<PAGE>   1

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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000


                         COMMISSION FILE NUMBER 0-26542
                           ---------------------------



                        REDHOOK ALE BREWERY, INCORPORATED
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                              <C>
                  WASHINGTON                          91-1141254
       (State or other jurisdiction of             (I.R.S. Employer
        incorporation or organization)           Identification No.)



          3400 PHINNEY AVENUE NORTH                   98103-8624
             SEATTLE, WASHINGTON
   (Address of principal executive offices)           (Zip Code)
</TABLE>



       Registrant's telephone number, including area code: (206) 548-8000


Indicate by check mark 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 [ ]


Common stock, par value $.005 per share: 7,687,786 shares outstanding as of
March 31, 2000.

                    Page 1 of 13 sequentially numbered pages

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<PAGE>   2

                        REDHOOK ALE BREWERY, INCORPORATED

                                    FORM 10-Q

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                TABLE OF CONTENTS



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

ITEM 1.  Financial Statements

             Balance Sheets
                March 31, 2000 and December 31, 1999 .........................    3

             Statements of Operations
                Three Months Ended March 31, 2000 and 1999 ...................    4

             Statements of Cash Flows
                Three Months Ended March 31, 2000 and 1999....................    5

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

ITEM 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations ........................................   7


PART II. OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K.....................................   12
</TABLE>



                                       2
<PAGE>   3

PART I.

ITEM 1.  FINANCIAL STATEMENTS

                        REDHOOK ALE BREWERY, INCORPORATED

                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                            MARCH 31,         DECEMBER 31,
                                                                              2000                1999
                                                                           ------------       ------------
                                                                           (Unaudited)
<S>                                                                        <C>                <C>

Current Assets:
  Cash and Cash Equivalents .........................................      $  4,367,713       $  5,462,779
  Accounts Receivable ...............................................         1,629,513          1,174,853
  Inventories .......................................................         2,478,342          2,406,797
  Other .............................................................           412,518            331,481
                                                                           ------------       ------------

    Total Current Assets ............................................         8,888,086          9,375,910
Fixed Assets, Net ...................................................        77,002,162         77,739,550
Other Assets ........................................................           544,408            591,431
                                                                           ------------       ------------
      Total Assets ..................................................      $ 86,434,656       $ 87,706,891
                                                                           ============       ============
</TABLE>


                          LIABILITIES, PREFERRED STOCK
                        AND COMMON STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

<S>                                                                        <C>                <C>
Current Liabilities:
  Accounts Payable ..................................................      $  2,480,890       $  2,743,971
  Accrued Salaries, Wages and Payroll Taxes .........................         1,297,491          1,408,552
  Refundable Deposits ...............................................         1,561,639          1,571,028
  Other Accrued Expenses ............................................           552,134            567,206
  Current Portion of Long-Term Debt .................................           450,000            450,000
                                                                           ------------       ------------
    Total Current Liabilities .......................................         6,342,154          6,740,757
                                                                           ------------       ------------
Long-Term Debt, Net of Current Portion ..............................         7,312,500          7,425,000
                                                                           ------------       ------------
Deferred Income Taxes ...............................................         1,368,323          1,627,067
                                                                           ------------       ------------
Convertible Redeemable Preferred Stock ..............................        16,066,155         16,055,055
                                                                           ------------       ------------

Common Stockholders' Equity:
  Common Stock, Par Value $0.005 per Share, Authorized, 50,000,000
    Shares; Issued and Outstanding, 7,687,786 Shares in 2000 and 1999            38,439             38,439
  Additional Paid-In Capital ........................................        56,989,631         56,989,631
  Retained Earnings (Deficit) .......................................        (1,682,546)        (1,169,058)
                                                                           ------------       ------------
      Total Common Stockholders' Equity .............................        55,345,524         55,859,012
                                                                           ------------       ------------
        Total Liabilities, Preferred Stock and
          Common Stockholders' Equity ...............................      $ 86,434,656       $ 87,706,891
                                                                           ============       ============
</TABLE>



                             See Accompanying Notes



                                       3
<PAGE>   4

                        REDHOOK ALE BREWERY, INCORPORATED

                            STATEMENTS OF OPERATIONS

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED MARCH 31,
                                                  -----------------------------
                                                     2000              1999
                                                  -----------       -----------
<S>                                               <C>               <C>
Sales ......................................      $ 8,156,474       $ 7,674,896
Less Excise Taxes ..........................          764,815           702,647
                                                  -----------       -----------
Net Sales ..................................        7,391,659         6,972,249
Cost of Sales ..............................        5,427,734         5,100,069
                                                  -----------       -----------
Gross Profit ...............................        1,963,925         1,872,180
Selling, General and Administrative Expenses        2,642,133         2,172,419
                                                  -----------       -----------
Operating Income (Loss) ....................         (678,208)         (300,239)
Interest Expense ...........................          140,544           130,418
Other Income-- Net .........................           63,281            35,745
                                                  -----------       -----------
Income (Loss) before Income Taxes ..........         (755,471)         (394,912)
Income Tax Expense (Benefit) ...............         (253,083)         (138,220)
                                                  -----------       -----------
Net Income (Loss) ..........................      $  (502,388)      $  (256,692)
                                                  ===========       ===========

Basic Earnings (Loss) per Share ............      $     (0.07)      $     (0.03)
                                                  ===========       ===========

Diluted Earnings (Loss) per Share ..........      $     (0.07)      $     (0.03)
                                                  ===========       ===========
</TABLE>



                             See Accompanying Notes


                                       4
<PAGE>   5

                        REDHOOK ALE BREWERY, INCORPORATED

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED MARCH 31,
                                                         -----------------------------
                                                            2000              1999
                                                         -----------       -----------
<S>                                                      <C>               <C>
OPERATING ACTIVITIES
Net Loss ..........................................      $  (502,388)      $  (256,692)
Adjustments to Reconcile Net Loss to Net Cash
  Provided by Operating Activities:
    Depreciation and Amortization .................          822,832           813,189
    Deferred Income Taxes .........................         (258,744)         (142,402)
    Net Change in Operating Assets and Liabilities          (950,539)          (52,772)
                                                         -----------       -----------
Net Cash Provided by (Used in) Operating Activities         (888,839)          361,323
                                                         -----------       -----------

INVESTING ACTIVITIES
Expenditures for Fixed Assets .....................          (92,727)         (284,138)
Proceeds from Sale of Assets and Other, Net .......           (1,000)          354,831
                                                         -----------       -----------
Net Cash Provided by (Used in) Investing Activities          (93,727)           70,693
                                                         -----------       -----------

FINANCING ACTIVITIES
Repayments on Debt ................................         (112,500)         (112,500)
                                                         -----------       -----------

Net Cash Used in Financing Activities .............         (112,500)         (112,500)
                                                         -----------       -----------

Increase (Decrease) in Cash and Cash Equivalents ..       (1,095,066)          319,516
Cash and Cash Equivalents:
  Beginning of Year ...............................        5,462,779         3,010,448
                                                         -----------       -----------
  End of Period ...................................      $ 4,367,713       $ 3,329,964
                                                         ===========       ===========
</TABLE>



                             See Accompanying Notes



                                       5
<PAGE>   6

                        REDHOOK ALE BREWERY, INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


1.  BASIS OF PRESENTATION

        The accompanying financial statements and related notes should be read
in conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K. The accompanying financial statements
include the accounts of Redhook Ale Brewery, Incorporated (the "Company") and
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. These financial statements are unaudited and condensed, and
do not contain all of the information required by generally accepted accounting
principles to be included in a full set of financial statements. In the opinion
of management, all material adjustments necessary to present fairly the
financial position, results of operations and cash flows of the Company, for the
periods presented, have been made. All such adjustments were of a normal,
recurring nature. The results of operations for such interim periods are not
necessarily indicative of the results of operations for the full year.

2.  EARNINGS (LOSS) PER SHARE

        The calculation of adjusted weighted-average shares outstanding for
purposes of computing diluted earnings per share includes the dilutive effect of
all outstanding convertible redeemable preferred stock and outstanding stock
options for the periods in which the Company reports net income. The calculation
uses the treasury stock method in determining the resulting incremental average
equivalent shares outstanding when they are dilutive.

        The following table sets forth the computation of basic and diluted
earnings (loss) per common share:

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED MARCH 31,
                                                    -----------------------------
                                                       2000              1999
                                                    -----------       -----------
<S>                                                 <C>               <C>
Basic earnings (loss) per share computation:
  Numerator:
    Net income (loss) ........................      $  (502,388)      $  (256,692)
                                                    -----------       -----------

  Denominator:
    Weighted-average common shares ...........        7,687,786         7,687,486
                                                    -----------       -----------

        Basic earnings (loss) per share ......      $     (0.07)      $     (0.03)
                                                    ===========       ===========

Diluted earnings (loss) per share computation:
  Numerator:
    Net income (loss) ........................      $  (502,388)      $  (256,692)
                                                    -----------       -----------

  Denominator:
    Weighted-average common shares ...........        7,687,786         7,687,486
                                                    -----------       -----------

          Diluted earnings (loss) per share ..      $     (0.07)      $     (0.03)
                                                    ===========       ===========
</TABLE>

3.  INVENTORIES

        Inventories consist of the following:

<TABLE>
<CAPTION>
                              MARCH 31,      DECEMBER 31,
                                2000            1999
                             ----------      ----------
<S>                          <C>             <C>
Finished goods ........      $1,121,326      $1,059,460
Raw materials .........         871,627         814,106
Promotional merchandise         319,376         342,071
Packaging materials ...         166,013         191,160
                             ----------      ----------

                             $2,478,342      $2,406,797
                             ==========      ==========
</TABLE>

        Finished goods include beer held in fermentation prior to the filtration
and packaging process.





                                       6
<PAGE>   7

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

        The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and Notes thereto included herein.

OVERVIEW

        Since its formation, the Company has focused its business activities on
the brewing, marketing and selling of craft beers. For the three months ended
March 31, 2000, the Company had gross sales of $8,156,000, an increase of 6.3%
from the three months ended March 31, 1999. The Company's sales consist
predominantly of sales of beer to third-party distributors and Anheuser-Busch,
Inc. ("A-B") through the Distribution Alliance. In addition, the Company derives
other revenues primarily from the sale of beer, food, apparel and other retail
items in its brewery pubs. The Company is required to pay federal excise taxes
on sales of its beer. The excise tax burden on beer sales increases from $7 to
$18 per barrel on annual production over 60,000 barrels and thus, if sales
volume fluctuates, federal excise taxes would change as a percentage of sales.

        The Company's sales volume increased 7.7% to 46,400 barrels for the
three months ended March 31, 2000, compared to the same period in 1999. In
addition to the level of consumer demand in existing markets, the Company's
sales are also affected by other factors such as competitive considerations,
including the significant number of craft brewers and their promotional pricing
and new product introductions as well as increased competition from imported
beers. Sales in the craft beer industry generally reflect a degree of
seasonality, with the first and fourth quarters historically being the slowest
and the rest of the year typically demonstrating stronger sales. The Company has
historically operated with little or no backlog, and its ability to predict
sales for future periods is limited.

        Under normal circumstances, the Company generally operates its brewing
facilities up to five days per week, two shifts per day. The Company increased
its company-wide annual production capacity from approximately 3,000 barrels in
1982 to approximately 350,000 barrels as of March 31, 2000. Production capacity
of each facility can be added in phases until the facility reaches its maximum
designed production capacity. The decision to add capacity is affected by the
availability of capital, construction constraints and anticipated sales in new
and existing markets. While the maximum designed capacity for each of the
Woodinville and Portsmouth breweries is 250,000 barrels per year, their current
production capacity is 250,000 and 100,000 barrels per year, respectively.
Additional capital expenditures and production personnel will be required to
bring the Portsmouth Brewery to its maximum designed capacity.

        The Company's capacity utilization has a significant impact on gross
profit. When facilities are operating at their maximum designed production
capacities, profitability is favorably affected by spreading fixed and
semivariable operating costs, such as depreciation and production salaries, over
a larger sales base. Most capital costs associated with building a new brewery,
and fixed and semivariable costs related to operating a new brewery, are
incurred prior to, or upon commencement of, production at a facility. Because
the actual production level may be substantially below the facility's maximum
designed production capacity, gross margins are negatively impacted. This impact
is reduced when actual production increases.

        In January 1998, production at the Fremont Brewery was significantly
reduced, and the brewery served as a backup facility to the Woodinville Brewery.
During the quarter ended June 30, 1998, the Company analyzed its current and
future production capacity requirements and its plans for the Fremont Brewery
production assets. Based upon that analysis, the Company decided to permanently
curtail the Fremont Brewery operations and sell substantially all of those
production assets. In compliance with FASB Statement No. 121, the Fremont
production assets were written down to an estimate of their net realizable value
in the quarter ended June 30, 1998. During 1999, the Company completed the sale
of the equipment for an amount approximately equal to its estimated net
realizable value.

        In addition to capacity utilization, the Company expects other factors
to influence profit margins, including higher costs associated with the
development of newer distribution territories, such as increased shipping,
marketing and sales personnel costs; fees related to the distribution agreement
with A-B; changes in packaging and other material costs; and changes in product
sales mix.



                                       7
<PAGE>   8

        See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Certain Considerations: Issues and Uncertainties."


RESULTS OF OPERATIONS

        The following table sets forth, for the periods indicated, certain items
from the Company's Statements of Operations expressed as a percentage of net
sales.

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED
                                                       MARCH 31,
                                                  ------------------
                                                  2000         1999
                                                  -----        -----
<S>                                               <C>          <C>
Sales ......................................      110.3 %      110.1 %
Less Excise Taxes ..........................       10.3         10.1
                                                  -----        -----
Net Sales ..................................      100.0        100.0
Cost of Sales ..............................       73.4         73.1
                                                  -----        -----
Gross Profit ...............................       26.6         26.9
Selling, General and Administrative Expenses       35.7         31.2
                                                  -----        -----
Operating Income (Loss) ....................       (9.1)        (4.3)
Interest Income (Expense)-- Net ............       (1.1)        (1.4)
                                                  -----        -----
Income (Loss) Before Income Taxes ..........      (10.2)        (5.7)
Provision (Benefit) for Income Taxes .......       (3.4)        (2.0)
                                                  -----        -----
Net Income (Loss) ..........................       (6.8)%       (3.7)%
                                                  =====        =====
</TABLE>


THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

        Sales. Total sales increased 6.3% to $8,156,000 for the three months
ended March 31, 2000, compared to $7,675,000 in the comparable 1999 period,
resulting from a 7.7% increase in sales volume and an increase in other sales,
offset by slightly lower average pricing, net of promotional discounts. Total
sales volumes for the first quarter of 2000 increased to 46,400 barrels from
43,100 barrels for the same period in 1999. West Coast sales increased 4.2% in
the first quarter of 2000, including a 7.0% increase in Washington State, the
Company's largest market. Sales other than wholesale beer sales, primarily
retail pub revenues, totaled $835,000 in the first three months of 2000,
compared to $701,000 in the comparable 1999 period. At March 31, 2000 and 1999,
the Company's products were distributed in 48 states.

        Excise Taxes. Excise taxes increased to $765,000, or 10.3% of net sales
in the 2000 first quarter, compared to $703,000, or 10.1% of net sales in the
1999 first quarter.

        Cost of Sales. Cost of sales increased to $5,428,000 in the first three
months of 2000, compared to $5,100,000 in the comparable 1999 period, primarily
due to increased sales volumes. The combined utilization rate of maximum
designed capacity for the operating breweries was 37.1% and 34.5% for quarters
ended March 31, 2000 and 1999, respectively. Cost of sales, as a percentage of
net sales, was substantially unchanged at 73.4% for the 2000 period, compared to
73.1% for the 1999 period.

        Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $2,642,000 in the 2000 first quarter,
compared to $2,172,000 in the 1999 first quarter. As a percentage of net sales,
these expenses were 35.7% and 31.2% for the three months ended March 31, 2000
and 1999, respectively. The increase is due primarily to the advertising
campaign in three key markets that began in June 1999, partially offset by cost
savings such as office rent and compensation.

        Interest Expense. Interest expense increased to $141,000 for the first
quarter of 2000, compared to $130,000 for the comparable 1999 period, reflecting
higher average interest rates partially offset by the effect of lower
outstanding debt.



                                       8
<PAGE>   9

        Other Income (Expense) -- Net. Other income - net, increased to $63,000
in the 2000 first quarter, compared to $36,000 in the 1999 first quarter. The
increase is due to an increase in average balance of interest-bearing deposits
and higher interest rates.

        Income Taxes. The Company's effective income tax rate decreased to a
33.5% benefit for the first quarter of 2000 compared to 35.0% benefit for the
first quarter of 1999. The effective income tax rate for the full year 1999 was
33.5%.


LIQUIDITY AND CAPITAL RESOURCES

        The Company had $4,368,000 and $5,463,000 of cash and cash equivalents
at March 31, 2000 and December 31, 1999, respectively. At March 31, 2000, the
Company had working capital of $2,546,000, compared to $2,635,000 at December
31, 1999. The Company's long-term debt as a percentage of total capitalization
(long-term debt, preferred stock and common stockholders' equity) was 9.8% and
9.9% as of March 31, 2000 and December 31, 1999, respectively. Cash used in
operating activities was $889,000 during the 2000 first quarter compared to cash
provided by operating activities of $361,000 in the 1999 first quarter. The
decrease in operating cash flow in the three months ended March 31, 2000, was
due to the timing of the collection of accounts receivable and payment of
accounts payable in December 1999.

        On June 5, 1997, the Company converted the $9 million outstanding
balance of its secured bank facility (the "Secured Facility") to a five-year
term loan with a 20-year amortization schedule. As of March 31, 2000, there was
$7.8 million outstanding on the Secured Facility, and the Company's one-month
LIBOR-based borrowing rate was approximately 7.4%. In addition, the Company has
a $10 million revolving credit facility (the "Revolving Facility") with the same
bank through July 1, 2001, and as of March 31, 2000, there were no borrowings
outstanding on this facility. The Revolving Facility is secured with the same
assets that are collateral for the Secured Facility. Interest accrues at a
variable rate based on the London Inter Bank Offered Rate ("LIBOR"), plus 1.25%
to 2.00% for the Secured Facility depending on the Company's debt-to-tangible
net worth ratio. The interest rate for the Revolving Facility is the applicable
LIBOR plus 1.00% to 2.00%, depending on the Company's debt service-to-cash flow
ratio. The Company can fix the rate for up to twelve months by selecting LIBOR
for one- to twelve-month periods as a base.

        The Company has required capital principally for the construction and
development of its technologically-advanced production facilities. To date, the
Company has financed its capital requirements through cash flow from operations,
bank borrowings and the sale of common and preferred stock. The Company expects
to meet its future financing needs, including the significantly higher
advertising expenditures, and working capital and capital expenditure
requirements, through cash on hand, operating cash flow and, to the extent
required and available, bank borrowings and offerings of debt or equity
securities.

        Capital expenditures for the first quarter of 2000 totaled $93,000.
Capital expenditures for the full year 2000 are expected to total approximately
$1,000,000.

        The Company has certain commitments, contingencies and uncertainties
relating to its normal operations. Management believes that any such
commitments, contingencies or uncertainties, including any environmental
uncertainties, will not have a material adverse effect on the Company's
financial position or results of operations.



                                       9
<PAGE>   10

CERTAIN CONSIDERATIONS: ISSUES AND UNCERTAINTIES

        The Company does not provide forecasts of future financial performance
or sales volumes, although this Annual Report contains certain other types of
forward-looking statements that involve risks and uncertainties. The Company
may, in discussions of its future plans, objectives and expected performance in
periodic reports filed by the Company with the Securities and Exchange
Commission (or documents incorporated by reference therein) and in written and
oral presentations made by the Company, include forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, or
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are based on assumptions that the Company believes
are reasonable, but are by their nature inherently uncertain. In all cases,
there can be no assurance that such assumptions will prove correct or that
projected events will occur. Actual results could differ materially from those
projected depending on a variety of factors, including, but not limited to, the
issues discussed below, the successful execution of market development and other
plans and the availability of financing. While Company management is optimistic
about the Company's long-term prospects, the following issues and uncertainties,
among others, should be considered in evaluating its business prospects and any
forward-looking statements.

        Effect of Competition on Future Sales. The domestic market in which the
Company's craft beers are sold is highly competitive due to the proliferation of
small craft brewers, including contract brewers, the increase in the number of
products offered by such brewers, increased competition from imported beers and
the introduction of fuller-flavored products by major national brewers. The
Company's revenue growth rate began to slow in late 1996, and sales volume
declined between 2.3% and 5.7% during 1997, 1998 and 1999, due primarily to
slower sales in the highly competitive draft beer market. If negative sales
trends were to continue, the Company's future sales and results of operations
would be adversely affected. Sales volumes during the quarters ended September
30, 1999, December 31, 1999 and March 31, 2000 increased from 6.0% to 7.7%. The
Company has historically operated with little or no backlog and, therefore, its
ability to predict sales for future periods is limited.

        Sales Prices. Future prices the Company charges for its products may
decrease from historical levels, depending on competitive factors in the
Company's various markets. The Company has participated in price promotions with
its wholesalers and their retail customers in most of its markets. The number of
markets in which the Company participates in price promotions and the frequency
of such promotions may increase in the future.

        Variability of Gross Margin and Cost of Sales. The Company anticipates
that its future gross margins will fluctuate and may decline as a result of many
factors, including disproportionate depreciation and other fixed and
semivariable operating costs, during periods when the Company's breweries are
producing below maximum designed production capacity. The Company's high level
of fixed and semivariable operating costs causes gross margin to be very
sensitive to relatively small increases or decreases in sales volume. In
addition, other factors affect cost of sales including changes in: shipping
costs, availability and prices of raw materials and packaging materials, mix
between draft and bottled product sales, the sales mix of various bottled
product packages and Federal or state excise taxes. Also, as sales volumes
through the Distribution Alliance increase, the alliance fee, and other staging
and administrative costs, would increase.

        Advertising and Promotional Costs. While the Company has previously done
very limited advertising, based upon market and competitive considerations, it
determined that a significant increase in such spending is appropriate.
Accordingly, in June 1999 the Company began a brand investment program that
significantly increased advertising and related costs in 1999. The increased
advertising investment continued in the first quarter of 2000 and is expected to
continue through the year 2000 with the objective of establishing momentum
towards capturing a larger share of the fragmented craft beer market. This
increased spending has significantly increased the Company's net losses and
decreased its stockholders' equity. In addition, market and competitive
considerations could require an increase in other promotional costs associated
with developing existing and new markets.



                                       10
<PAGE>   11

        Relationship with Anheuser-Busch, Incorporated. Most of the Company's
future sales are expected to be through the Distribution Alliance with A-B. If
the Distribution Alliance were to be terminated, or if the relationship between
A-B and the Company were to deteriorate, the Company's sales and results of
operations could be materially adversely affected. While the Company believes
that the benefits of the Distribution Alliance, in particular distribution and
material cost efficiencies, offset costs associated with the Alliance, there can
be no assurance that these costs will not have a negative impact on the
Company's profit margins in the future.

        Dependence on Third-Party Distributors. The Company relies heavily on
third-party distributors for the sale of its products to retailers. The
Company's most significant non-Alliance wholesaler, K&L Distributors, Inc., an
A-B affiliated wholesaler in the Seattle area, accounted for approximately 14.6%
of the Company's sales in the first quarter of 2000. Substantially all of the
remaining sales volumes are now through the Distribution Alliance to A-B
affiliated distributors, most of whom are independent wholesalers. A disruption
of wholesalers' or A-B's ability to distribute products efficiently due to any
significant operational problems, such as wide-spread labor union strikes, or
the loss of K&L Distributors as a customer, or the termination of the
Distribution Alliance could have a material adverse impact on the Company's
sales and results of operations.

        Customer Acceptance, Consumer Trends and Public Attitudes. If consumers
were unwilling to accept the Company's products or if general consumer trends
caused a decrease in the demand for beer, including craft beer, it could
adversely impact the Company's sales and results of operations. The alcoholic
beverage industry has become the subject of considerable societal and political
attention in recent years due to increasing public concern over alcohol-related
social problems, including drunk driving, underage drinking and health
consequences from the misuse of alcohol. If beer consumption in general were to
come into disfavor among domestic consumers, or if the domestic beer industry
were subjected to significant additional governmental regulation, the Company's
sales and results of operations could be adversely affected.

        Effect of Sales Trends on Brewery Efficiency and Operations. In recent
years the Company's sales volumes have declined modestly. Those declines
coincided with significantly slower sales growth in the highly competitive craft
beer segment. The Company's breweries have been operating at production levels
substantially below their actual and maximum designed capacities. Operating
breweries at low capacity utilization rates negatively impacts gross margins and
operating cash flows generated by the production facilities. In 1998, the
Company permanently curtailed production at its Fremont Brewery and wrote the
related assets down to their estimated net realizable value. The Company will
continue to evaluate whether it expects to recover the costs of its two
remaining production facilities over the course of their useful lives.

        Impact of Year 2000. The Company previously discussed the nature and
progress of its plans to become Year 2000 ready. In late 1999, the Company
completed software upgrades and testing of systems. The Company experienced no
significant disruptions in critical information technology and operational
systems and believes those systems successfully responded to the Year 2000 date
change. The Company incurred less than $75,000 of costs during 1999 in
connection with upgrades and modifications of its systems. The Company is not
aware of any material problems resulting from Year 2000 issues, either with its
products, its internal systems, or the products and services of third parties.
The Company will continue to monitor its critical computer applications and
those of its suppliers and vendors to ensure that any latent Year 2000 matters
that may arise are addressed promptly.

RECENT ACCOUNTING PRONOUNCEMENTS

        In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). This statement establishes accounting and reporting
standards for derivative instruments and for hedging activities. In June 1999,
the FASB issued SFAS 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133", to defer
the effective date of SFAS 133 until fiscal years beginning after June 15, 2000.
The Company anticipates that the adoption of this new accounting standard will
not have a material impact on its financial position or results of operations.



                                       11
<PAGE>   12

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company does not have any derivative financial instruments as of
March 31, 2000. However, the Company is exposed to interest rate risk. The
Company's long-term debt bears interest at a rate that is tied to a variable
rate. Information pertaining to the Company's debt balance and terms is set
forth above in this Item 2 "Management's Discussion and Analysis of Financial
Condition and Results of Operations."


PART II.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS
    The following exhibits are filed as part of this report.

       27 Financial Data Schedule for the three months ended March 31, 2000.

(b) REPORTS ON FORM 8-K
    None were filed during the quarter ended March 31, 2000.


ITEMS 1, 2, 3, 4 AND 5 OF PART II ARE NOT APPLICABLE AND HAVE BEEN OMITTED.



                                       12
<PAGE>   13

                                    SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Seattle,
State of Washington, on May 10, 2000.


                                            REDHOOK ALE BREWERY, INCORPORATED





                                            BY:   /s/  Bradley A. Berg
                                               ---------------------------------
                                               Bradley A. Berg
                                               Executive Vice President and
                                               Chief Financial Officer






                                            BY:   /s/  Anne M. Mueller
                                               ---------------------------------
                                               Anne M. Mueller
                                               Controller and Treasurer,
                                               Principal Accounting Officer




DATE: May 10, 2000

<PAGE>   14
                                 EXHIBIT INDEX

    Ex-27  Financial Data Schedule