sales
and distribution organization and investment in our national sales organization.

        Future decisions regarding growth and expansion consistent with
long-term strategic objectives may increase sales and distribution costs as a
percentage of net sales. We continue to look for efficiencies in this part of
our business. However, expansion into markets serviced by our
direct-store-delivery system will require an investment for some initial period,
and additional investments in the East Coast sales and distribution organization
may cause a short-term increase in costs as we standardize our national
operations. Expenses will also continue to be affected as we seek to find the
proper mix in a given market between our own direct-store-delivery system and
third party distributors. The perishable nature of most of our products and our
stringent service standards can make it difficult to find appropriate
distributors in some markets.

        Sales and distribution expenses for the first half of fiscal 2001 were
$22.7 million or 35.9% of net sales compared to $12.5 million or 35.9% of net
sales during the same period last year. Higher costs associated with our East
Coast sales and distribution operations and national sales organization were
offset by improved cost performance in our more established West Coast markets.

        MARKETING. Marketing expenses increased to $862,000 or 2.7 % of net
sales in the second quarter of fiscal 2001 compared to $590,000 or 3.2% of net
sales in the second quarter of fiscal 2000. Most of the increase in expenses
compared to the second quarter of last year is due to additional personnel
associated with the Fresh Samantha acquisition. For the first half of fiscal
2001, marketing expenses were $2.0 million compared to $1.1 million in the same
period last year. The increased spending was primarily due to the Samantha
acquisition.

        We expect marketing expenses to trend higher in absolute dollars for the
balance of 2001 as we continue to integrate the Odwalla and Samantha brands and
to provide marketing support for the Odwalla Milk product introduction.

        GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased to $3.0 million in the second quarter of fiscal 2001 from $1.9 million
in the second quarter of fiscal 2000, and decreased as a percentage of net sales
to 9.4 % from 10.6% last year. The change was due primarily to a general
increase in expenses resulting from the Fresh Samantha acquisition and from
infrastructure expenses, including a new financial software package and
information systems that were operational at the beginning of fiscal 2001.

        For the first half of fiscal 2001, general and administrative expenses
were $5.8 million or 9.2% of net sales compared to $3.8 million or 10.9% of net
sales in the first half of fiscal 2000. Most of the increase in absolute dollars
was personnel related costs resulting from the Fresh Samantha acquisition and
the infrastructure expenses noted above.

        We expect general and administrative costs to increase in absolute
dollars for the balance of fiscal 2001, but not necessarily to increase as a
percentage of net sales. We will also continue to invest in infrastructure for
the duration of fiscal 2001 to allow for sustainable growth.

        INTEREST AND OTHER EXPENSE. Odwalla had net interest and other expense
of $107,000 in the second quarter of fiscal 2001 compared to $39,000 in the
second quarter last year. The net interest expense resulted primarily from
borrowings under the line of credit and other existing debt for each quarter,
including the debt acquired with the Fresh Samantha acquisition.

        For the first half of fiscal 2001, we had net interest and other expense
of $178,000 compared to $51,000 in the prior year. The increase resulted from
the debt acquired with the Fresh Samantha acquisition and new capital lease
obligations.


                                       12


<PAGE>   13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


        INCOME TAX BENEFIT. The $1.4 million and $919,000 income tax benefit for
the second quarter and the first twenty-six weeks of 2001 represents a 47%
effective tax rate. The Fresh Samantha acquisition was structured as a tax-free
reorganization for income tax purposes. This resulted in intangible and other
assets with a basis for accounting purposes, as the acquisition was recorded
using purchase accounting, that does not exist for tax reporting purposes.
Because the financial accounting basis will result in future accounting
amortization in excess of tax amortization, a deferred tax liability was
established to account for the temporary portion of the difference. In
accordance with SFAS 109, there remains a permanent difference between the
financial accounting basis and the tax reporting basis of certain acquired
assets. This and other permanent differences will continue to impact the
effective tax applied for financial reporting purposes under SFAS 109. We will
evaluate the effective tax rate as we proceed through fiscal 2001, but we
currently expect that our effective tax rate will be 47% for the remainder of
fiscal 2001.

        RESTRUCTURING AND OTHER CHARGES. On December 14, 2000, Odwalla announced
that Doug Levin, Founder and CEO of Fresh Samantha, was leaving the company
after helping to complete the successful merger of Odwalla and Fresh Samantha.
In December 2000 and January 2001, management changes were implemented in our
East Coast operations. As a result of these actions, we recorded a $1,230,000
charge to operations.

        On January 11, 2001, Odwalla announced the closure of the Fresh Samantha
production facilities and the construction of a new production facility in
Florida. The main components of the cost of this closure are as follows:

        -       The closure includes the termination of approximately 60
                employees, primarily from the manufacturing operation, and
                estimated severance payments and related payments of $752,000.
                All employees were notified of their pending termination in
                January 2001.

        -       The exit from the Saco facility results in excess leased
                facilities, excess transportation equipment, and certain other
                assets that will have no recoverable value due to the closure.
                These items total $1,508,000.


LIQUIDITY AND CAPITAL RESOURCES

        At March 3, 2001, we had working capital of $11.7 million, the same
working capital balance as at September 2, 2000. At March 3, 2001, we had cash
and cash equivalents and short-term investments of $2.8 million, compared to
$5.4 million at September 2, 2000. The decrease resulted primarily from cash
provided by operating activities offset by cash used for capital asset
purchases.

        Net cash provided by operating activities in the first twenty-six weeks
of fiscal 2001 was $1.9 million. This consisted of the net loss plus
depreciation, amortization, inventories, accounts payable, other accrued
liabilities, and other non-current liabilities, offset by increases in accounts
receivable, prepaid expenses, and other noncurrent assets. Increases in accounts
receivable are generally due to increased sales volume. The inventory decrease
results primarily from a reduction in raw materials and packaging supplies,
partially offset by higher finished goods inventory driven by increased sales
volume. Accrued expenses, both current and long-term, are higher due to the
restructuring and other charges previously discussed.

        Net cash used in investing activities in the first twenty-six weeks of
fiscal 2001 was $3.9 million. The decrease consisted primarily of capital
expenditures for production equipment at the Dinuba plant, data processing and
computer hardware and software as we continue our infrastructure investment, and
display coolers. This was partially offset by the sale of short-term
investments.


                                       13


<PAGE>   14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


        Net cash used by financing activities in the first twenty-six weeks of
fiscal 2001 was $166,000. This consisted of principal payments under long term
debt and capital leases partially offset by the issuance of common stock.

        We've used, and expect to continue to use, both operating and capital
lease financing to obtain refrigeration coolers used in selling our products,
computer and communication equipment, and production assets, primarily
equipment. If we don't obtain adequate lease or other financing, our inability
to obtain needed equipment may negatively impact our operations. For the first
twenty-six weeks of fiscal 2001, we utilized significant cash to purchase
equipment that we were unsuccessful in leasing at acceptable terms. At March 3,
2001, we owed $1,255,000 for capital lease obligations, primarily related to
leasing of production equipment, computer equipment and vehicles. In fiscal
2000, borrowings under our line of credit were at lower levels than in the prior
year and we recognized interest income from the invested proceeds of the
February 1999 Series A Stock offering.

        Our current Credit Agreement provides borrowing under a revolving credit
facility up to $10.0 million. We are also required to meet certain covenants,
including maintenance of certain financial, leverage, and debt service coverage
ratios, and certain tangible net worth. The first $2.0 million of borrowings do
not require separate borrowing base reporting. Borrowings over $2.0 million and
up to $5.0 million are limited to 80% of eligible accounts receivable. The
Credit Agreement defines eligible accounts receivable which generally represents
all trade accounts receivable less delinquent balances. The Credit Agreement
also contains certain business restrictions, including the ability to borrow
additional funds, limitations on capital expenditures in excess of certain
amounts, restrictions on the payment of cash dividends, sale or purchase of
Company stock, ability to encumber or sell Company assets, and limitations on
other business transactions without prior approval from the lender. Interest is
payable monthly at either the prime interest rate plus 1% or the Eurodollar rate
plus 3.5%. The Credit Agreement has a three-year term ending in April 2003. As
of March 3, 2001, we had exceeded the capital asset acquisition covenant, which
limits our ability to acquire capital assets, included in the Credit Agreement.
Additionally, the impact of the charges associated with the closure of the Saco,
Maine facility and the restructuring of East Coast operations resulted in a
violation of the debt service coverage ratio primarily due to the loss reported
for the quarter. We requested our lender to waive the specific March 3, 2001
covenant violations and, in April 2001, the lender granted the requested waiver.

        The increased costs associated with integrating Samantha, our plans to
invest in new products and certain new market areas, and general corporate needs
may cause us to seek additional financing that may be dilutive to current
investors or result in a higher debt-to-equity ratio than would otherwise be the
case. Any financing we obtain may not be on terms favorable to us, even if it is
available.

        Based upon information currently available, we believe that our existing
cash and cash equivalents and our current and anticipated borrowing capability
will be adequate to meet our obligations as they become due in the next twelve
months.


OTHER FACTORS AFFECTING ODWALLA'S BUSINESS

        PRODUCTS, DISTRIBUTION AND TRADE PARTNERS. Our current product line
consists of single-flavor and blended fruit- and vegetable-based juice products,
dairy-free original and chocolate milk, all-natural meal replacement and
dairy-free shakes, nourishing food bars, natural spring water and frozen fruit
bars. All of our juices are currently flash pasteurized and some are produced on
a seasonal basis. Our policy is to have all products removed from trade
partners' shelves on or before their Odwalla-established expiration date. In
addition, because of our "day of production" quality standards, products reflect
the seasonal changes in fruit varieties in color and taste. Our production
methods are designed to minimize the effect of processing on the fruit juice
extracted. Our entire product line varies due to a significant component of
seasonal ingredients, seasonal product usage, and the addition and deletion of
products.


                                       14


<PAGE>   15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


        We've trademarked various aspects of our brands, including labels,
certain product names, certain phrases and symbols, as we believe that these and
other intellectual property that we own are critical to our success. These items
help create the Odwalla and Samantha brands and connect in an important way with
our consumers. We have taken steps to protect our intellectual property and we
intend to continue to protect against imitation of our products and packages and
to protect our trademarks and copyrights as necessary. This action could be
time-consuming, result in costly litigation and divert management personnel.
Furthermore, there can be no assurance that we would be successful in such
action.

        Our products are sold and distributed primarily through our
direct-store-delivery system, which is serviced by route sales representatives
who sell, deliver and merchandise products to our trade partners. This
direct-store-delivery system is designed to allow us to preserve the integrity
of our highly perishable all-natural products, optimally manage delivery
schedules, efficiently control product mix, keep store shelves or our own
coolers stocked with freshly prepared products and have a greater influence on
determining in-store location and merchandising of our products. At most
direct-store-delivery accounts, we stock, order and merchandise our products at
the point of sale, and we issue credits to the trade partner for unsold product.
This full service relationship allows us to avoid paying slotting fees for shelf
space, as well as other handling fees, and to maintain control over our product
merchandising at the point of sale. We provide a lesser degree of service to
certain trade partners who are responsible for stocking, ordering and
merchandising Odwalla products. These trade partners don't receive credit for
unsold products. Consumers can purchase our products at supermarkets, specialty
retail stores, natural food stores, convenience stores, warehouse outlets,
on-line grocers and institutional food service trade partners. We also
distribute our products through third party distributors. This distribution
channel, with merchandising support provided by the distributors' employees
and/or our employees, provides opportunities to expand product distribution in
selected markets, some of which may be geographically difficult for us to
service, and still maintain relationships with trade partners. We sell directly
to the third party distributors and they generally don't receive credit for
unsold product.

        RAW MATERIALS. Producing and selling our minimally processed products
entails special requirements in ingredient sourcing, production, distribution
and sales in order to preserve and maximize the flavor profile and nutritional
integrity of the products. We source and select fruits and vegetables to meet a
variety of established criteria, including overall quality, flavor profile,
variety, ripeness and other factors. Processing of the fruit and vegetables is
performed in a manner that captures and preserves the various qualities of fresh
and consistent flavors. Odwalla has focused on each of these elements in an
effort to achieve our goal of providing the safest, best tasting and most
nutritious beverage and other products for consumers.

        Odwalla buys ingredients according to stringent specifications. Fruits
and vegetables, in particular, are purchased year-round or seasonally depending
on the type of produce. Because various types of fruit and vegetable crops are
harvested at different times of the year, we obtain and produce different juices
on a seasonal basis. Most of our fruits and vegetables are purchased in the open
market on a negotiated basis. Historically, oranges, apples, carrots and
tangerines are the largest volume commodities we purchase. We have developed an
extensive network of ingredient sourcing relationships over the years and rely
on this network as well as new sources for the ingredients we need. On the East
Coast, we currently utilize a Florida co-packing arrangement for
flash-pasteurized single-strength citrus products for the Samantha brand. We
also purchase organic oats as a significant ingredient in our food bars. All of
these key ingredients are subject to volatility in supply, price and quality
that could seriously harm our business and results of operations. We are subject
to the same risks with our other ingredients as well. We also source a number of
fruits, including tropical fruits, from foreign suppliers in the form of frozen
fruit puree. Most purees are purchased under annual price contracts. The purees
we purchase are heat treated to increase safety and meet government regulations.
Some of our products, including our water and nourishing food bars, are produced
to our specifications and recipes by independent companies.

        As with most agricultural products, the supply and price of raw
materials we use can be affected by a number of factors beyond our control,
including frost, drought, flood, hurricane and other natural disasters. Weather
conditions, economic factors affecting growing decisions, various plant diseases
and pests will affect


                                       15


<PAGE>   16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


the condition and size of the crop. For example, in December 1998, a freeze
damaged citrus crops in the San Joaquin Valley and other portions of California.
This had a significant negative impact on the cost and yield of fresh citrus
products we used until the impact of the freeze ended in the beginning of the
third quarter of fiscal 2000. Adverse weather conditions could negatively affect
our business and results of operations.

        Odwalla is pursuing a no genetically engineered organisms status on our
entire product line. However, ingredients that are not generically modified are
at times difficult to source in the required volumes. Genetically modified
organisms are the product of splicing or modifying crops to release new
organisms to the environment. Crops are genetically modified in order to
increase crop yields, to withstand high doses of herbicides or to produce their
own insecticides. There are uncertainties about the potential risks genetically
modified foods pose to humans and the environment. We intend to provide our
consumers information about any genetically modified organisms used in our
products.

        DEPENDENCE ON ONE OR A FEW MAJOR TRADE PARTNERS. Safeway, Inc. is our
largest single account and accounted for 11% of our fiscal 2000 sales. We spend
considerable time to maintain a good relationship with Safeway and other
significant accounts, but we can't offer any assurance that sales to significant
accounts will not decrease or that these trade partners will not choose to
replace our products with those of competitors. The loss of Safeway or other
significant accounts or any significant decrease in the volume of products
purchased by their customers in the future would seriously harm our business and
results of operations. Continuity of trade partner relationships is important,
and events that impact our trade partners, including labor disputes, may have an
adverse impact on our results of operations.

        GOVERNMENT REGULATION. The production and sales of beverages are subject
to the rules and regulations of various federal, state and local food and health
agencies, including the U.S. Food and Drug Administration and the California
State Food and Drug, Department of Health Services. In 1998, the FDA regulations
for fresh apple juice went into effect. The final regulations for fruit and
vegetable juices were enacted in January 2001. The FDA's ruling for citrus was
to require all fresh juice processors to show a 5-log reduction in potential
pathogenic bacterial loads, which represents a 100,000 fold reduction in the
numbers of the most resistant pathogens. The regulation also requires a Hazard
Analysis Critical Control Point plan, or HACCP. All Odwalla and Samantha
products produced in our Dinuba, California and Saco, Maine production
facilities are manufactured under a HACCP plan with validated critical control
points. This includes pasteurization of the products. By meeting the
pasteurization and HACCP requirements, Odwalla and Samantha products meet the
FDA Regulations.

        We are also subject to various federal, state and local environmental
laws and regulations that limit the discharge, storage, handling and disposal of
a variety of substances and by laws and regulations relating to workplace safety
and worker health, principally the Occupational Safety and Health Administration
Act, as well as similar state laws and regulations. We believe that we comply in
all material respects with these laws and regulations, although we cannot assure
that future compliance with such laws or regulations will not have a material
adverse effect on our results of operations or financial condition. We currently
do not incur any significant costs to comply with environmental laws.

        RISKS ASSOCIATED WITH PERISHABLE PRODUCTS. Except for natural spring
water, food bars and frozen fruit bars, Odwalla's products are flash pasteurized
and heat treated and don't contain any preservatives. As a result, our products
have a limited shelf life. In order to maintain our "day-of-production" flavor
quality standards, we further restrict the shelf life of products through early
expiration dates. The restricted shelf life means that we don't have any
significant finished goods inventory and our operating results are highly
dependent on our ability to accurately forecast near term sales in order to
adjust fresh fruit and vegetable sourcing and production. In addition, our
products are subject to issues such as the fermentation and subsequent bottle
bloating experienced in the first quarter of fiscal 2000 due to natural
organisms in ingredients. We've historically experienced difficulties in
accurately forecasting product demands and expect that challenge to continue.
When we don't accurately forecast product demand, we are either unable to meet
higher than anticipated demand or we produce excess inventory that cannot be
profitably sold. In addition,


                                       16


<PAGE>   17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


most of our trade partners have the right to return any products that are not
sold by their expiration date. Our inability to meet higher than anticipated
demand or excess production or significant amounts of product returns on any of
our products could harm our business and results of operations.

        COST SENSITIVITY. Our profitability is highly sensitive to increases in
raw materials, labor and other operating costs. Unfavorable trends or
developments related to inflation, raw material supply, labor and employee
benefit costs, including increases in hourly wage and minimum unemployment tax
rates, rent increases resulting from the rent escalation provisions in our
leases, the availability of hourly employees, and increased price or
availability of fuel or other energy costs may also adversely affect our
results. We've benefited in prior years from relatively favorable inflation
rates and part-time labor supplies in our principal market areas. However, there
is no assurance that these conditions will continue or that we will have the
ability to control costs in the future. In fiscal 1999 and in the first half of
fiscal 2000, for example, the cost for citrus products increased significantly
due to the citrus crop freeze in California. In some markets, the competition
for a skilled labor force requires us to pay salaries higher than we have
experienced historically and we expect this trend to continue for some period of
time.

        PRODUCT LIABILITY. Because our products are not irradiated or chemically
treated and are flash or gently pasteurized, they are highly perishable and
contain certain naturally occurring microorganisms. From time to time we receive
complaints from consumers regarding ill effects allegedly caused by our
products. There can be no assurance that we won't have future claims which will
not result in adverse publicity or monetary damages, either of which could
seriously harm our business and results of operations. Although we maintain
product liability insurance, our coverage may not be sufficient to cover the
cost of defense or related damages in the event of a significant product
liability claim.

        ORCHARD PRODUCTION. We depend upon the fruit produced from the trees of
large orchards. These trees may become damaged, diseased or destroyed as a
result of windstorms, pests or fungal disease. Additionally, there are types of
controllable fungal diseases that can affect fruit production although not fatal
to the trees themselves. These types of fungal diseases are generally
controllable with fungicides. However, we can't be sure that such control
measures will continue to be effective. Any decrease in the supply of fresh
fruit as a result of windstorms, pests or fungal disease could have a material
adverse effect on our business and results of operations.

        GEOGRAPHIC CONCENTRATION. Our wholesale accounts and retail trade
partners have their largest concentration in Northern California, with most
located in the metropolitan areas surrounding the San Francisco Bay. Due to this
concentration, natural disasters, including earthquakes, economic downturns and
other conditions affecting Northern California may adversely affect our business
and results of operations. With the Fresh Samantha acquisition, Odwalla's market
share in the Northeastern portion of the United States has lessened the
concentration in Northern California, although there is no assurance that this
will remain the case.

        CONCENTRATION OF PRODUCTION CAPACITY. Virtually all of our juice
production capacity is located at our Dinuba, California facility. Our facility
in Saco, Maine expands our blending and bottling capability, although that
facility does not contain citrus extraction or fruit and vegetable pressing
capability. After production ceases in the Saco facility in June 2001, we will
have one production facility remaining until our new facility in Florida is
operational in late calendar 2001. We also currently utilize a citrus co-packer
in Florida for Samantha brand single-strength citrus products. Because we
maintain minimal finished goods inventory at all production locations as part of
our "day-of-production" production system, we could be challenged to continue to
produce an adequate supply of beverages in the event that production at or
transportation from Dinuba were interrupted by fire, earthquakes, floods or
other natural disasters, work stoppages, regulatory actions or other causes. In
addition, we cannot provide assurances that our new facility in Florida will be
completed and begin operations as scheduled. Such an interruption at our Dinuba
facility or failure of our Florida facility to begin operations would seriously
harm our business and results of operations. Separate companies produce and
package our spring water, food bars and frozen bars.


                                       17


<PAGE>   18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


        LACK OF DIVERSIFICATION. Odwalla's business is vertically integrated and
centered around essentially one product, all-natural super-premium beverages,
sold primarily through our direct-store-delivery system. Although we've added
dairy-free shakes, dairy-free original and chocolate milk, meal replacement
beverages, spring water, food bars and frozen fruit bars, and are using more
third party distributors, the risks associated with focus on essentially one
product are exemplified by the material adverse effect on our business and
results of operations that resulted from the impact of the California citrus
freeze in December 1998. Any significant decrease in the consumption of
beverages generally or specifically with respect to our products would have an
adverse effect on our business and results of operations.

        RISKS RELATED TO EXPANSION. Continued growth depends in part upon our
ability to expand into new geographic areas, either through internal growth or
by acquisition. Due to the extent of our operating losses in recent years until
the third quarter of fiscal 2000 and the effort to complete the Fresh Samantha
integration, we currently anticipate limited expansion in fiscal 2001 beyond
existing markets. There can be no assurance that we will expand into new
geographic areas or continue to invest in newer markets or if such expansion or
investment is undertaken that it will be successful or that such expansion can
be accomplished on a profitable basis. Demands on management and working capital
costs resulting from the perishable nature of our products and current reliance
on the personnel-intensive direct-store-delivery system may limit the ability,
or increase the cost of, expansion into new regions. Furthermore, consumer
tastes vary by region and there can be no assurance that consumers located in
other regions will be receptive to our products.

        The Fresh Samantha acquisition has presented challenges to management,
including the integration of the operations, product lines, technologies and
personnel of Odwalla and Fresh Samantha, and special risks, including possible
unanticipated liabilities, unanticipated costs and diversion of management
attention. We cannot assure you that we will successfully integrate or
profitably manage Fresh Samantha's businesses. In addition, we cannot assure you
that the combined businesses will achieve increased sales levels, profitability,
efficiencies or synergies or that the merger will result in increased earnings
for the combined companies in any future period. The difficulties of combining
the operations of Odwalla and Fresh Samantha are exacerbated by the necessity of
coordinating geographically separated organizations. The process of integrating
operations could cause an interruption of, or loss of momentum in, the
activities of Odwalla's businesses, including the business acquired in the
merger. Additionally, the combined company may experience slower rates of growth
as compared to historical rates of growth of Odwalla and Samantha independently.
Although we believe that the merger was in the best interest of Odwalla and its
shareholders, we cannot assure you that the companies will realize the
anticipated benefits of the merger.

        At the close of the acquisition, we assumed all the liabilities of Fresh
Samantha. We believe based upon our due diligence and representations made in
the merger agreement that we have accurately assessed and can absorb these
liabilities. However, it is possible that liabilities may arise in the future
which we did not discover or anticipate. To the extent these liabilities are
inconsistent with representations and warranties made in the merger agreement,
we may have a claim for indemnification against the former shareholders of Fresh
Samantha. The merger agreement provides that 15% of Odwalla common stock issued
in the merger will be placed in an escrow account and held for a period of one
year from May 2, 2000 to cover any indemnification claim. The escrow amount is
our sole recourse for indemnification claims other than in the case of fraud.
However, Fresh Samantha's liabilities, both at the time of and arising after the
consummation of the merger, may exceed our expectations and the escrow amount
may be insufficient to cover these liabilities. If total liabilities for which
indemnification is available exceed the escrow amount or if liabilities arise
after the one-year escrow period, we may suffer financial losses, which will
harm our business, results of operation and financial condition.

        In January 2001, we announced that we were closing the Saco, Maine
production facility and relocating East Coast production to a new facility to be
constructed in southern Florida. The process of operating a facility after
notifying the employees of the relocation may require additional management time
while we simultaneously manage the construction of a new production facility. In
addition, we have not


                                       18


<PAGE>   19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


completed negotiations for an appropriate site in Florida, entered into a
construction contract, or completed financing arrangements for the new facility.
Difficulties in negotiating a site location or financing acceptable to Odwalla
may occur. This could negatively impact the timely completion of construction of
the new facility, which could result in additional costs to the company.

        Acquisitions generally involve a number of special risks, including the
diversion of management's resources, issues related to the assimilation of the
operations and personnel of the acquired businesses, potential adverse effects
on operating results and amortization of acquired intangible assets. In
addition, gross margins may be negatively impacted to the extent that gross
margins on acquired product lines are lower than Odwalla's average gross
margins. If we seek and find attractive acquisition candidates, we may not be
able to complete the transaction on acceptable terms, to successfully integrate
the acquisition into our operations, or to assure that the acquisition won't
have an adverse impact on our operations.

        Any plans to invest in new markets or to consider additional
acquisitions may cause us to seek additional financing that may be dilutive to
current investors or result in a higher debt-to-equity ratio than would
otherwise be the case. Any financing we obtain may not be on terms favorable to
us, even if it is available.

        COMPETITION. Our direct competitors in the juice business are national
brands including Horizon, Just Squeezed, Tropicana, Minute Maid, Newman's Own
and Nantucket Nectars. Our juice products compete with regional brands, many of
which are owned by North Castle Partners, a private equity fund, heavily
invested in the healthy living and aging consumer goods products including Naked
Juice, a brand which is present in the Western region, Pacific Northwest, and
most recently on the East Coast. Other regional North Castle brands include
Saratoga Beverage, in several different regions of the United States, Zeigler,
predominantly in the Midwest and Southeast regions, Fantasia in Chicago and the
Midwest, and Ferraro's in California and the Northeast. Other privately owned
regional brands of premium juice also serve as competition to Odwalla, including
Rocket Juice in the West and the Midwest. `Smoothie Bars' such as Jamba Juice
are also considered as direct competitors. In addition, a number of major
supermarkets and other retail outlets squeeze and market their own brand of
fresh juices that compete with the our products. A decision by North Castle or
any other large company to focus on Odwalla's existing markets or target markets
could have a material adverse effect on our business and results of operations.
Our food bar products, which have been on the market since August 1998, compete
with several more established companies, including PowerBar (owned by Nestle),
Balance Bar (owned by Kraft Foods, a division of Phillip Morris) and Clif Bar.
In March 2001, we introduced dairy-free original and chocolate OdwallaMilk(TM),
a blend of organic soy, rice and oat milks. This product will compete with
several more established brands and companies, including Silk. Significant
competitive pressure from these or other companies could negatively impact our
sales and results of operations. While we believe that we compete favorably with
our competitors on factors including quality, nutritional integrity, food
safety, merchandising, service, sales and distribution, multiple flavor
categories, brand name recognition and loyalty, our products are typically sold
at prices higher than most other competing beverage and bar products.

        QUARTERLY FLUCTUATIONS. Because the fruits and vegetables we use are
purchased in the open market on a negotiated basis, the price and availability
of key ingredients may fluctuate on a quarterly basis. Consumers tend to
establish certain buying patterns, and a disruption of those buying patterns may
result in a decline in sales. Other factors, including expansion into new
markets, consummating an acquisition, costs of integrating acquired operations,
price promotions of certain products, changes by our competitors, and
introduction of new products, can result in fluctuations to sales and costs on a
quarterly basis.

        INTELLECTUAL PROPERTY RIGHTS. We believe our trademarks, trade dress,
trade secrets and similar intellectual property are critical to Odwalla's
success and we attempt to protect such property with registered and common law
trademarks and copyrights, restrictions on disclosure and other actions to
prevent infringement. We've licensed elements of our distinctive trademarks,
trade dress and similar proprietary rights to third parties in the past and may
continue this practice. While we attempt to ensure that the quality of our


                                       19


<PAGE>   20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS, continued:


brand is maintained by these third party licenses, we can't be sure that these
third parties will not take actions that might seriously harm the value of our
proprietary rights or the reputation of our products, either of which could have
a material adverse effect on our business. Product package and merchandising
design and artwork are important to the success of Odwalla, and we intend to
take action to protect against imitation of our products and packages and to
protect our trademarks and copyrights as necessary. This action could be
time-consuming, result in costly litigation and divert management personnel.
Furthermore, there can be no assurance that we would be successful in such
action. We don't currently have any patents.

        VOLATILITY OF STOCK PRICE. Odwalla's common stock price has, at certain
times, experienced significant price volatility. Announcements of developments
related to our business, fluctuations in operating results, failure to meet
securities analysts' expectations, general conditions in the fruit and vegetable
industries and the worldwide economy, announcements of innovations, new products
or product enhancements by us or our competitors, fluctuations in the level of
cooperative development funding, acquisitions, changes in governmental
regulations, developments in patents or other intellectual property rights and
changes in our relationships with trade partners and suppliers could cause the
price of our common stock to fluctuate substantially. In addition, in recent
years the stock market in general, and the market for small capitalization
stocks in particular, has experienced extreme price fluctuations which have
often been unrelated to the operating performance of affected companies. Such
fluctuations could adversely affect the market price of our common stock.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        INTEREST RATE RISK. It is our policy not to enter into derivative
financial instruments. We do not currently have any significant foreign currency
exposure since we do not transact business in foreign currencies. Due to this,
we did not have significant overall currency exposure at March 3, 2001.

        FOREIGN CURRENCY RATE RISK. As almost all of our sales and expenses are
denominated in U.S. dollars, we have experienced only insignificant foreign
exchange gains and losses to date, and we do not expect to incur significant
gains and losses. We do not engage in foreign currency hedging activities.


                                       20


<PAGE>   21
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

        The following personal injury claims and legal proceedings seek monetary
damages and other relief relating to the product recall in 1996, as discussed in
Item 2 "Management's Discussion and Analysis of Financial Condition and Results
of Operations":

        1.      The McGregor Case: A personal injury lawsuit filed in Santa
                Clara County Superior Court, San Jose, California on June 2,
                1997 and served on June 16, 1997. There is no trial date set.

        2.      The Nixon Case: A personal injury lawsuit filed in Sacramento
                County Municipal Court, Sacramento, California on August 15,
                1997. There is no trial date set.

        We maintained commercial general liability insurance totaling
$27,000,000 during the period for which the above claims were filed. We notified
our insurance carrier of these events. At this time, we are unable to determine
the potential liability from the remaining legal proceedings and claims. The
recall related legal proceedings settled to date were covered under our
commercial general liability insurance policy and did not result in any
additional costs to us.

        We are subject to other legal proceedings and claims that arise in the
course of our business. We currently believe that the ultimate amount of
liability, if any, for any pending actions (either alone or combined) will not
materially affect our financial position, results of operations or liquidity.
However, the ultimate outcome of any litigation is uncertain, and unfavorable
outcomes could have a material negative impact on our results of operations and
financial condition.

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

        At the Company's Annual Meeting of Shareholders on February 6, 2001, the
following individuals were elected to the Board of Directors:


<TABLE>
<CAPTION>
                                                Votes For       Votes Withheld
                                                ---------       --------------
<S>                                             <C>             <C>
               D. Stephen C. Williamson         10,085,482           16,898
               Andrew B. Balson                 10,084,496           17,884
               Richard L. Grubman               10,084,526           17,854
               Ellis B. Jones                   10,084,882           17,498
               Mark E. Nunnelly                  9,956,331          146,049
               Juan I. Prado                    10,085,082           17,298
               Craig H. Sakin                   10,084,526           17,854
</TABLE>


        The shareholders also voted to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
fiscal year ending September 1, 2001. The results of the voting were as follows:


<TABLE>
<S>                                                          <C>
              Number of shares voted FOR                     10,092,679
              Number of shares voted AGAINST                      5,045
              Number of shares voted ABSTAINING                   4,656
</TABLE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        b. REPORTS ON FORM 8-K

        The Company did not file any reports on Form 8-K during the quarter
ended March 3, 2001.


                                       21


<PAGE>   22
                                    SIGNATURE

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


                                       ODWALLA, INC.
                                       -------------
                                       (Registrant)


Date:  April 16, 2001                  By:  /s/  D. STEPHEN C. WILLIAMSON
                                          -----------------------------------
                                          D. Stephen C. Williamson
                                          Chief Executive Officer
                                            (Principal Executive Officer)



Date: April 16, 2001                   By:  /s/  JAMES R. STEICHEN
                                          -----------------------------------
                                          James R. Steichen
                                          Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)

                                       22