SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K
                                   (Mark One)
      [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                       EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 2000

                                       OR

 [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                          ACT OF 1934 [NO FEE REQUIRED]

                  For the transition period from _____ to _____

                         Commission File Number 0-18761

                           HANSEN NATURAL CORPORATION
             (Exact name of Registrant as specified in its charter)

             Delaware                            39-1679918
             (State or other jurisdiction of     (I.R.S. Employer
             incorporation or organization       Identification No.)

                 1010 Railroad Street, Corona, California 92882
               (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code: (909) 739 - 6200

                    Securities registered pursuant to Section
                               12(b) of the Act:

                                                 Name of each exchange
              Title of each class                on which registered
              Not Applicable                     Not Applicable

                    Securities registered pursuant to Section
                               12(g) of the Act:

                                 Title of class
                    Common Stock, $0.005 par value per share

         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

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  Registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

         The aggregate market value of the voting stock held by nonaffiliates of
the Registrant was approximately  $20,716,866  computed by reference to the sale
price for such stock on the NASDAQ Small-Cap Market on March 2, 2001.

         The number of shares of the Registrant's common stock, $0.005 par value
per share (being the only class of common stock of the Registrant),  outstanding
on March 2, 2001 was 10,045,003 shares.



<PAGE>


<TABLE>
<CAPTION>

                                                      HANSEN NATURAL CORPORATION

                                                               FORM 10-K

                                                           TABLE OF CONTENTS


<S>            <C>                                                                               <C>

Item Number                                                                                      Page Number

                                                 PART I

1.             Business                                                                                   3
2.             Properties                                                                                16
3.             Legal Proceedings                                                                         16
4.             Submission of Matters to a Vote of Security Holders                                       17

                                                 PART II

5.             Market for the Registrant's Common Equity and Related                                     17
                    Shareholder Matters
6.             Selected Consolidated Financial Data                                                      18
7.             Management's Discussion and Analysis of Financial                                         19
                    Condition and Results of Operations
8.             Financial Statements and Supplementary Data                                               28
9.             Changes in and Disagreements with Accountants on                                          28
                    Accounting and Financial Disclosure

                                                PART III

10.            Directors and Executive Officers of the Registrant                                        29
11.            Executive Compensation                                                                    30
12.            Security Ownership of Certain Beneficial Owners and Management                            35
13.            Certain Relationships and Related Transactions                                            37

                                                 PART IV

14.            Exhibits, Financial Statement Schedules and Reports on Form 8-K                           38

               Signatures                                                                                39
</TABLE>


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                                     PART I


ITEM 1.  BUSINESS

Background of the Company and Subsidiaries

Hansen Natural Corporation  ("Hansen" or the "Company"),  which was incorporated
in Delaware on April 25, 1990, maintains its principal place of business at 1010
Railroad  Street,  Corona,  California  92882, and its telephone number is (909)
739-6200.

         The Company is a holding  company and carries on no operating  business
except through its direct  wholly-owned  subsidiaries,  Hansen Beverage  Company
("HBC") which was  incorporated  in Delaware on June 8, 1992 and Hard e Beverage
Company  ("HEB")  formerly  known as Hard  Energy  Company and  previously,  CVI
Ventures,  Inc.,  which was  incorporated  in  Delaware on April 30,  1990.  HBC
conducts the vast  majority of the  Company's  operating  business and generates
substantially all of the Company's operating revenues.  During the third quarter
of 2000, the Company,  through HEB, introduced a malt-based drink under the name
Hard e which  contains  up to  five-percent  alcohol.  The Hard e product is not
marketed under the Hansen's name. References herein to "Hansen" or the "Company"
when used to describe the  operating  business of the Company are  references to
the business of HBC unless otherwise indicated and references herein to HEB when
used to describe the  operating  business of HEB, are  references  to the Hard e
(TM) brand business of HEB unless otherwise indicated.

         In addition, HBC, through its wholly-owned subsidiary, Blue Sky Natural
Beverage Co., ("Blue Sky"),  which was  incorporated in Delaware on September 8,
2000,  acquired  full  ownership  of and  operates  the  natural  soda  business
previously  conducted by Blue Sky Natural Beverage Co., a New Mexico corporation
("BSNBC"), under the Blue Sky(R) trademark.

Background of the Hansen Business

         In the 1930's,  Hubert  Hansen and his three sons started a business to
sell fresh  non-pasteurized  juices in Los Angeles,  California.  This  business
eventually became Hansen's Juices, Inc., now known as The Fresh Juice Company of
California,  Inc. ("FJC").  In 1977, Tim Hansen,  one of the grandsons of Hubert
Hansen,  perceived a demand for pasteurized natural juices and juice blends that
are shelf stable and formed Hansen Foods, Inc. ("HFI"),  which was also based in
the Los Angeles  area.  HFI  expanded  its  product  line from juices to include
Hansen's(R)  Natural Sodas.  California  Co-packers  Corporation  (d/b/a/ Hansen
Beverage  Company) ("CCC") acquired certain assets of HFI including the right to
market the  Hansen's(R)  brand name,  in January  1990.  On July 27,  1992,  the
Company,  through HBC,  acquired the  Hansen's(R)  brand  natural soda and apple
juice business (the "Hansen Business") from CCC. Under the Company's  ownership,
the Hansen Business has been  significantly  expanded to include a wide range of
beverages within the growing  "alternative"  beverage category. On September 20,
2000, HBC acquired the Blue Sky Natural Soda business,  through its wholly owned
subsidiary Blue Sky, from BSNBC.

Products

         Hansen  is  engaged  in  the   business  of   marketing,   selling  and
distributing  so-called  "alternative"  beverage  category natural sodas,  fruit
juices,   fruit   juice   Smoothies,    "functional   drinks",    non-carbonated
ready-to-drink   iced   teas,   lemonades   and  juice   cocktails,   children's
multi-vitamin  juice drinks and still water under the Hansen's(R)  brand name as
well as  nutritional  bars and cereals  also under the  Hansen's(R)  brand name,
natural  sodas under the Blue Sky(R)  brand name and malt based drinks under the
Hard e brand name.

         The   alternative    beverage    category    combines    non-carbonated
ready-to-drink  iced teas,  lemonades,  juice  cocktails,  single serve  juices,
ready-to-drink  iced coffees,  sports drinks and  single-serve  still water with
"new age"  beverages,  including  sodas that are considered  natural,  sparkling
juices and flavored sparkling waters.  The alternative  beverage category is the
fastest growing segment of the beverage marketplace. (Source: Beverage Marketing

                                       3

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Corporation).  Sales for the  alternative  beverage  category  of the market are
estimated to have reached approximately $9.7 billion at wholesale in 2000 with a
growth  rate of  approximately  11%  over  the  prior  year.  (Source:  Beverage
Marketing Corporation).

         Hansen's(R)  Natural Sodas are  classified  as "new age"  beverages and
have been a leading  natural soda brand in Southern  California  for the past 23
years. In 2000, Hansen's(R) Natural Sodas had the highest sales among comparable
carbonated  new age category  beverages  measured by unit volume in the Southern
California market (Source:  Information  Resources,  Inc.'s Analyzer Reports for
Southern  California).  Hansen's(R)  Natural  Sodas are  currently  available in
twelve  regular  flavors  consisting  of Mandarin  Lime,  Key Lime,  Grapefruit,
Raspberry,  Creamy Root Beer, Vanilla Cola, Cherry Vanilla Creme,  Orange Mango,
Kiwi  Strawberry,   Tropical  Passion,   Black  Cherry  and  Tangerine.   Hansen
discontinued  its low calorie sodas in Wildberry and Cola flavors and at the end
of 2000,  introduced a new line of diet sodas with  Splenda(R)  sweetener as the
primary sweetener.  This line has been introduced in four flavors:  Peach, Black
Cherry,  Tangerine Lime, and Kiwi Strawberry.  Hansen's(R) Natural Sodas contain
no preservatives, sodium, caffeine or artificial coloring and are made with high
quality  natural  flavors,  citric acid and high fructose corn syrup,  or in the
case of its diet sodas,  with Splenda(R) and Acesulfame K.  Hansen's(R)  Natural
Sodas are currently packaged in 12-ounce aluminum cans.

         In January 1999,  Hansen's introduced its new premium line of Signature
Sodas  in  unique  proprietary  14-ounce  glass  bottles.  Signature  Sodas  are
currently  available in six flavors  consisting of Orange Creme,  Vanilla Creme,
Ginger Beer, Sarsaparilla,  Black Cherry and Sangria.  Signature Sodas are being
marketed  through the Company's  existing  distributor  network but in 2001, the
Company plans to market these products in certain markets  directly  through its
warehouse  division.  During  September 2000, the Company  acquired the Blue Sky
Natural Soda business from BSNBC.  The Blue Sky product line  comprises  natural
sodas in cans,  which are available in fourteen  regular  flavors  consisting of
Lemon Lime, Grapefruit,  Cola, Root Beer, Raspberry, Cherry Vanilla Creme, Truly
Orange,  Jamaican  Ginger Ale, Black Cherry,  Orange Creme,  Dr. Becker,  Cherry
Lemon Lime,  Grape and Private  Reserve Cream Soda.  Blue Sky also has a premium
line of natural sodas, which contain  supplements such as Ginseng.  This line is
currently  available in six flavors  consisting of Ginseng Creme,  Ginseng Cola,
Ginseng Root Beer,  Ginseng Very Berry  Creme,  Ginseng  Ginger Ale, and Ginseng
Cranberry-Raspberry.  During 1999, Blue Sky introduced a line of organic natural
sodas,  which are currently  available in five flavors  consisting of Prime Lime
Cream, New Century Cola,  Orange Divine,  Ginger Gale, and Black Cherry Cherish.
The Company also markets a seltzer water under the Blue Sky label.  The Blue Sky
products contain no preservatives,  sodium,  caffeine or artificial coloring and
are made with high  quality  natural  flavors.  All Blue Sky  Natural  Sodas and
seltzer waters are currently packaged in 12-ounce aluminum cans.

         During April 1997, the Company  introduced a lightly  carbonated citrus
flavored Hansen's(R) energy drink in an 8.2-ounce slim can. The Company's energy
drink  falls  within the  category  that has  generally  been  described  as the
"functional"  beverage  category,  namely,  beverages  that  provide  a real  or
perceived  benefit in  addition  to simply  delivering  refreshment.  Management
believes  that the  "functional"  beverage  category has good growth  potential.
During the first quarter of 1998, the Company  extended its  functional  product
line by introducing  three additional  functional drinks in 8.2-ounce slim cans,
namely, a ginger flavored d-stress(R) drink, an orange flavored antioox(R) drink
(since  renamed bo well(TM)),  and a guarana berry  flavored  stamina(R)  drink.
During the fourth quarter of 1998, the Company  introduced its power  functional
drink in 8.2-ounce  slim cans,  which is currently  marketed in a grape  flavor.
During  2000 the  Company  introduced  slim down,  its sixth  functional  drink.
slim-down is a berry-flavored drink that has no calories.  Each of the Company's
functional  drinks  contains  different  combinations  of  vitamins,   minerals,
nutrients, herbs and supplements ("supplements").

         The Company has  concentrated  on marketing its  carbonated  functional
drinks  and  Smoothies  and  Signature   Sodas  in  glass  bottles  through  its
distributor network,  which continued to expand during 2000. The Company intends
to leverage  its existing  distributor  network to  facilitate  sales of its new
premium line of  alternative  healthy  iced teas and drinks,  which is currently
being launched under the "Medicine Man" label, as well as other new single-serve

                                       4

<PAGE>
products  in glass  bottles  and cans that it plans to  introduce  during  2001,
certain of which are described more fully below.

         The Company's fruit juice product line currently  includes  Hansen's(R)
Natural  Old  Fashioned  Apple  Juice  which is  packaged  in  64-and  128-ounce
polyethylene  terephthalate ("P.E.T.") plastic bottles, and Apple Strawberry and
Apple Grape juice blends in 64-ounce P.E.T. plastic bottles.  These juice blends
were introduced in the second quarter of 1998. These  Hansen's(R) juice products
contain 100% juice as well as 100% of the recommended daily intake for adults of
Vitamin C. Certain of these  products  also contain added  calcium.  Hansen's(R)
juice products compete in the shelf-stable juice category.  The Company plans to
introduce an  Apple-Cranberry  juice blend,  a Cranberry  juice  cocktail and an
Orange-Carrot juice blend in 64-ounce P.E.T.  plastic bottles during 2001. These
products will not contain 100% juice.

         In  March  1995,  the  Company  expanded  its  juice  product  line  by
introducing a line of fruit juice Smoothies. The Company's fruit juice Smoothies
have a smooth  texture  that is thick  but  lighter  than a nectar  and  contain
approximately  35% juice  (the  Company  plans to reduce  the juice  level to an
average  of 25%  juice in line with the  current  juice  level of the  Company's
Smoothies  in 12-ounce  glass  bottles).  The  Company's  fruit juice  Smoothies
provide  100% of the  recommended  daily  intake for adults of Vitamins A, C & E
(the  antioxidant  triad) and  represented  Hansen's entry into what is commonly
referred to as the  "functional"  beverage  category.  The Company's fruit juice
Smoothies are packaged in 11.5-ounce aluminum cans and in new unique proprietary
12-ounce glass bottles  designed by the Company,  as well as in 64-ounce  P.E.T.
plastic  bottles.  Hansen's(R)  fruit juice  Smoothies  are  available in eleven
flavors:  Strawberry  Banana,  Peach Berry,  Mango Pineapple,  Guava Strawberry,
Pineapple  Coconut,   Apricot  Nectar,  Tropical  Passion,  Whipped  Orange  and
Cranberry  Twist.  The product  line also  includes a Cranberry  Raspberry  lite
Smoothie as well as an Energy Smoothie which has a unique  formula.  The Company
extended its Smoothie line in 64-ounce  P.E.T.  plastic bottles from two flavors
to six flavors during 2000.

         During the second half of 1999,  the Company  introduced  a new line of
premium functional Smoothies in 11.5-ounce cans Energy, Power, Protein and Vita.
Each of these products contain different combinations of supplements. Energy has
a tropical fruit flavor.  Power has a berry flavor.  Protein has a banana citrus
flavor. Vita has an orange carrot flavor. The juice levels of these products are
generally higher than the juice levels of the regular Smoothie line. The Company
plans  to  reposition  this  line as line  extensions  to its  existing  regular
Smoothie line. The Company is in the process of reformulating  these products to
reduce the juice  levels to the same  levels as the regular  Smoothie  products.
During  the fourth  quarter  of 1999,  the  Company  introduced  certain of such
premium functional Smoothies as line extensions to its existing Smoothie line in
12-ounce glass bottles.
         .
         During  the second  quarter of 1998,  the  Company  launched  its first
Healthy Start product,  Dyna  Juice(R),  a shelf stable 100% juice blend with 15
vitamins and minerals added. Dyna Juice(R) was renamed  VITAMAX-JUICE during the
fourth quarter of 1998 to more directly communicate its attributes to consumers.
During the fourth  quarter of 1998,  the  Company  expanded  its  Healthy  Start
product line with three new Healthy  Start 100% juices  namely,  ANTIOXJUICE(R),
IMMUNEJUICE(TM)  and  INTELLIJUICE(R).  ANTIOXJUICE(R)  is a carrot and tropical
juice  blend,   IMMUNEJUICE(TM)is  an  aronia  and  cranberry  juice  blend  and
INTELLIJUICE(R)  is an orange and tomato juice blend.  Each of the Healthy Start
products contain different  combinations of supplements.  The Healthy Start line
was originally  launched in 46-ounce  P.E.T.  plastic  bottles and at the end of
1998 the Company  expanded this line into  64-ounce  P.E.T.  plastic  bottles as
well.  Early in 2000,  the Company  entered into a licensing  agreement with the
Silver Foxes  Network for the  licensing to the Company of the Silver  Foxes(TM)
brand and trademark, which is positioned towards consumers in the 50+ age group,
for and in  connection  with  certain of the  Company's  products.  The  Company
determined to use that  trademark  for and in connection  with its Healthy Start
100%  juice   line.   The   Company   redesigned   the  labels  for  its  Silver
Foxes(TM)/Healthy Start juice line and relaunched the re-named line during 2000.
However, sales from such relaunched line have been disappointing and the Company
is currently reevaluating this line.

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         In the first quarter of 2000, the Company  introduced its Healthy Start
100% juice line in single-serve glass bottles,   which was marketed  through its
distributor network.  However, response from distributors and consumers has been
disappointing  and the Company is  currently  commencing  to market this product
line  through its  warehouse  division to selected  retail  outlets,  where such
products may have greater appeal.

         Hansen's(R)  ready-to-drink  iced teas and lemonades were introduced in
1993.  Hansen's(R)  ready-to-drink  iced teas are  currently  available in three
flavors:  Original  with Lemon,  Tropical  Peach and  Wildberry.  Lemonades  are
currently available in one flavor: Original Old Fashioned Lemonade.  Hansen's(R)
juice  cocktails  were  introduced in 1994 and are  currently  available in four
flavors:  Kiwi  Strawberry  Melon,   Tangerine  Pineapple  with  Passion  Fruit,
California  Paradise Punch and Mango Magic. The Company plans to introduce a new
12-pack  variety  pack of iced  teas  during  the first  half of 2001.  Hansen's
ready-to-drink  iced teas,  lemonades and juice cocktails are currently packaged
in 16-ounce non-returnable wide-mouth glass bottles.

         Hansen's(R)  ready-to-drink  iced teas are made with decaffeinated tea.
The Company's other  non-carbonated  products are made with high quality juices.
Hansen's(R)  non-carbonated  products  (other than its 100% juice  products) are
also made with natural flavors,  high fructose corn syrup, citric acid and other
ingredients.

         After offering a  ready-to-drink  green tea in a 20-ounce glass bottle,
the Company  introduced a full line of Specialty teas in 20-ounce glass bottles,
which it named  its  "Gold  Standard"  line.  This  line was  introduced  in the
20-ounce  glass  bottles that were being used by the Company at the time,  while
the  Company  proceeded  with  the  design  and  manufacture  of  a  new  unique
proprietary 20-ounce glass bottle for the line, which was introduced towards the
end of 1999.  During  2000,  the Company  introduced  two  additional  green tea
flavors, as well as two diet green flavors,  and six juice cocktails in 20-ounce
bottles.  All of the  products  in the  Gold  Standard  line  contain  different
combinations  of  supplements,  but  at  lower  levels  than  in  the  Company's
functional drinks.

         In the third quarter of 1999,  the Company  introduced two new lines of
children's multi-vitamin juice drinks in 8.45-ounce aseptic packages. Each drink
contains eleven  essential  vitamins and six essential  minerals.  Each line was
introduced in three flavors. The Company has since introduced additional flavors
and  intends to  continue  to  introduce  new  flavors in the place of  existing
flavors from time to time. One of these two lines is a  dual-branded  100% juice
line named  "Juice  Blast(TM)"  that was  launched  in  conjunction  with Costco
Wholesale Corporation  ("Costco") under the "Kirkland  Signature(TM)/Hansen's(R)
Natural" brand name and is sold nationally through Costco stores. The other line
was a 10%  juice  line  named  "Juice  Slam(TM)"  that was  available  to all of
Hansen's  customers.  During 2000, the Company  repositioned that line as a 100%
juice line under the Juice Slam(TM) name and is currently marketing that line to
grocery store chain customers, the health food trade, and other customers.

         In 2000,  the Company  introduced a new line of  nutritional  food bars
under the Hansen's(R)  brand name. This line is made from grains and fruit.  The
Company intends to introduce  additional  lines of nutritional food bars and, in
particular,  a line of functional  food bars,  during the first half of 2001 and
thereafter. In addition, the Company introduced a new line of premium G.M.O.
free (free from genetically  modified  organisms)  cereals under the Hansen's(R)
brand name.

         The Company is actively  engaged in the  development  of additional new
products,  including  new lines of soy based drinks and  sparkling  lemonades in
1-liter  proprietary  glass bottles,  which the Company plans to introduce later
this year.

         During the third quarter of 2000,  the Company  introduced a malt-based
drink under the name Hard e, which contains up to five-percent alcohol. The Hard
e product is not marketed under the Hansen's name.

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         Hansen's(R)  still water products were introduced in 1993.  Hansen's(R)
still water products are primarily sold in 0.5-liter plastic bottles to the food
service trade.

         The Company  continues to evaluate and, where  considered  appropriate,
introduce  additional  flavors and other types of  beverages to  complement  its
existing  product lines.  The Company will also evaluate,  and where  considered
appropriate,   introduce  functional  foods/snack  foods  that  utilize  similar
channels of  distribution  and/or are  complementary  to the Company's  existing
products and/or to which the Hansen's(R) brand name is able to add value.

Manufacture, Production and Distribution

         The  concentrates  for Hansen's(R)  Natural Sodas,  Signature Sodas and
Blue  Sky  Natural  Sodas  products  are  blended  at   independent   production
facilities.  In each case, the concentrate is delivered by independent  trucking
companies to Hansen's  various  co-packers,  each of which adds filtered  water,
high  fructose  corn  syrup or cane  sugar  or,  in the case of the diet  sodas,
Splenda(R)  brand  sweetener,  Acesulfame K, citric acid, and  carbonation  and,
where   appropriate,   supplements,   and  packages  the  products  in  approved
containers.  Hansen's most significant  co-packing arrangement is with Southwest
Canning and  Packaging,  Inc.  ("Southwest")  pursuant to a contract under which
Southwest  packages  Hansen's(R)  Natural  Sodas.  This  arrangement   continues
indefinitely and is subject to termination on 60 days written notice from either
party.

         The ingredients for the Company's fruit and grain nutritional food bars
are purchased by the Company's  co-packer for manufacturing and packaging of the
finished bars. The Company's cereal products are manufactured for the Company by
an overseas supplier who supplies all of the ingredients therefor.

         The  Company  purchases  juices,   concentrates,   flavors,   vitamins,
minerals,  nutrients,  herbs,  supplements  and other  ingredients for its juice
products,  ready-to-drink  iced tea, lemonade and juice cocktail products,  Gold
Standard  specialty tea and juice cocktail line, fruit juice Smoothie  products,
functional drinks,  Healthy Start juice line and children's  multi-vitamin juice
drinks  from  various  producers  and  manufacturers.  Such  materials  are then
delivered to the Company's various co-packers,  who add high fructose corn syrup
and water, for manufacture and packaging of the finished products.

         All of  the  Company's  beverage  products  are  co-packed  by  various
co-packers  situated  throughout  the United  States and Canada  under  separate
arrangements,  each of which continue on a month-to-month  basis, except for the
arrangement with Southwest which is described above.

         The Company has  concluded  arrangements  with certain  co-packers  and
suppliers in respect of equipment installed at the facilities of such co-packers
and suppliers for the specific purpose of facilitating the production of certain
of the Company's products.

         In the Western  states,  the Company's  Natural Sodas,  juice products,
iced tea, lemonade,  and juice cocktail products and Gold Standard Specialty tea
and juice  cocktail  line,  fruit  juice  Smoothie  products  in cans and P.E.T.
bottles, Healthy Start juice line in P.E.T. bottles and children's multi-vitamin
juice drinks are  primarily  sold to major  grocery chain stores and, in certain
instances, to mass merchandisers through food brokers; to club stores, specialty
chain stores and, in certain instances,  mass  merchandisers  directly by Hansen
and to the health food trade  through  specialty  health food  distributors.  In
Colorado,  a licensed  distributor  is  responsible  for sales of certain of the
above products.  The Company's  fruit juice Smoothie  products in glass bottles,
functional  drinks in 8.2-ounce  slim cans,  Signature  Sodas and Healthy  Start
juices in glass bottles are  distributed  almost  exclusively  by bottles and/or
distributors  that do not  distribute  other  products of the Company.  However,
commencing  in 2001,  Signature  Sodas and Healthy Start juices in glass bottles
may be sold to major grocery chain stores,  mass  merchandisers and club stores,
in certain states and/or counties  directly by Hansen's.  The  nutritional  food
bars and cereals will  primarily be sold to major  grocery  chain  stores,  club
stores, mass merchandisers,  and convenience chains through food brokers, and to

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specialty  chain  stores,  directly  by  Hansen's  and to the health  food trade
through specialty health food distributors.

         Management  has  secured  limited  additional  co-packing  arrangements
outside the West to enable the Company to produce certain of its products closer
to the markets where they are sold and thereby reduce freight costs.  As volumes
in  markets  outside   California  grow,  the  Company  will  secure  additional
co-packing arrangements to further reduce freight costs.

         The Company's  ability to estimate  demand is  imprecise,  particularly
with new  products,  and may be less  precise  during  periods of rapid  growth,
particularly in new markets. If the Company materially underestimates demand for
its  products or is unable to secure  sufficient  ingredients  or raw  materials
including but not limited to glass, cans or labels, or co-packing  arrangements,
it might not be able to satisfy demand on a short-term basis. See also "Item 7 -

MANAGEMENT'S  DISCUSSION  AND  ANALYISIS OF FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS."

         Although the Company's  arrangements for production of its products are
generally of short duration or are terminable upon request,  management believes
that  (subject  to  what  is  stated  herein)  a  short   disruption  would  not
significantly  affect  the  Company's  revenues  since  alternative   co-packing
facilities in the United States with adequate  capacity can be obtained for most
of its products at  commercially  reasonable  rates,  if necessary or desirable,
within a reasonably  short time period.  However,  there are limited  co-packing
facilities in the United States with adequate capacity for products in 8.2-ounce
slim cans. There are also limited shrink sleeve labeling facilities available in
the United States with adequate  capacity for the Company's  Signature Soda line
and Healthy  Start line in glass  bottles.  A disruption in production of any of
such  products  could  significantly  affect the  Company's  revenues  from such
products as alternative co-packing facilities in the United States with adequate
capacity  may not be  available  for such  products at  commercially  reasonable
rates,  if necessary or  desirable,  within a reasonably  short time period.  In
addition,  with regard to the Hard e product,  while  there are many  co-packing
facilities in the United  States with adequate  capacity that could produce such
product,  due to regulatory issues it may not be feasible for such product to be
co-packed at alternative co-packaging facilities on short notice. Consequently a
disruption in production  of such products  could affect the Company's  revenues
from such products. The Company is taking measures to secure the availability of
alternative  co-packing  facilities in the United States or Canada with adequate
capacity for the  production  of certain of its products to minimize the risk of
any disruption in production.

         The Company itself is primarily  responsible for marketing its products
(other than its fruit juice  Smoothies in glass  bottles,  functional  drinks in
8.2-ounce slim cans,  Signature Sodas, Healthy Start juices in glass bottles and
Medicine Man iced teas and drinks in glass  bottles) in the United  States.  The
Company has entered into distribution agreements with distributors to distribute
Smoothies in glass  bottles  and/or  functional  drinks in  8.2-ounce  slim cans
and/or Signature Sodas in more than 40 states. In many of such states,  however,
distribution is only on a limited scale.  Certain of the Company's  products are
also marketed in Canada, and on a more limited basis, in other countries outside
of the United States, including the United Kingdom, Mexico,  Philippines,  Guam,
the Caribbean,  and the United Arab Emirates.  During 2000, sales by the Company
to distributors outside the United States amounted to approximately $753,000.

         The Company  intends to  aggressively  expand the  distribution  of its
products into new markets, both within the United States and abroad.

         At the end of 2000, the Company introduced its new line of diet natural
sodas and is currently  introducing its new premium line of iced teas and drinks
in glass  bottles,  under the Medicine Man label.  Presentations  are  currently
being made to grocery  store chains to secure their  agreement to carry the diet
natural sodas and to the Company's existing  distributor  network to endeavor to
secure their agreement to distribute the Medicine Man line.

                                       8

<PAGE>

         The  Company  is   developing   a  separate   network  of  brokers  and
distributors to support the introduction, sale and distribution of the Company's
nutritional food bars and cereals to the health food trade, convenience and drug
store chains, grocery chain stores and mass merchandisers.

         The Company is  continuing  to expand  distribution  of its products by
seeking to enter into  agreements  with regional  bottlers or other direct store
delivery  distributors  having  established  sales,  marketing and  distribution
organizations.  Hansen's  licensed bottlers and distributors are affiliated with
and manufacture and/or distribute other soda and non-carbonated brands and other
beverage  products.  In many cases, such products are directly  competitive with
the Company's products. The Company's strategy of licensing regional bottlers to
produce Hansen's(R) Natural Sodas from concentrate  provided by the Company, did
not fulfill  management's  expectations,  partly because  bottlers  preferred to
focus on alternative beverage products having higher margins than sodas.

         During 2000, the Company expanded the distribution of its Natural Sodas
and  Smoothies in cans into Oregon and  Washington.  The Company plans to secure
additional distribution of its Natural Sodas and Smoothies in cans in Oregon and
Washington during 2001. In these states, the Company has retained responsibility
for securing  sales and providing  marketing  support.  To this end, the Company
appointed a regional sales manager for the northwestern states during 2000.

         In 2000,  the Company  continued to expand its national  sales force to
support and grow the sales primarily of functional drinks in 8.2-ounce slim cans
together  with  Smoothies in glass  bottles and  Signature  Sodas and intends to
continue to build such sales force during 2001.

         The Blue Sky(R)  Natural Soda products are sold primarily to the health
food trade through specialty health food distributors.

         The Hard e malt based drinks are  manufactured  for HEB by Reflo,  Inc.
("Reflo"),  pursuant to a manufacturing  and distribution  agreement dated as of
March 23,  2000  ("Reflo  Agreement")  which has a term of two years.  Under the
terms of the Reflo  agreement,  Reflo  administers the sales and distribution of
such products  throughout the United States,  excluding  California,  Nevada and
Oregon where HEB is itself  responsible  for the sales and  distribution of such
products. Reflo, Inc., acting on behalf of HEB and HEB itself, have entered into
distribution agreements with a number of independent  distributors to distribute
Hard e in more  than  twenty-six  states.  However,  in  many  of  such  states,
distribution is only now commencing and is on an extremely limited scale.

         Management  continues to evaluate  various  alternatives  to expand the
distribution of its products into selected new markets.

         The principal  warehouse and distribution  center and corporate offices
of the Company  relocated to the Company's current facility in October 2000. The
Company is in the process of  consolidating  its Ontario,  California  warehouse
space into its new facility and is taking steps to reduce its inventory  levels,
in an endeavor to lower its warehouse and distribution costs. See also "ITEM 2 -
PROPERTIES."

Source and Availability of Raw Materials

         The Company purchases  beverage  flavors,  concentrates and supplements
from independent  suppliers located in the United States and Mexico, juice, bars
and other  ingredients  from  independent  suppliers  in the  United  States and
abroad, and cereals from an independent supplier located abroad.

         Suppliers regard flavors as proprietary to them.  Consequently,  Hansen
does not currently  have the list of ingredients or formulae for its flavors and
certain of its concentrates  readily available to it and may be unable to obtain
these flavors or concentrates  from alternative  suppliers on short notice.  The
Company  has  identified  alternative  suppliers  of  many  of  the  supplements
contained in its carbonated  functional drinks,  Smoothies,  Healthy Start, Gold
Standard and  multi-vitamin  juice lines.  However,  industry-wide  shortages of

                                       9

<PAGE>
certain  supplements  have been and could,  from time to time in the future,  be
experienced,  which could  interfere with production of certain of the Company's
products.

         Management is continuing  with its attempts to develop  back-up sources
of supply for its flavors and  concentrates  from other  suppliers as well as to
conclude  arrangements  with suppliers which would enable it to obtain access to
certain  concentrate or product formulae in certain  circumstances.  The Company
has been partially successful in these endeavors.

         Hansen's  goal  is to  ensure  that  all  raw  materials  used  in  the
manufacture and packaging of the Company's  products,  including  natural sodas,
Signature  sodas,  functional  drinks  and  non-carbonated  drinks  and  juices,
including,  but not limited to,  concentrates  and juices,  high  fructose  corn
syrup,  cane sugar,  citric acid,  caps,  cans,  glass bottles,  P.E.T.  plastic
bottles,  aseptic  packaging and labels,  are readily available from two or more
sources and is  continuing  its efforts to achieve this goal,  although  each of
such raw  materials  are, in practice,  usually  obtained  from single  sources.
However,  the cans for the Company's  functional drinks are only manufactured by
one company in the United States.  Additionally,  the ability of HEB to have its
Hard  e  products  manufactured  and/or  distributed  by  other  parties  may be
restricted by HEB's  agreement with Reflo,  Inc.  and/or the necessity to obtain
certain regulatory approvals and licenses.

         In connection  with the  development  of new products and flavors,  the
Company works with independent suppliers who bear a large portion of the expense
of product development, thereby enabling the Company to develop new products and
flavors at  relatively  low cost.  The Company has  historically  developed  and
successfully  introduced new products and flavors and packaging for its products
and currently anticipates developing and introducing additional new beverage and
food products and flavors.

Competition

         The beverage  industry is highly  competitive.  The principal  areas of
competition are pricing, packaging,  development of new products and flavors and
marketing campaigns. The Company's products compete with traditional soft drinks
(cola and non-cola), and alternative beverages,  including new age beverages and
ready-to-drink  iced teas,  lemonades  and juice  cocktails and energy drinks as
well as juices and juice  drinks and  nectars  produced  by a  relatively  large
number of manufacturers,  most of which have substantially greater financial and
marketing resources than Hansen.

         The Company's  functional energy drink competes directly with Red Bull,
Red Devil,  Lipovitan,  MET-Rx, Hype, XTC, Adrenaline Rush, 180 and KMX and many
other  brands  and its other  functional  drinks  compete  directly  with  Elix,
Lipovitan,  MET-Rx,  Think,  Sobe Essentials and other brands.  The "functional"
beverage  category is in its infancy and increased  competition  is  anticipated
within a relatively  short period of time. A number of companies  who market and
distribute iced teas and juice cocktails in larger volume packages,  such as 16-
and 20-ounce glass bottles,  including Sobe, Snapple Elements and Arizona,  have
added,  or are in the process of adding,  supplements  to their  products with a
view  to  marketing  their  products  as  "functional"  beverages  or as  having
functional benefits. However, many of those products are believed to contain low
levels of supplements and principally deliver refreshment.  In addition, many of
the  competitive   products  are  positioned   differently  than  the  Company's
functional  drinks. The Company's  functional  Smoothies and Gold Standard lines
are positioned more closely against those products.

         For its Natural Sodas, Smoothies, functional drinks and Signature sodas
as well as other products, Hansen competes not only for consumer acceptance, but
also for maximum marketing efforts by multi-brand licensed bottlers, brokers and
distributors,  many  of  which  have  a  principal  affiliation  with  competing
companies  and  brands.   The  Company's   products   compete  with  all  liquid
refreshments and with products of much larger and substantially  better financed
competitors,  including the products of numerous  nationally and internationally
known producers such as The Coca Cola Company,  PepsiCo, Inc., Cadbury Schwepps,
which  includes Dr.  Pepper/Seven-up,  RC Cola,  Snapple,  Mistic and  Stewart's
brands,  Nestle Beverage Company,  The Quaker Oats Company and Ocean Spray. More

                                       10

<PAGE>
specifically,  the Company's products compete with other alternative  beverages,
including new age beverages, such as Snapple, Mistic, Arizona, Clearly Canadian,
Sobe, Stewart's,  Everfresh, Nantucket Nectars, Kerns Nectars, Mistic, VeryFine,
V8 Splash,  Calistoga,  Red Bull, MET-Rx,  Adrenaline Rush, 180, KMX and Crystal
Geyser brands.  Due to the rapid growth of the alternative  beverage  segment of
the beverage marketplace,  certain large companies such as The Coca Cola Company
and PepsiCo,  Inc. have introduced products in that market segment which compete
directly with the Company's products such as Nestea,  Fruitopia,  Lipton,  Ocean
Spray and Dole.  The  Company's  products also compete with private label brands
such as those carried by grocery store chains and club stores. Important factors
affecting Hansen's ability to compete  successfully  include taste and flavor of
products, trade and consumer promotion,  rapid and effective development of new,
unique,  cutting edge products,  attractive and different  packaging,  brand and
product  advertising and pricing.  Hansen must also compete for distributors who
will  concentrate  on marketing  the  Company's  products over those of Hansen's
competitors  provide stable and reliable  distribution and secure adequate shelf
space in retail outlets. Competitive pressures in the alternative and functional
beverage  categories could cause the Company's  products to lose market share or
experience price erosion, which could have a material adverse effect on Hansen's
business.

         The Company's fruit juice Smoothies  compete with Kern's nectars in the
Western states and Libby's in the Eastern states and Whipper Snapple, Mistic and
Nantucket Nectars  nationally and also with single serve juice products produced
by many competitors.  Such competitive products are packaged in glass and P.E.T.
bottles ranging from 8- to 20-ounces in size and in 11.5-ounce aluminum cans.
The juice content of such competitive products ranges from 1% to 100%.

         The Company's apple and other juice products compete directly with Tree
Top, Mott's, Martinelli's, Welsh's, Ocean Spray, Minute Maid, Langers, Wildland,
Apple and Eve,  Seneca,  Northland and also with other brands of apple juice and
juice blends, especially store brands. The Company's Healthy Start line competes
with Langer's, V8 Splash, Knudsen,  Nantucket Nectars,  Wildland and other juice
products.  The  Company's  still water  products  compete  directly  with Evian,
Crystal Geyser, Naya, Palomar Mountain, Sahara, Arrowhead, Aquafina, Dannon, and
other brands of still water especially store brands.

         The  nutritional  food bar and cereal  categories  as well as  flavored
malt-based  drink  categories are also highly  competitive.  Principal  areas of
competition are pricing,  packaging,  development of new product and flavors and
marketing  campaigns.  The Company's cereals compete with traditional cereals of
companies  such  as  Kellogg's,  General  Mills  and  Kashi  and  the  Company's
nutritional  food bars compete with products of other  independent bar companies
such as Power Bar, Balance Bar, Gatorade, Kashi, Cliff Bar, MET-Rx, and numerous
other bars. HEB's Hard e product  competes with wine coolers,  such as Seagram's
and Bartles and James and  flavored  low alcohol  beverages  such as Mike's Hard
Lemonade,  Hooper's  Hooch,  Doc Otis Hard Lemon,  Smirnoff Ice, Zima and Rick's
Spiked Lemonade and other flavored malt and alcohol based drinks.  Many of these
products are produced by large national and international manufacturers, most of
which  have  substantially   greater  financial  and  marketing  resources  than
Hansen's.  Such companies include Anhaeuser Busch,  Coors, Gallo Winery,  Diageo
plc, etc.

         Important  factors affecting  Hansen's ability to compete  successfully
include taste and flavor of products,  trade and consumer promotions,  rapid and
effective  development  of new,  unique  cutting edge  products,  attractive and
different  packaging,  branded  product  advertising  and  pricing.  Hansen also
competes  for  distributors  who will  concentrate  on marketing  the  Company's
products  over  those  of  Hansen's  competitors  provide  stable  and  reliable
distribution  and secure  adequate  shelf space in retail  outlets.  Competitive
pressures  in the  cereal,  nutritional  food  bar and  flavored  malt  beverage
categories  could cause the  Company's  products to be unable to gain or to lose
market share or experience  price erosion,  which could have a material  adverse
affect on Hansen's business.

                                       11

<PAGE>

Marketing

         Hansen's  marketing strategy is to focus on consumers who seek products
that are perceived to be natural and healthy.  To attract these  consumers,  the
Company  emphasizes the natural  ingredients  and the absence of  preservatives,
sodium,  artificial coloring and caffeine in the Company's beverages (other than
the Company's  functional  energy,  stamina(R) and power drinks which do contain
caffeine) and the addition to most of its products,  of one or more supplements.
This message is reinforced in the product  packaging,  the majority of which was
redesigned in 2000. The regular wholesale price of Hansen's(R)  Natural Sodas in
cans is slightly higher than mainstream soft drinks such as Coca-Cola and Pepsi,
although  generally lower than the prices of the products of many competitors in
the new age  category.  In its  marketing,  Hansen  emphasizes  its high quality
"natural"  image and the fact that its soda products  contain no  preservatives,
sodium,  caffeine or artificial  coloring.  The regular  wholesale  price of the
Company's iced teas, lemonades and juice cocktails,  including its Gold Standard
line, is comparable to or slightly lower than that of competitive non-carbonated
beverages marketed under the Snapple,  Sobe, Arizona,  Mistic,  Lipton,  Nestea,
Fruitopia,  Ocean Spray and Nantucket  Nectar brands.  In its marketing,  Hansen
emphasizes  the high  quality  natural and healthy  image of its  products.  The
regular  wholesale  price of the  Company's  fruit  juice  Smoothie  products is
similar to that of Kern's  nectars.  Without  abandoning its natural and healthy
image, the Company launched a lightly  carbonated energy drink in 8.2-ounce slim
cans, containing certain supplements,  to appeal to the young and active segment
of the beverage market that desires an energy boost from its beverage selection.
The Company has since launched five  additional  lightly  carbonated  functional
drinks, namely, stamina(R),  d-stress(R), anti-ox(R) (since renamed b-well(TM)),
power(TM) and  slim-down.  The  supplements  contained in each of the functional
drinks are intended to provide specific but different functional benefits to the
consumers of each of such products.  Hansen's marketing strategy with respect to
its  nutritional  food bars and cereals is similarly  to focus on consumers  who
seek bars and cereals that are  perceived to be natural and healthy.  To attract
these consumers,  the Company emphasizes the natural ingredients and the absence
of  preservatives  and,  in the  case of the  cereals,  the fact  that  they are
G.M.O.-free.  HEB's marketing  strategy with respect to its Hard e product is to
focus  on  adult  consumers  who  seek an  alcohol-based  beverage  that is good
tasting, fashionable and meets consumers' needs.

         To cater to consumers,  who purchase  juices in  multi-serve  sizes and
perceive the inclusion of supplements  therein to be of added value, the Company
launched  its Healthy  Start line of 100% juices in 1998.  Although  marketed in
larger multi-serve  packages that are appropriate for grocery store chains, club
stores,  specialty  chains and health  food  stores,  the  positioning  of these
products is similar to the Company's  lightly  carbonated  functional  drinks in
8.2-ounce  slim cans. To distinguish  these products from those of  competitors,
each label  indicates  the function of the  product,  in addition to listing the
supplements  contained therein.  As stated above,  following the conclusion of a
licensing  agreement by the Company with the Silver Foxes  Network,  the Company
had  the  labels  for  its  Silver   Foxes(TM)/Healthy  Start  100%  juice  line
redesigned.  The new renamed line,  which was targeted at the 50+ age group, was
relaunched during 2000.  However,  sales of this line were disappointing and the
Company is currently  reevaluating  this line. During the year, the Company also
introduced  its Healthy Start 100% line in single serve  12-ounce glass bottles,
through its distributor  network.  Sales of this line did not meet  expectations
and the  Company is in the process of  repositioning  the  distribution  of this
product  line.  In this  regard,  the  Company  plans to market  these  products
directly through its warehouse  division with focus on the health food trade and
specialty retail stores.

         According to Roche Vitamins, very few American children meet all of the
recommendations of the Food Guide Pyramid. In 1999, the Company introduced a new
line of children's  multi-vitamin  juice drinks in 8.45-ounce aseptic packaging.
These  products are  positioned  to assist  parents  improve the daily intake by
their children of essential vitamins and minerals.

         The Company's  sales and marketing  strategy is to focus its efforts on
developing  brand  awareness  and trial  through  sampling both in stores and at
events in respect to all its beverage, food and alcoholic beverage products. The
Company intends to continue to place increased  emphasis on product sampling and

                                       12

<PAGE>
participating in direct promotions.  The Company proposes to continue to use its
branded vehicles,  PT Cruisers and other promotional vehicles at events at which
the Company's products,  including its fruit juice smoothies,  natural sodas and
functional  energy drinks will be distributed to consumers for sampling.  Hansen
utilizes "push-pull" tactics to achieve maximum shelf and display space exposure
in sales outlets and maximum  demand from  consumers for its products  including
advertising,  in store promotions and point of sale materials, prize promotions,
price  promotions,  competitions,  endorsements  from selected  public  figures,
coupons, sampling and sponsorship of selected sports figures as well as sporting
events such as marathons,  10k runs, bicycle races,  volleyball  tournaments and
other health- and sports-related activities,  including extreme sports, and also
participates in product  demonstrations,  food tasting and other related events.
Posters,  print, radio and television advertising together with price promotions
and coupons are also used extensively to promote the Hansen's(R) brand.

         Management increased  expenditures for its sales and marketing programs
by approximately 18% in 2000 compared to 1999.

         While the Company retains responsibility for the marketing of the Juice
Slam(TM) line of children's  multi-vitamin  juice drinks,  Costco has undertaken
sole responsibility for the marketing of the co-branded Juice Blast(TM) line.

         The Company  intends to support its planned  expansion of  distribution
and sale of its functional  drinks in 8.2-ounce slim cans,  Smoothie products in
glass  bottles,  Signature  Sodas,  Healthy Start juices in glass  bottles,  and
Medicine  Man iced  teas and  drinks  in glass  bottles,  through  the  in-store
placement of point-of-sale  materials, use of glide racks, suction cup racks and
a  proprietary  rolling  rack  for its  functional  drinks,  co-operative  trade
marketing with customers and by attending and sponsoring  many sporting  events,
including  extreme sports and selected  sports figures and through  endorsements
from selected public and sports figures,  through focused radio campaigns and by
developing  local  marketing  programs in conjunction  with its  distributors in
their respective  markets.  By enlisting its distributors as participants in its
marketing and  advertising  programs,  Hansen  intends to create an  environment
conducive to the growth of both the Hansen's(R)  brand and the businesses of its
distributors.

         In January 1994,  the Company  entered into an agreement  with a barter
company  for the  exchange  of  certain  inventory  for future  advertising  and
marketing  credits.  The Company  assigned a value of $490,000 to these  credits
based on the net realizable value of the inventory exchanged. As of December 31,
2000, unused  advertising and marketing credits totaled $111,000.  Although such
credits remain available for use by the Company through January 2002, management
was unable to estimate  their  remaining  net  realizable  value at December 31,
1997.  Accordingly,  in the year ended  December  31,  1997,  the Company  fully
reserved against and expensed such advertising and marketing credits.

         Management  continues to believe that one of the keys to success in the
beverage  industry  is  differentiation;  making  Hansen's(R)  products  clearly
distinctive  from other beverages on the shelves of retailers.  Management is of
the view that the same keys to success  apply to its  nutritional  food bars and
cereals and Hard e products.  The Company  reviews its products and packaging on
an ongoing basis and, where practical,  endeavors to make them different, better
and unique.  The labels and graphics for the Company's juice  products,  Natural
Sodas and  Smoothie  products  were  redesigned  in an endeavor to develop a new
system to maximize  their  visibility and  identification,  wherever they may be
placed in stores.

Customers

         Retail  and  specialty  chains,  and  club  stores  represented  56% of
Hansen's  sales in the year ended  December  31,  2000 and 58% in the year ended
December 31, 1999,  while the percentage of sales to distributors  (primarily of
Hansens(R)  functional drinks in 8.2-ounce slim cans, Smoothies in glass bottles
and Signature  Sodas) in the year ended  December 31, 2000,  was 33%,  about the
same as in the previous year.

                                       13

<PAGE>

         Hansen's major customers in 2000 included Costco,  Trader Joe's,  Sam's
Club, Lucky, Vons, Ralph's, Wal-Mart and Albertson's. One customer accounted for
approximately  23%,  25% and 27% of the  Company's  sales  for the  years  ended
December 31, 2000, 1999 and 1998, respectively.  A decision by that or any other
major  customer to decrease  the amount  purchased  from the Company or to cease
carrying the  Company's  products  could have a material  adverse  effect on the
Company's financial condition and consolidated results of operations.

Seasonality

         Hansen normally  experiences greater sales and profitability during its
second and third fiscal quarters (April through  September).  The consumption of
beverage  products  fluctuates  in part  due to  temperature  changes  with  the
greatest  consumption  occurring  during the warm  months.  During  months where
temperatures  are  abnormally  warm  or  cold,   consumption  goes  up  or  down
accordingly.   Similarly,   consumption  is  affected  in  those  regions  where
temperature  and other  weather  conditions  undergo  dramatic  changes with the
seasons.  Management  anticipates  that the sale of the  Company's  products may
become increasingly subject to seasonal fluctuations as more sales occur outside
of California in areas where weather  conditions are  intemperate.  Sales of the
Company's juice products,  functional drinks and children's  multi-vitamin juice
drinks are likely to be less affected by such factors.  Similarly,  sales of the
Company's  nutritional  food bars and cereals are likely to be less  affected by
such factors. However, as the Company has not had experience with such products,
it is unable to predict the likely sales trend of such  products with any degree
of accuracy.

Trademark

         The Hansen's(R)  trademark is crucial to the Company's  business.  This
trademark is registered in the U.S.  Patent and Trademark  Office and in various
countries  throughout the world.  The Hansen's(R)  trademark is owned by a trust
(the "Trust") which was created by an agreement  between HBC and the predecessor
company of Fresh Juice Company of California ("FJC") (the "Agreement of Trust").
The Trust licensed to HBC in perpetuity on an exclusive world-wide  royalty-free
basis  the  right  to use the  Hansen's(R)  trademark  in  connection  with  the
manufacture,  sale and distribution of carbonated beverages and waters and shelf
stable fruit juices and drinks containing fruit juices.  In addition,  the Trust
licensed to HBC, in perpetuity,  on an exclusive  world-wide basis, the right to
use the  Hansen's(R)  trademark in  connection  with the  manufacture,  sale and
distribution of certain  non-carbonated  beverages and water in consideration of
royalty  payments.  A similar license agreement exists between the Trust and HBC
with regard to non-beverage products. No royalties are payable on sodas, juices,
lemonades, juice cocktails, fruit juice Smoothies, the Signature Soda line or on
the  children's  multi-vitamin  juice drinks.  Royalty  expenses of $12,000 were
incurred in 1999. As explained  below, no royalty  expenses were incurred during
2000.

         HBC,  FJC's  predecessor  and the  Trust  also  entered  into a Royalty
Sharing Agreement  pursuant to which royalties payable by third parties procured
by FJC or its predecessor or HBC are initially  shared between the Trust and HBC
and,  after a  specified  amount of  royalties  have been  received,  are shared
equally  between HBC and FJC.  Under the terms of the  Agreement  of Trust,  FJC
receives  royalty  income  paid to the Trust in excess of Trust  expenses  and a
reserve therefor.

         Effective  September  22,  1999,  HBC entered  into an  Assignment  and
Agreement  with FJC  pursuant to which HBC acquired  exclusive  ownership of the
Hansen's(R) trademark and trade names. Under the Assignment and Agreement, among
other matters,  HBC acquired all FJC's rights as grantor and  beneficiary of the
Trust, all FJC's rights as licensee under certain license agreement  pursuant to
which FJC has the right to manufacture, sell and distribute fresh juice products
under the  Hansen's(R)  trademark and all FJC's rights under the Royalty Sharing
Agreement  referred to above, as well as certain  additional rights, for a total
consideration  of  $775,010,  payable  over three  years.  FJC is  permitted  to
continue to  manufacture,  sell and  distribute  fresh juice  products under the
Hansen's(R) trademark for a period of five years. Consequently, HBC now has full
ownership of the  Hansen's(R)  trademark and its obligation to pay royalties to,

                                       14

<PAGE>
and to share royalties with, FJC has been terminated. As of December 31, 2000, a
balance of $287,500 was payable to FJC.

         The  Company  has  applied to  register a number of  trademarks  in the
United States including, but not limited to, THE REAL DEAL(TM), IMMUNEJUICE(TM),
Hansen's energy(TM),  Hansen's power(TM),  Hansen's Natural  Multi-Vitamin Juice
Slam(TM), Defense(TM),  Powerpack(TM), Medicine Man(TM), b-well(TM), Hard e(TM),
Hard Energy(TM), and A New Kind a Buzz(TM).

         The Company owns in its own right,  a number of  trademarks  including,
but not  limited  to,  LIQUIDFRUIT(R),  Imported  from  Nature(R),  California's
Natural   Choice(R),   California's   Choice(R),   Dyna  Juice(R),   Equator(R),
be-well(R), anti-ox(R),  d-stress(R),  stamina(R), Aqua Blast(R), Antioxjuice(R)
Intellijuice(R)  and Juice Blast(R) in the United States and the Hansen's(R) and
"Smoothie(R)" trademarks in a number of countries around the world.

         In September  2000, in connection  with the acquisition of the Blue Sky
Natural Beverage business, the Company, through its wholly owned subsidiary Blue
Sky,  acquired  the Blue Sky(R)  trademark,  which is  registered  in the United
States and Canada.

         On April 4, 2000, the United States Patent and Trademark  Office issued
a patent to the Company for an invention  related to a shelf structure  (rolling
rack) and, more particularly, a shelf structure for a walk-in cooler. Such shelf
structure  is  utilized  by  the  Company  to  secure  shelf  space  for  and to
merchandise its functional  drinks in 8.2-ounce slim cans in  refrigerated  Visi
coolers and walk-in coolers in retail stores.

Government Regulation

         The  production and marketing of beverages are subject to the rules and
regulations  of the United States Food and Drug  Administration  (the "FDA") and
other  federal,  state and local health  agencies.  The FDA also  regulates  the
labeling of containers  including,  without  limitation,  statements  concerning
product ingredients.

         In connection  with Hard e, the  production  and marketing of alcoholic
beverages  are  subject to the rules and  regulations  of the Bureau of Alcohol,
Tobacco  and  Firearms  and in each  state,  are also  subject  to the rules and
regulations of state  regulatory  agencies.  The Bureau of Alcohol,  Tobacco and
Firearms and state regulatory  agencies also regulate the labeling of containers
containing  alcoholic  beverages  including,   without  limitation,   statements
concerning product name and ingredients as well as advertising and marketing, in
connection therewith.

Employees

         As of March 2, 2001,  Hansen employed a total of 107 employees,  100 of
whom are  employed  on a full-time  basis.  Of Hansen's  107  employees,  34 are
employed in administrative and quality control capacities and 73 are employed in
sales and marketing capacities.

Compliance with Environmental Laws

         The  operation  of  Hansen's  business  is not  materially  affected by
compliance with federal,  state or local environmental laws and regulations.  In
California,  Hansen's is required to collect  deposits from its customers and to
remit such deposits to the State of California  Department of Conservation based
upon  the  number  of  cans  and  bottles  of  certain  of  its  carbonated  and
non-carbonated products sold. In certain other states and Canada where Hansen(R)
products are sold,  the Company is also  required to collect  deposits  from its
customers and to remit such  deposits to the  respective  conservation  agencies
based upon the number of cans and  bottles  of  certain  of its  carbonated  and
non-carbonated products, sold in such states.

                                       15

<PAGE>


I
TEM 2.  PROPERTIES

         Hansen's  corporate  offices and main warehouse are located in a single
building at 1010 Railroad Street,  Corona,  California  92882.  This facility is
leased by HBC for a period of ten years  commencing  October 20, 2000. The gross
area of the facility is  approximately  113,600  square feet. The monthly rental
payments,  according to the terms of the lease,  are subject to increase  during
the third, sixth and eighth years. HBC also utilizes public warehouses  situated
throughout the United States and Canada.


ITEM 3.  LEGAL PROCEEDINGS

         Towards the end of 1998,  HBC,  together with the Trustee of the Hansen
Trust,  commenced  arbitration   proceedings  before  the  American  Arbitration
Association in Los Angeles, California,  against FJC, the former Trustees of the
Trust, and a company called Hansen's Juice Creations LLC ("Creations"), in which
HBC and the Trustee claimed,  among other matters:  (i) that certain acts of the
former Trustees of the Trust constituted breach of trust; (ii) a certain license
agreement  purportedly entered into between the former Trustees of the Trust and
Creations  (the  "Purported  Agreement")  was,  in  whole  or in  part,  void or
terminable  by the  Trust;  and  (iii)  certain  acts of  Creations  constituted
infringement  of the  Hansen's(R)  trademark and certain acts of FJC constituted
contributory  infringement  of the Hansen's(R)  trademarks.  HBC and the Trustee
sought damages and injunctive relief against FJC and Creations. Such proceedings
were settled in September 1999. Pursuant to written settlement  agreements among
the various parties to such proceedings,  the Purported Agreement was terminated
by  mutual  consent,  the  right  of the  successor  to  Creations  to  use  the
Hansen's(R) trademark on limited, but clearly defined, fresh juice products, was
clarified and agreed upon, and certain other matters  relating to and concerning
the use of the Hansen's(R) trademark, were resolved.

         During 2000,  the Company  commenced  arbitration  proceedings  against
Sammy Sosa before the American Arbitration Association in Orange County, for the
repayment  by Mr. Sosa to the  Company of the sum of $175,000  which was paid to
Mr. Sosa, by virtue of Mr. Sosa's failure to perform his obligations in terms of
his agreement  with the Company.  Mr. Sosa has filed a counter claim against the
Company seeking damages  approximating  $2.8 million.  The Company believes that
Mr.  Sosa's  counter-claim  has no  factual  or legal  basis  whatsoever  and is
completely unmeritorious. A hearing has not yet taken place in the arbitration.

         Late in 2000, Rhonda Morris filed a complaint in the Superior Court for
the State of California,  County of San Francisco against the Company,  in which
she claims sexual harassment by an employee of the Company in connection with an
alleged denial of employment to her and in which she seeks unspecified  monetary
damages.  The Company has removed the  complaint to the United  States  District
Court for the Northern District of California. The Company believes the claim is
without merit and is defending the claim.

         In March 2001,  the Company  filed a complaint in Federal Court for the
Central  District  of  California  against  South  Beach  Beverage  Company  LLC
("Sobe"),  for  patent  infringement,   violation  of  trademark  rights,  false
advertising, unfair competition,  trespass to chattels and tortious interference
with business  relations  arising from Sobe's unlawful  conduct and unauthorized
use of the  Company's  property and the patent held by the Company in respect of
its  rolling  rack  shelf  structure,   Sobe's  improper   business   practices,
interference with the Company's right to conduct its business, injunctive relief
and unspecified monetary damages.

         The Company is subject to, and  involved in,  claims and  contingencies
related to lawsuits,  arbitration proceedings,  and other matters arising out of
the normal  course of business.  The  ultimate  liability  associated  with such
claims and contingencies, including those mentioned above, is not likely to have
a material adverse effect on the financial condition of the Company.

                                       16

<PAGE>

         Except  as  described  above,  there  are  no  material  pending  legal
proceedings  to which the  Company or any of its  subsidiaries  is a party or to
which  any of the  properties  is  subject,  other  than  ordinary  and  routine
litigation incidental to the Company's business.




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

         The annual meeting of  stockholders of the Company was held on November
3, 2000. At the meeting, the following  individuals were elected as directors of
the Company  and  received  the number of votes set  opposite  their  respective
names:

                                                                 Votes For

                 Rodney C. Sacks                                 8,514,511
                 Hilton H. Schlosberg                            8,514,611
                 Benjamin M. Polk                                8,514,611
                 Norman C. Epstein                               8,514,461
                 Harold C. Taber, Jr.                            8,514,611
                 Mark S. Vidergauz                               8,514,611

         In addition,  at the meeting the  stockholders of the Company  ratified
the appointment of Deloitte & Touche LLP as independent  auditors of the Company
for the year ended  December 31, 2000, by a vote of 8,510,325 for, 4,555 against
and 10,782 abstaining.


PART II


ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
                  SHAREHOLDER MATTERS

Principal Market

         The Company's Common Stock began trading in the over-the-counter market
on  November  8, 1990 and is quoted on the  NASDAQ  Small-Cap  Market  under the
symbol  "HANS".  As of  March 2,  2001,  there  were  10,045,003  shares  of the
Company's Common Stock outstanding held by approximately 659 holders of record.


                                       17

<PAGE>


Stock Price and Dividend Information

         The following table sets forth high and low bid closing  quotations for
the Common Stock,on a quarterly basis from January 1, 1998 to December 31, 2000:

                                  Common Stock

                                        High Bid                   Low Bid
  Year Ended December 31, 2000
  First Quarter                         $  4 5/8                     $  4
  Second Quarter                        $  4 1/2                     $  3 13/32
  Third Quarter                         $  5 29/32                   $  4 1/8
  Fourth Quarter                        $  5 3/8                     $  3 1/4

  Year Ended December 31, 1999
  First Quarter                         $  5 5/8                     $  3 7/16
  Second Quarter                        $  5 1/2                     $  3 5/8
  Third Quarter                         $  5 5/8                     $  4 5/16
  Fourth Quarter                        $  5 1/8                     $  3 7/8

  Year Ended December 31, 1998
  First Quarter                         $  2 9/16                    $  1 15/32
  Second Quarter                        $  4 3/4                     $  2 3/8
  Third Quarter                         $  6 13/16                   $  3 3/4
  Fourth Quarter                        $  6 17/32                   $  2 15/16


         The  quotations  for the Common  Stock set forth  above  represent  bid
quotations  between  dealers,  do not  include  retail  markups,  mark-downs  or
commissions and bid quotations may not necessarily represent actual transactions
and "real time" sale  prices.  The source of the bid  information  is the NASDAQ
Stock Market, Inc.

         Hansen has not paid dividends to its  stockholders  since its inception
and does not anticipate paying dividends in the foreseeable future.


ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

         The  consolidated  statements of  operations  data set forth below with
respect  to each of the years  ended  December  31,  1996  through  2000 and the
balance sheet data as of December 31, for the years indicated,  are derived from
the  consolidated  financial  statements  audited  by  Deloitte  &  Touche  LLP,
independent certified public accountants, and should be read in conjunction with
those financial  statements and notes thereto included  elsewhere in this and in
the 1996, 1997, 1998 and 1999 Forms 10-K.

                                       18

<PAGE>

(in thousands, except per
share information)

<TABLE>
<S>                         <C>              <C>               <C>              <C>               <C>

                            2000                1999              1998             1997              1996
--------------------------- ---------------- ----------------- ---------------- ----------------- -----------------                 
Net sales                   $ 79,733         $ 72,303           $ 53,866         $ 43,057           $  35,565

Net income                  $  3,915         $  4,478           $  3,563         $  1,250           $     357

Net income per
common share
  Basic                     $   0.39         $   0.45           $   0.38         $   0.14           $    0.04
  Diluted                   $   0.38         $   0.43           $   0.34         $   0.13           $    0.04


Total assets                $ 38,745         $ 28,709           $ 22,557         $ 16,933           $  16,109

Long-term debt              $  9,732         $    903           $  1,335         $  3,408           $     -
</TABLE>




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

General

         During 2000, the Company continued to expand its existing product lines
and further develop its markets.  In particular,  the Company continues to focus
on developing and marketing  beverages  that fall within the category  generally
described as the "functional" beverage category.

         The Company  achieved  record  sales in 2000.  The increase in sales in
2000  was  primarily  attributable  to the  growth  in  sales  of the  Company's
functional  drinks in 8.2-ounce  slim cans,  as well as  increased  sales of the
children's  multi-vitamin  juice  drinks in  8.45-ounce  aseptic  packaging  and
increased  sales of apple juice and  natural  sodas as well as sales of Blue Sky
Natural Sodas since the  acquisition by the Company of that brand.  The increase
in sales was partially  offset by decreased sales of Smoothies and the Company's
Silver Foxes juice line as well as lower sales of iced teas, lemonades and juice
cocktails and  Signature  Sodas.  Despite such changes in the Company's  product
mix, the gross profit percentage  achieved by the Company in 2000 was marginally
higher than the gross profit percentage achieved in 1999.

         During  2000,  sales  outside  of  California  represented  37%  of the
aggregate  sales  of  the  Company,  as  compared  to  approximately  39% of the
aggregate sales of the Company in 1999. Sales to distributors outside the United
States during 2000 amounted to $753,000 compared to $800,000 in 1999.

         During 2000, the Company  introduced  slim-down,  its sixth  functional
drink in 8.2-ounce  slim-cans.  slim-down is a berry-flavored  drink that has no
calories.  During the year,  the  Company  introduced  two  additional  Smoothie
flavors in 11.5-ounce.  cans:  Whipped Orange and Cranberry  Twist.  The Company
also  extended its Smoothie  line in 64-ounce  P.E.T.  plastic  bottles from two
flavors to six flavors. In the first quarter of 2000, the Company introduced its
Healthy Start 100% juice line in single serve glass  bottles,  which it marketed
through its distributor network.  However, response from customers and consumers
was disappointing and in consequence the Company has decided to market that line
through its warehouse  division to selected  retail  outlets where such products
may have greater appeal.  The Company also  introduced two additional  Green Tea
flavors as well at two diet Green Tea  flavors  and six juice  cocktails  in the
same 20-ounce glass bottle as its "Gold  Standard" Green Tea and Specialty Teas.
Each of the products in the "Gold Standard" line contain different  combinations
of supplements.

                                       19

<PAGE>

         The Company also entered the  functional  foods market in 2000 with the
introduction  of a line of fruit and grain  nutritional  food bars and commenced
test marketing a line of G.M.O.-free  gourmet  cereals.  The Company  intends to
expand its  nutritional  food bar business with the  introduction  of functional
food bars in 2001 as well as additional nutritional food bars later in 2001.

         During  2000,  the Company  entered into a license  agreement  with the
Silver Foxes  Network for the  licensing to the Company of the Silver  Foxes(TM)
brand and trademark, which is positioned towards consumers in the 50+ age group,
for and in  connection  with  certain of the  Company's  products.  The  Company
determined to use that  trademark  for and in connection  with its Healthy Start
100% juice  line.  The  Company  had the labels for its Health  Start juice line
redesigned  under the Silver Foxes brand and  trademark and  relaunched  the new
re-named  line during the year.  However,  sales of the  Company's  Silver Foxes
juice line were  disappointing  and the Company is currently  reevaluating  this
line.

         Sales of the  Company's  dual-branded  100%  juice  line  named  "Juice
Blast(R)",  which was launched in  conjunction  with Costco under the  "Kirkland
Signature(TM)/Hansen's(R)  Natural"  brand name and is sold  nationally  through
Costco stores,  were satisfactory.  The Company has, in conjunction with Costco,
introduced  new  flavors in place of certain of the  existing  flavors  and will
continue to  introduce  new flavors in an effort to ensure that its variety pack
remains fresh and different for consumers.

         During 2000, the Company repositioned its Juice Slam(TM) line as a 100%
juice  line.  The  Company is  currently  marketing  this line to grocery  store
chains,  specialty  chains,  the health food trade and other customers  directly
through its warehouse division.

         On September 20, 2000 the Company,  through its wholly owned subsidiary
Blue Sky, acquired the Blue Sky Natural Soda business. The Blue Sky Natural Soda
brand is the leading  natural  soda in the health  food  trade.  Blue Sky offers
natural sodas,  premium natural sodas with added ingredients such as Ginseng and
anti-oxidant vitamins, organic sodas and seltzers in 12-ounce cans.

         The Company is currently  launching a new premium line of iced teas and
drinks with a unique theme under the Medicine Man label,  in  proprietary  glass
bottles. This line will initially be introduced in four flavors.

         At the end of 2000,  the  Company  launched a new line of diet sodas in
four flavors:  Peach, Black Cherry,  Kiwi-Strawberry,  and Tangerine Lime. These
products are sweetened with Splenda(R)  brand sweetener and Acesulfame K and are
aspartame free.  Initial response from both customers and consumers to this line
has been extremely encouraging.

         During  2000,  the  Company  entered  into  several  new   distribution
agreements  for the sale of its  products,  both  within and  outside the United
States.  As  discussed  under  "ITEM 1 BUSINESS -  MANUFACTURE,  PRODUCTION  and
DISTRIBUTION",  it is  anticipated  that the Company will continue  building its
national sales force in 2001 to support and grow the sales of its products.

         Further, during 2000, the Company, through its wholly owned subsidiary,
HEB,  introduced a malt-based  beverage  called Hard e, which  contains up to 5%
alcohol. The Hard e product will not be marketed under the Hansen's name.

         The Company is actively  engaged in the  development  of additional new
products,  including new lines of soy-based  drinks and  sparkling  lemonades in
1-liter proprietary glass bottles.

         The Company  continues to incur  expenditures  in  connection  with the
development and introduction of new products and flavors.

                                       20

<PAGE>

Results of Operations  for the Year Ended December 31, 2000 Compared to the Year
Ended December 31, 1999

         Net Sales.  For the year ended  December 31, 2000, net sales were $79.7
million,  an increase of $7.4 million or 10.3% over the $72.3  million net sales
for the year ended  December 31, 1999.  The increase in net sales was  primarily
attributable  to increased  sales of the Company's  energy and other  functional
drinks  in  8.2-ounce  slim  cans  and  increased  sales  of the  Company's  new
children's  multi-vitamin  juice drinks. To a lesser extent, the increase in net
sales was also  attributable to increased sales of apple juice and Natural Sodas
and sales of Healthy  Start in glass  bottles as well as Blue Sky Natural  Sodas
since the  acquisition  by the  Company of that  brand in  September  2000.  The
increase in net sales was  partially  offset by decreases in sales of the Silver
Foxes juice line, Smoothies in cans, glass and P.E.T.  bottles,  Signature Sodas
and iced teas, lemonades and juice cocktails.

         Gross  Profit.  Gross  profit  was  $37.1  million  for the year  ended
December 31, 2000,  an increase of $3.6 million or 10.6% over the $33.5  million
gross profit for the year ended December 31, 1999.  Gross profit as a percentage
of net sales increased  marginally to 46.5% for the year ended December 31, 2000
from 46.4% for the year ended  December 31,  1999.  The increase in gross profit
was primarily  attributable to increased net sales. The increase in gross profit
as a  percentage  of net sales is  primarily  attributable  to  slightly  higher
margins achieved as a result of a change in the Company's product mix.

         Total Operating  Expenses.  Total operating expenses were $30.2 million
for the year ended  December 31, 2000, an increase of $4.2 million or 16.0% over
total operating  expenses of $26.0 million for the year ended December 31, 1999.
Total operating expenses as a percentage of net sales increased to 37.9% for the
year ended  December 31, 2000,  from 36.0% for the year ended December 31, 1999.
The increase in total operating expenses was primarily attributable to increased
selling,  general and  administrative  expenses  and was  partially  offset by a
decrease in other operating  expenses.  The increase in total operating expenses
as a percentage of net sales was primarily  attributable  to the increase in net
sales  and  the   comparatively   larger   increase  in  selling,   general  and
administrative expenses.

         Selling, general and administrative expenses were $29.8 million for the
year ended  December 31, 2000 an increase of $4.5 million or 17.7% over selling,
general and administrative expenses of $25.3 million for the year ended December
31, 1999.  Selling,  general and administrative  expenses as a percentage of net
sales increased to 37.4% for the year ended December 31, 2000 from 35.0% for the
year ended December 31, 1999.  Selling  expenses were $20.8 million for the year
ended  December  31,  2000,  an increase of $3.0  million or 16.7% over  selling
expenses of $17.8 million for the year ended December 31, 1999. Selling expenses
as a percentage of net sales  increased to 26.0% for the year ended December 31,
2000 from 24.6% for the year ended  December 31,  1999.  The increase in selling
expenses  was  primarily  attributable  to increased  promotional  expenditures,
distribution (freight) expenses, expenditures for merchandise displays and point
of sale  materials,  as well as fees paid for slotting.  The increase in selling
expenses  was  partially  offset by a  decrease  in  expenditures  for  in-store
demonstrations.  General and  administrative  expenses were $9.0 million for the
year ended  December 31, 2000, an increase of $1.5 million or 19.9% over general
and  administrative  expenses of $7.5  million for the year ended  December  31,
1999. General and administrative expenses as a percentage of net sales increased
to 11.4% for the year  ended  December  31,  2000 from  10.4% for the year ended
December  31,  1999.  The  increase in general and  administrative  expenses was
primarily  attributable  to increased  payroll costs and certain other  expenses
incurred in connection with product  development  and expansion  activities into
additional states.

         Amortization  of trademark  license and trademarks was $371,000 for the
year ended  December  31,  2000,  an increase of $63,000  over  amortization  of
trademark  license and  trademarks  of $308,000 for the year ended  December 31,
1999.  The increase in  amortization  of trademark  license and  trademarks  was
primarily  attributable to the acquisition of the Blue Sky trademark,  which was
acquired during 2000 and is being amortized over a period of 40 years.

         No other  operating  expenses were incurred for the year ended December
31, 2000 as compared with $380,000 in other operating  expenses incurred for the

                                       21

<PAGE>
year ended December 31, 1999.  Other  operating  expenses  incurred in 1999 were
primarily  attributable  to  expenses  incurred  in  connection  with a proposed
business combination that was not completed.

         Operating Income.  Operating income was $6.9 million for the year ended
December  31,  2000,  compared to $7.5  million for the year ended  December 31,
1999. The $601,000  decrease in operating  income was primarily  attributable to
increased  operating  expenses,  which was partially  offset by increased  gross
profit.

         Net Non-operating  Expense. Net non-operating  expense was $369,000 for
the  year  ended  December  31,  2000,   which  was  $317,000  higher  than  net
non-operating  expense of $52,000  for the year ended  December  31,  1999.  Net
non-operating  expense  consists of interest and financing  expense and interest
income. Interest and financing expense for the year ended December 31, 2000, was
$382,000 as  compared to $171,000  for the year ended  December  31,  1999.  The
increase in interest and  financing  expense was primarily  attributable  to the
increase in long-term debt, primarily related to the acquisition of the Blue Sky
business.  See also "Liquidity and Capital Resources" below. Interest income for
the year ended December 31, 2000 was $13,000,  as compared to interest income of
$118,000 for the year ended December 31, 1999.  The decrease in interest  income
was primarily  attributable  to a reduction in the cash available for investment
during the year ended December 31, 2000.

         Provision  for Income  Taxes.  Provision  for income taxes for the year
ended  December 31, 2000 was $2.6  million as compared to  provision  for income
taxes of $3.0  million  for the year ended  December  31,  1999.  The  effective
combined  federal and state tax rate for 2000 was 40.1% as compared to 39.9% for
1999. The decrease in the provision for income taxes was primarily  attributable
to decreased operating income.

         Net Income. Net income was $3.9 million for the year ended December 31,
2000,  compared  to $4.5  million  for the year ended  December  31,  1999.  The
$563,000  decrease in net income was attributable to decreased  operating income
of $601,000 and increased non-operating expense of $317,000, which was partially
offset by decreased provision for income taxes of $355,000.

Results of Operations  for the Year Ended December 31, 1999 Compared to the Year
Ended December 31, 1998

         Net Sales.  For the year ended  December 31, 1999, net sales were $72.3
million,  an increase of $18.4 million or 34.2% over the $53.9 million net sales
for the year ended  December 31, 1998.  The increase in net sales was  primarily
attributable  to increased  sales of the Company's  energy and other  functional
drinks in 8.2-ounce slim cans, the  introduction of the Company's new children's
multi-vitamin  juice  drinks  in the  third  quarter  of  1999,  as  well as the
Company's  Signature  Soda line,  which was  introduced  in the first quarter of
1999,  increased sales of the Company's  Healthy Start product line and sales of
Smoothies in 64-ounce P.E.T.  bottles.  To a lesser extent,  the increase in net
sales was also  attributable  to increased  sales of juice blends,  Smoothies in
cans,  apple  juice,  soda in cans  and  sales of Super  Smoothies,  which  were
introduced  in the second half of 1999.  Net sales of iced teas,  lemonades  and
juice  cocktails in 1999 were  comparable to the sales of such products in 1998.
The  increase  in net  sales  was  partially  offset  by the  discontinuance  of
Equator(R) and other marginal products.

         Gross  Profit.  Gross  profit  was  $33.5  million  for the year  ended
December 31, 1999;  an increase of $7.0 million or 26.4% over the $26.5  million
gross profit for the year ended December 31, 1998.  Gross profit as a percentage
of net sales  decreased to 46.4% for the year ended December 31, 1999 from 49.3%
for the year ended December 31, 1998. The increase in gross profit was primarily
attributable  to  increased  net  sales.  The  decrease  in  gross  profit  as a
percentage of net sales are primarily  attributable to lower margins achieved as
a result of a change in the Company's product mix.

         Total Operating  Expenses.  Total operating expenses were $26.0 million
for the year ended  December  31, 1999 an increase of $5.4 million or 26.5% over
total operating  expenses of $20.6 million for the year ended December 31, 1998.
Total operating expenses as a percentage of net sales decreased to 36.0% for the

                                       22

<PAGE>
year ended  December 31, 1999,  from 38.2% for the year ended December 31, 1998.
The increase in total operating expenses was primarily attributable to increased
selling,  general and administrative  expenses and other operating expenses. The
decrease in total operating  expenses as a percentage of net sales was primarily
attributable to the increase in net sales and the comparatively smaller increase
in selling, general and administrative expenses.

         Selling, general and administrative expenses were $25.3 million for the
year ended  December  31, 1999 an increase of $5.1  million or 25.3% higher than
selling, general and administrative expenses of $20.2 million for the year ended
December 31, 1998. Selling,  general and administrative expenses as a percentage
of net sales  decreased to 35.0% for the year ended December 31, 1999 from 37.5%
for the year ended  December 31, 1998.  Selling  expenses were $17.8 million for
the year ended  December  31, 1999 an increase of $3.7  million or 26.2%  higher
than  selling  expenses of $14.1  million for the year ended  December 31, 1998.
Selling  expenses as a percentage  of net sales  decreased to 24.6% for the year
ended  December 31, 1999 from 26.2% for the year ended  December  31, 1998.  The
increase  in  selling   expenses  was   primarily   attributable   to  increased
distribution (freight) expenses, advertising costs and promotional expenditures,
particularly  in-store  demonstrations  and coupon  expenses.  The  increase  in
selling  expenses  was  partially  offset  by a  decrease  in  expenditures  for
merchandise  displays and point of sale  materials.  General and  administrative
expenses were $7.5 million for the year ended  December 31, 1999; an increase of
$1.4  million or 23.4% higher than  general and  administrative  expense of $6.1
million  for the year  ended  December  31,  1998.  General  and  administrative
expenses  as a  percentage  of net sales  decreased  to 10.4% for the year ended
December 31, 1999, from 11.4% for the year ended December 31, 1998. The increase
in general and administrative  expenses was primarily  attributable to increased
payroll  costs and  certain  other  expenses  incurred  in  connection  with the
Company's product development and expansion activities into additional states.

         Amortization  of trademark  license and trademarks was $308,000 for the
year ended  December  31,  1999,  an increase of $12,000  over  amortization  of
trademark  license and  trademarks  of $296,000 for the year ended  December 31,
1998.

         Other operating  expenses were $380,000 for the year ended December 31,
1999, an increase of $320,000 over other  operating  expenses of $60,000 for the
year ended  December 31,  1998.  The  increase in other  operating  expenses was
primarily  attributable  to  expenses  incurred  in  connection  with a proposed
business combination that was not completed.  The increase in other expenses was
partially offset by the expiration of a consulting  agreement with a director of
the Company.

         Operating Income.  Operating income was $7.5 million for the year ended
December  31,  1999,  compared to $6.0  million for the year ended  December 31,
1998. The $1.5 million increase in operating  income was primarily  attributable
to increased gross profits,  which was partially  offset by increased  operating
expenses.

         Net Non-operating  Expense.  Net non-operating  expense was $52,000 for
the  year  ended   December  31,  1999,   which  was  $278,000  lower  than  net
non-operating  expense of $330,000 for the year ended  December  31,  1998.  Net
non-operating expense consists of interest and financing expense interest income
and for 1998, other  non-operating  expense.  Interest and financing expense for
the year ended  December  31, 1999 was  $171,000 as compared to $387,000 for the
year ended December 31, 1998. The decrease in interest and financing expense was
attributable  to a reduction in financing fees that were fully amortized in 1998
and to the fact that the principal  amounts  outstanding  on the Company's  term
loan were lower in 1999 than 1998. See also  "Liquidity  and Capital  Resources"
below. Interest income for the year ended December 31, 1999 was $118,000,  which
was $46,000  higher than interest  income of $72,000 for the year ended December
31, 1998. The increase in interest income was primarily attributable to interest
earned on excess cash invested.

         Provision  for Income  Taxes.  Provision  for income taxes for the year
ended  December 31, 1999 was $3.0  million as compared to  provision  for income
taxes of $2.1  million  for the year ended  December  31,  1998.  The  effective
combined federal income taxes were primarily attributable to increased operating

                                       23

<PAGE>
income  and the  increase  in the  effective  tax rate  for  1999.  Certain  net
operating  loss carry forwards  resulted in a lower  effective tax rate in 1998.
Such net operating loss carry forwards were not available in 1999.

         Net Income. Net income was $4.5 million for the year ended December 31,
1999,  compared  to $3.6  million  for the year ended  December  31,  1998.  The
$915,000  increase in net income was attributable to increased  operating income
of $1.5  million and  decreased  non-operating  expense of  $278,000,  which was
offset by increased provision for income taxes of $904,000.

Liquidity and Capital Resources

         As of December 31, 2000, the Company had working capital of $13,644,000
compared to working  capital of $8,997,000 as of December 31, 1999. The increase
in  working  capital  was  primarily  attributable  to net income  earned  after
adjustments for certain non-cash expenses,  primarily  amortization of trademark
license and trademarks,  depreciation and other  amortization,  and compensation
expense  related to the  issuance  of stock  options.  The  increase  in working
capital was partially  offset by increases in trademark  license and trademarks,
property and, to a lesser extent, increases in deposits and other assets.

         During 2000, the Company's cash reserves were used for working  capital
including  the  acquisition  of the Blue Sky  business,  trademark  licenses and
trademarks,   increases  in  accounts  receivable,  purchases  of  property  and
equipment,  acquisition of increased inventories and to reduce accounts payable.
The  acquisition  of increased  inventories,  increases in accounts  receivable,
increases in deposits and other assets,  acquisition  of property and equipment,
acquisition of trademark licenses and trademarks, and repayment of the Company's
line of credit, are expected to remain the Company's  principal recurring use of
cash and working capital funds.

         Net cash used in investing  activities  for the year ended December 31,
2000, was $7.9 million as compared to net cash used in investment  activities of
$1.5 million in 1999. The increase in net cash used in investing  activities was
primarily attributable to the acquisition of the Blue Sky business and trademark
licenses and  trademarks,  the  purchases  of property and  equipment as well as
increases in deposits and other assets. Management, from time to time, considers
the acquisition of capital equipment,  particularly,  merchandise display racks,
vans and  promotional  vehicles,  coolers and other  promotional  equipment  and
businesses  compatible  with the image of the  Hansen's(R)  brand as well as the
introduction of new product lines.

         Net cash provided by financing activities was $7.1 million for the year
ending  December 31, 2000, as compared to net cash used in financing  activities
of $1.6  million in 1999.  The net cash  provided  by  financing  activities  is
primarily  attributable  to borrowings  on the Company's  line of credit of $9.2
million  which was  partially  offset by  repayments in respect of the Company's
term loan and line of credit of $1.6 million in the year ended December 31, 2000
as  compared to payments of $2.1  million  made in the year ended  December  31,
1999. The Company also  repurchased  206,761  shares of the Company's  stock for
$815,000 in 2000.  Additionally,  cash generated by the issuance of common stock
increased to $257,000 in 2000 from $28,000 in 1999.

         In  1997  the  Company   obtained  a  credit   facility  from  Comerica
Bank-California ("Comerica"),  consisting of a revolving line of credit of up to
$3.0  million  in  aggregate  at any time  outstanding  and a term  loan of $4.0
million.  The  utilization  of the revolving line of credit by HBC was dependent
upon certain levels of eligible  accounts  receivable and inventory from time to
time. Such revolving line of credit and term loans were secured by substantially
all of HBC's  assets,  including  accounts  receivable,  inventory,  trademarks,
trademark  licenses  and  certain  equipment.  That  facility  was  subsequently
modified from time to time, and on September 19, 2000, the Company  entered into
modification  agreement with Comerica which amended certain provisions under the
above  facility in order to finance the  acquisition  of the Blue Sky  business,
repay the term loan,  and  provide  additional  working  capital  ("Modification
Agreement").  Pursuant to the  Modification  Agreement,  the  revolving  line of

                                       24

<PAGE>
credit was  increased  to $12.0  million,  reducing to $6.0 million by September
2004.  The  revolving  line of credit  remains in full force and effect  through
September 2005. Further, the rate of interest payable by the Company on advances
under  the line of  credit  are  based on  bank's  base  (prime)  rate,  plus an
additional  percentage  of up to  0.5% or the  LIBOR  rate,  plus an  additional
percentage of up to 2.5%, depending upon certain financial ratios of the Company
from time to time.

         The initial use of proceeds under the Modification Agreement was to pay
the seller in connection with the acquisition of the Blue Sky business, to repay
the remaining  $807,000  balance due under the term loan and to finance  working
capital. The Company's outstanding  borrowings on the line of credit at December
31, 2000 were $9.2 million.

         The credit facility  contains  financial  covenants,  which require the
Company to  maintain  certain  financial  ratios and achieve  certain  levels of
annual income. The facility also contains certain  non-financial  covenants.  At
both  December 31, 2000 and 1999,  respectively,  the Company was in  compliance
with all covenants.

         Management believes that cash available from operations, including cash
resources and the revolving  line of credit,  will be sufficient for its working
capital needs, including purchase commitments for raw materials, payments of tax
liabilities,  debt  servicing,  expansion and  development  needs,  purchases of
shares of common  stock of the  Company,  as well as any  purchases  of  capital
assets or equipment through December 31, 2001.

European Monetary Union

         Within  Europe,  the European  Economic and Monetary  Union (the "EMU")
introduced a new currency,  the Euro, on January 1, 1999. The new currency is in
response to the EMU's policy of economic  convergence to harmonize trade policy,
eliminate  business costs  associated with currency  exchange and to promote the
free flow of capital, goods and services.

         On January 1, 2000,  the  participating  countries  adopted the Euro as
their local  currency,  initially  available  for  currency  trading on currency
exchanges  and  non-cash  transactions  such  as  banking.  The  existing  local
currencies,  or legacy  currencies,  will remain legal tender through January 1,
2002. Beginning January 1, 2002,  Euro-denominated  bills and coins will be used
for cash  transactions.  For a period of up to six months  from this date,  both
legacy  currencies and the Euro will be legal tender. On or before July 1, 2002,
the participating  countries will withdraw all legacy currencies and exclusively
use the Euro.

         The Company's transactions are recorded in U.S. Dollars and the Company
does not currently  anticipate future  transactions  being recorded in the Euro.
Based on the lack of  transactions  recorded in the Euro,  the Company  does not
believe  that the Euro will have a material  effect on the  financial  position,
results of operations or cash flows of the Company. In addition, the Company has
not  incurred  and does not  expect  to incur  any  significant  costs  from the
continued  implementation of the Euro,  including any currency risk, which could
materially  affect the  Company's  business,  financial  condition or results of
operations.

         The Company has not experienced any significant operational disruptions
to date and does not currently expect the continued  implementation  of the Euro
to cause any significant operational disruptions.

New Accounting Pronouncements

         In June 1998, the Financial  Accounting Standards Board issued SFAS No.
133,  Accounting for Derivative  Instruments and Hedging  Activities,  which the
Company is required  to adopt  effective  in its fiscal year 2001.  SFAS 133, as
amended,   establishes   accounting  and  reporting   standards  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts and for hedging  activities.  Under SFAS 133,  certain  contracts that
were not  formerly  considered  derivatives  may now meet  the  definition  of a
derivative.  SFAS No.  133  requires  derivatives  to be  reported  as assets or
liabilities at fair value, and is effective for all fiscal years beginning after
June 15, 2000.  The Company will adopt SFAS No. 133  effective  January 1, 2001.

                                       25

<PAGE>
Management does not expect the adoption of SFAS 133 to have  significant  impact
on the financial position, results of operations or cash flows of the Company.

         In December 1999, the Securities Exchange Commission staff issued Staff
Accounting Bulletin No. 101, Revenue  Recognition in Financial  Statements ("SAB
No.  101").  SAB No. 101  summarizes  certain of the  staff's  views in applying
accounting  principles  generally  accepted  in the United  States of America to
revenue  recognition  and  accounting  for  deferred  costs in the  consolidated
financial statements and is effective no later than the fourth quarter of fiscal
years beginning after December 15, 1999. Based on the Company's  current revenue
recognition  policy,  there was no material  impact to the  Company's  financial
position and consolidated statements of income from the adoption of SAB No. 101.

         In accordance with Emerging Issues Task Force No. 00-10, Accounting for
Shipping  and Handling  Fees and Costs,  reimbursements  of freight  charges are
recorded in net sales in the accompanying consolidated statements of income. For
the years ended December 31, 2000, 1999 and 1998,  freight-out costs amounted to
$4.9 million, $4.3 million, and $3.0 million,  respectively,  have been recorded
in selling, general and administrative expenses in the accompanying consolidated
statements of income.

Year 2000 Compliance

         Prior to January 1, 2000,  the Company  reviewed  the  readiness of its
computer  systems and business  practices for handling  Year 2000 issues.  Since
entering the Year 2000, the Company has not experienced any major disruptions to
its business nor is it aware of any  significant  Year 2000 related  disruptions
impacting its customers and suppliers.

         Cost  incurred  to  achieve  Year 2000  readiness,  which  include  any
contractor  costs to modify  existing  systems and costs of  internal  resources
dedicated to achieving Year 2000 compliance, were changed to expense as incurred
and were not material in 2000.

Forward Looking Statements

         The Private Security Litigation Reform Act of 1995 (the "Act") provides
a safe  harbor  for  forward  looking  statements  made by or on  behalf  of the
Company.  The Company and its representatives may from time to time make written
or oral  forward  looking  statements,  including  statements  contained in this
report and other  filings with the  Securities  and Exchange  Commission  and in
reports to  shareholders  and  announcements.  Certain  statements  made in this
report,  including  certain  statements  made  in  management's  discussion  and
analysis,  may  constitute  forward  looking  statements  (within the meaning of
Section  27.A of the  Securities  Act 1933 as amended  and  Section  21.E of the
Securities  Exchange Act of 1934,  as amended)  regarding  the  expectations  of
management  with  respect to  revenues,  profitability,  adequacy  of funds from
operations and the Company's  existing credit facility,  among other things. All
statements  which address  operating  performance,  events or developments  that
management  expects or  anticipates  will or may occur in the  future  including
statements  related to new products,  volume  growth,  revenues,  profitability,
adequacy  of  funds  from  operations,  and/or  the  Company's  existing  credit
facility,  earnings per share growth,  statements  expressing  general  optimism
about  future  operating  results and  non-historical  information,  are forward
looking statements within the meaning of the Act.

         Management  cautions that these statements are qualified by their terms
and/or important  factors,  many of which are outside the control of the Company
that  could  cause  actual  results  and  events to differ  materially  from the
statements made including, but not limited to, the following:

o    Company's  ability to  generate  sufficient  cash  flows to support capital
     expansion  plans  and  general  operating  activities;  
o    Changes  in  consumer preferences;  
o    Changes in demand that are weather related,  particular in areas outside of
     California; 

                                       26

<PAGE> 
o    Competitive  products and  pricing pressures and  the  Company's ability to
     gain or maintain share of sales in the marketplace  as a result of  actions
     by competitors;
o    The introduction of new products;
o    Laws and  regulations,  and/or any changes  therein,  including  changes in
     accounting standards,  taxation  requirements  (including tax rate changes,
     new tax laws and revised tax law interpretations) and environmental laws as
     well as the Federal  Food Drug and  Cosmetic  Act,  the Dietary  Supplement
     Health and Education Act, and regulations  made thereunder or in connection
     therewith,  especially those that may affect the way in which the Company's
     products  are  marketed  as well as laws and  regulations  or rules made or
     enforced by the Food and Drug Administration  and/or the Bureau of Alcohol,
     Tobacco and Firearms and/or certain state regulatory agencies;
o    Changes in the cost and  availability  of raw  materials and the ability to
     maintain favorable supply arrangements and relationships and procure timely
     and/or adequate production of all or any of the Company's products;
o    The Company's ability to achieve earnings forecasts,  which may be based on
     projected  volumes and sales of many  product  types  and/or new  products,
     certain  of which are more  profitable  than  others and in respect of many
     which the Company's  experience is limited.  There can be no assurance that
     the Company will achieve projected levels or mixes of product sales;
o    The Company's ability to penetrate new markets;
o    The marketing  efforts of distributors of the Company's  products,  most of
     which  distribute  products that are  competitive  with the products of the
     Company;
o    Unilateral decisions by distributors, grocery store chains, specialty chain
     stores,  club stores, mass merchandisers and other customers to discontinue
     carrying all or any of the Company's products that they are carrying at any
     time;
o    The  terms  and/or  availability  of the Company's  credit facility and the
     actions of its creditors;  
o    The effectiveness of the Company's  advertising,  marketing and promotional
     programs;  
o    Adverse  weather  conditions,  which could reduce demand for the  Company's
     products;  
o    The  Company's  ability to make suitable arrangements for the co-packing of
     its  functional drinks  in 8.2-ounce slim cans  and Smoothies in 11.5-ounce
     cans.

     The foregoing list of important factors is not exhaustive.

Sales

         The table set forth below discloses  selected  quarterly data regarding
sales  for the  past  five  years.  Data  from any one or more  quarters  is not
necessarily indicative of annual results or continuing trends.

         Sales are  expressed  in actual cases and case  equivalents.  A case is
defined as follows:

o    Soda  concentrate  sold that will yield  twenty-four 12-ounce (354-ml) cans
     measured by volume.
o    Soda cases equal  twenty-four  12-ounce  cans or 11-ounce (325 ml) bottles,
     thirty  12-ounce  cans, or twelve  23-ounce (680 ml),  twenty four 14-ounce
     (414 ml) or twelve 1-liter bottles measured by volume.
o    Juice and juice blend cases equal  twelve  32-ounce  bottles,  six 64-ounce
     glass  bottles,  eight  64-ounce  P.E.T.  bottles,  four  128-ounce  P.E.T.
     bottles, twenty-four or twenty-seven 8.45-ounce (250 ml) tetra-pak boxes or
     the equivalent volume.
o    Non-carbonated  iced  tea,  lemonade  and  juice   cocktail   cases   equal
     twenty-four  16-ounce  (473 ml)  or  fifteen  or  twenty  20-ounce (591-ml)
     bottles measured by volume.
o    Still water cases equal twenty-four  0.5-liter, twelve 1.0-liter and twelve
     1.5-liter  plastic  bottles  measured by volume.  
o    Fruit juice  Smoothie cases  equals twenty-four 11.5-ounce (340-ml) cans or
     twenty-four   16-ounce  or 13.5-ounce (400 ml) or 12-ounce bottles or eight
     64-ounce P.E.T. bottles measured by volume.
o    Functional  drink cases  equal twenty-four 8.2-ounce (243-ml) cans measured
     by volume.
o    Healthy Start cases equal twelve 46-ounce (1.36 L),  eight 64-ounce  P.E.T.
     bottles or twenty-four 12-ounce glass bottles measured by volume.

                                       27

<PAGE>
o    Hard e cases equal twenty-four 12-ounce bottles, measured by volume.
o    Fruit and grain bar cases equal ninety 1.76-ounce bars.
o    Natural cereal cases equal twenty 13-ounce boxes measured by volume.

         The Company's  quarterly results of operations  reflect seasonal trends
that are  primarily  the result of increased  demand in the warmer months of the
year.  It has been  Hansen's  experience  that  beverage  sales tend to be lower
during the first and fourth  quarters of each fiscal  year.  Because the primary
historical  market for Hansen's  products is  California,  which has a year-long
temperate climate, the effect of seasonal  fluctuations on quarterly results may
have been mitigated;  however,  such  fluctuations may be more pronounced as the
distribution of Hansen's products expands outside of California. The Company has
no experience with its food bars, cereal products and Hard e malt based products
and  consequently  has no  knowledge  of the  trends  which may occur  with such
products. Quarterly fluctuations may also be affected by other factors including
the introduction of new products,  the opening of new markets where  temperature
fluctuations are more pronounced, the addition of new bottlers and distributors,
changes in the mix of the sales of its finished products,  soda concentrates and
food products and increased advertising and promotional expenses. See also "ITEM
1. BUSINESS - SEASONALITY."


<TABLE>
<CAPTION>
   <S>                <C>              <C>              <C>              <C>              <C>

         Case Sales (in Thousands)

                           2000             1999            1998                1997             1996
                      -----------      ------------     -----------      ------------     ------------
   Quarter 1               1,730             1,372           1,237               861              940
   Quarter 2               2,331             1,716           1,566             1,383            1,340
   Quarter 3               2,238             2,074           1,845             1,648            1,341
   Quarter 4               1,985             1,779           1,241             1,234              876
                      -----------      ------------     -----------      ------------     ------------
   Total                   8,284             6,941           5,889             5,126            4,497
                      ===========      ============     ===========      ============     ============

         Net Revenues (in Thousands)

                         2000                 1999            1998              1997             1996
                      -----------      ------------     -----------      ------------     ------------
   Quarter 1            $ 15,978          $ 15,229        $ 11,265          $  7,120         $  7,365
   Quarter 2              22,667            19,142          13,950            11,496           10,394
   Quarter 3              22,702            20,491          16,589            13,439           10,817
   Quarter 4              18,386            17,441          12,062            11,002            6,989
                      -----------      ------------     -----------      ------------     ------------
   Total                $ 79,733          $ 72,303        $ 53,866          $ 43,057         $ 35,565
                      ===========      ============     ===========      ============     ============
</TABLE>



Inflation

         The Company does not believe that inflation had a significant impact on
the Company's results of operations for the periods presented.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The  information  required to be  furnished in response to this item is
submitted  hereinafter  following the signature page hereto at pages F-1 through
F-19.


ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

         None.

                                       28




<PAGE>




     PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

General

         Directors  of the Company  are  elected  annually by the holders of the
common  stock  and  executive  officers  are  elected  annually  by the Board of
Directors,  to serve until the next annual meeting of  stockholders or the Board
of  Directors,  as the case may be, or until  their  successors  are elected and
qualified.  It is anticipated that the next annual meeting of stockholders  will
be held in September 2001.

Set forth below are the names, ages and principal  occupations for the last five
years of the directors and/or executive officers of the Company:

         Rodney  C.  Sacks  (51) -  Chairman  of the Board of  Directors  of the
Company,  Chief Executive Officer and director of the Company from November 1990
to the present.  Member of the Executive  Committee of the Board of Directors of
the Company since October 1992. Chairman and a director of HBC from June 1992 to
the present.  Mr. Sacks resigned from his position as Chief Financial Officer of
the Company in July 1996,  which office he had held from  November  1990 to July
1996.

         Hilton H.  Schlosberg (48) - Vice Chairman of the Board of Directors of
the Company,  President,  Chief Operating Officer,  Secretary, and a director of
the Company from November 1990 to the present.  Chief  Financial  Officer of the
Company  since  July 1996.  Member of the  Executive  Committee  of the Board of
Directors of the Company since October  1992.  Member of the Audit  Committee of
the Board of Directors from  September 1997 to April 2000.  Vice Chairman of the
Board of  Directors,  Secretary  and a  director  of HBC from  July  1992 to the
present. Director and/or Deputy Chairman of AAF Industries PLC, a United Kingdom
publicly quoted industrial group, from June 1990 until April 1995.

         Benjamin M. Polk (50) - Director of the Company from  November  1990 to
the present. Assistant Secretary of HBC since October 1992 and a director of HBC
since July 1992.  Member of the Audit Committee of the Board of Directors of the
Company  from  September  1997 to  November  2000.  Member  of the  Compensation
Committee  of the Board of  Directors  of the  Company  from  April  1991  until
September  1997.  Partner with  Wintson & Strawn (New York,  New York) where Mr.
Polk has practiced law with that firm and its predecessors, Whitman Breed Abbott
& Morgan LLP and Whitman & Ransom, from August 1976 to the present. (1)

         Norman C.  Epstein  (60) - Director  of the  Company  and member of the
Compensation Committee of the Board of Directors of the Company since June 1992.
Member and  Chairman of the Audit  Committee  of the Board of  Directors  of the
Company  since  September  1997.  Director  of HBC since July 1992.  Director of
Integrated  Asset  Management  Limited,  a company  listed on the  London  Stock
Exchange since June 1998.  Managing Director of Cheval  Acceptances,  a mortgage
finance  company  based in London,  England.  Partner  with Moore  Stephens,  an
international  accounting  firm,  from 1974 to  December  1996  (senior  partner
beginning 1989 and the managing  partner of Moore  Stephens,  New York from 1993
until 1995).

         Harold C. Taber,  Jr.  (61) - Director of the Company  since July 1992.
Member of the  Audit  Committee  of the Board of  Directors  since  April  2000.
Consultant to the Company from July 1, 1997 to June 30, 2000.  Consultant to The
Joseph Company from September 1997 to March 1999.  President and Chief Executive
Officer and a director of HBC from July 1992 to June 1997. On June 30, 1997, Mr.
Taber  resigned  from his  employment  as well as director,  President and Chief
Executive  Officer of HBC. In  addition,  effective  June 30,  1997,  Mr.  Taber
resigned as a member of the Executive Committee on which he served since October
1992.

                                       29

<PAGE>
         Mark S.  Vidergauz  (47) - Director  of the  Company  and member of the
Compensation Committee of the Board of Directors of the Company since June 1998.
Member of the  Audit  Committee  of the Board of  Directors  since  April  2000.
Managing  Director and Chief Executive Officer of Sage Group LLC from April 2000
to present.  Managing  director at the Los Angeles  office of ING Barings LLC, a
diversified financial service institution  headquartered in the Netherlands from
April 1995 to April 2000.  Prior to joining  ING Barings LLC in April 1995,  Mr.
Vidergauz was a managing  director at Wedbush Morgan  Securities,  an investment
banking firm in Los Angeles,  from 1991 to 1995. Prior to joining  Wedbush,  Mr.
Vidergauz  was a  corporate  finance  attorney  in the  Los  Angeles  office  of
O'Melveny & Meyers.

1 Mr. Polk and his law firm, Winston & Strawn, serve as counsel to the Company


Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Exchange Act requires the Company's  directors and
executive  officers,  and persons who own more than ten percent of a  registered
class of the Company's equity securities, to file by specific dates with the SEC
initial  reports of  ownership  and  reports of changes in  ownership  of equity
securities  of the  Company.  Officers,  directors  and greater than ten percent
stockholders  are required by SEC  regulation to furnish the Company with copies
of all Section 16(a) forms that they file.  The Company is required to report in
this  annual  report on Form 10-K any  failure of its  directors  and  executive
officers and greater than ten percent  stockholders  to file by the relevant due
date any of these  reports  during the most recent  fiscal year or prior  fiscal
years.

         To the  Company's  knowledge,  based solely on review of copies of such
reports  furnished to the Company  during the year ended  December 31, 2000, all
Section  16(a)  filing  requirements   applicable  to  the  Company's  officers,
directors and greater than ten percent stockholders were in compliance.


ITEM 11.          EXECUTIVE COMPENSATION

         The following tables set forth certain information  regarding the total
remuneration  earned and grants of  options/stock  appreciation  rights ("SARs")
made to the chief executive officer and each of the four most highly compensated
executive  officers of the Company and its  subsidiaries  who earned  total cash
compensation  in excess of $100,000  during the year ended  December  31,  2000.
These  amounts  reflect  total cash  compensation  paid by the  Company  and its
subsidiaries  to these  individuals  during the years  December 31, 1998 through
2000.

                                       30

<PAGE>
SUMMARY COMPENSATION TABLE 

<TABLE>
<CAPTION>
<S>                           <C>         <C>             <C>         <C>               <C>
                                                                                            Long Term
                                                     ANNUAL COMPENSATION                 Compensation (4)
                                                                                           Awards (5)
----------------------------- ----------- --------------- ----------- ----------------- --------------------
                                                                           Other            Securities
                                                                           Annual           underlying
Name and Principal                                         Bonus (2)    Compensation       Options/SARs 
     Positions                   Year      Salary (1)($)      ($)            ($)               (#)
----------------------------- ----------- --------------- ----------- ----------------- --------------------
      Rodney C. Sacks            2000        194,400        10,000           6,262 (3)
       Chairman, CEO             1999        180,000        25,000           6,088 (3)        100,000
        and Director             1998        160,000        34,000       1,927,431 (6)         75,000
----------------------------- ----------- --------------- ----------- ----------------- --------------------
    Hilton H. Schlosberg         2000        194,400        10,000           6,263 (3)
     Vice-Chairman, CFO          1999        180,000        25,000           6,088 (3)        100,000
  President, Secretary and       1998        160,000        34,000       1,689,972 (7)         75,000
          Director
----------------------------- ----------- --------------- ----------- ----------------- --------------------
        Mark J. Hall             2000        160,000        20,000           8,061 (3)
     Sr. Vice President          1999        150,000        40,000           7,551 (3)         30,000
    Distributor Division         1998        136,250        65,000         180,982 (8)        120,000
----------------------------- ----------- --------------- ----------- ----------------- --------------------
       Kirk S. Blower            2000        115,000         4,000           7,316 (3)
     Sr. Vice President          1999        110,000        16,800           7,099 (3)         12,500
       Juice Division            1998        111,250        16,800         363,440 (9)
----------------------------- ----------- --------------- ----------- ----------------- --------------------
      Timothy M. Welch           2000        110,000         3,000          14,202 (10)
 Senior Vice President Soda      1999         99,000        12,960          12,310 (10)        72,000
          Division               1998
----------------------------- ----------- --------------- ----------- ----------------- --------------------
</TABLE>


1 SALARY - Pursuant to  employment  agreement,  Mrs.  Sacks and  Schlosberg  are
entitled to an annual base salary of  $194,400  and  $180,000  for 2000 and 1999
respectively.  For  1998,  Mrs.  Sacks  and  Schlosberg  agreed  to a  temporary
reduction of their respective  salaries to $160,000.  

2 BONUS - Payments made in 2001, 2000 and 1999 are for bonuses  accrued in 2000,
1999 and 1998.

3 OTHER ANNUAL COMPENSATION - The cash value of perquisites of the named persons
did not total  $50,000  or 10% of  payments  of  salary  and bonus for the years
shown.

4 LONG-TERM  INCENTIVE  PLAN PAYOUTS - None paid.  No plan in place.

5 RESTRICTED STOCK AWARDS  -  The  Company  does  not have a plan for restricted
stock awards.

6 Includes $1,921,625 representing  the  dollar value  of the difference between
the price paid for common  stock of the Company  through  the  exercise of stock
options and the fair market  value of the common  stock on the date of exercise;
and $5,806 for automobile expense reimbursement.

7 Includes  $1,684,125  representing the  dollar value of the difference between
the price paid for common  stock of the Company  through  the  exercise of stock
options and the fair market  value of the common  stock on the date of exercise;
and  $5,847  for  automobile   expense   reimbursement.

8  Includes   $179,660 representing  the dollar  value of the difference between
the price paid for common  stock of the Company  through  the  exercise of stock
options and the fair market  value of the common  stock on the date of exercise;
and $1,322 for automobile expense reimbursement.

9 Includes $362,040 representing the dollar value of the  difference between the
price paid for common stock of the Company through the exercise of stock options
and the fair  market  value of the  common  stock on the date of  exercise;  and
$1,400 for automobile expense reimbursement.

10  Includes  $6,000 for auto  reimbursement  expenses  and  $6,000 for  housing
expenses in 2000. Includes $5,500 for auto reimbursement expenses and $5,500 for
housing expenses in 1999.

ALL OTHER COMPENSATION - none paid

OPTION/SAR GRANTS FOR THE YEAR ENDED DECEMBER 31, 2000 

         None.

                                       31

<PAGE>

AGGREGATED OPTION/SAR EXERCISES DURING THE YEAR ENDED DECEMBER 31 2000 AND 
OPTION/SAR VALUES AT DECEMBER 31, 2000 


<TABLE>
<S>                             <C>                   <C>                   <C>                   <C>

                                                                                 Number of         Value of unexercised
                                                                                 underlying            in-the-money
                                                                                unexercised           options/SARs at
                                                                              options/SARs at        December 31, 2000
                                                                             December 31, 2000              ($)
                                                                                    (#)
                                                                            --------------------- ------------------------
                                 Shares acquired on          Value              Exercisable/           Exercisable/
            Name                    exercise (#)          Realized ($)         Unexercisable           Unexercisable
------------------------------- --------------------- --------------------- --------------------- ------------------------
Rodney C. Sacks                          -                     -               70,500/67,000 (1)         85,688/0
------------------------------- --------------------- --------------------- --------------------- ------------------------
Hilton H. Schlosberg                     -                     -               70,500/67,000 (1)         85,688/0
------------------------------- --------------------- --------------------- --------------------- ------------------------
Mark J. Hall                             -                     -               68,000/48,000 (2)      180,820/135,120
------------------------------- --------------------- --------------------- --------------------- ------------------------
Kirk S. Blower                           -                     -                2,500/10,000 (3)            0/0
------------------------------- --------------------- --------------------- --------------------- ------------------------
Timothy M. Welch                         -                     -               14,400/57,600 (4)            0/0
------------------------------- --------------------- --------------------- --------------------- ------------------------
</TABLE>


1 Includes  options to purchase 37,500 shares of common stock at $1.59 per share
of which all are exercisable at December 31, 2000,  granted  pursuant to a Stock
Option  Agreement  dated January 30, 1998 between the Company and Messrs.  Sacks
and Schlosberg,  respectively;  and options to purchase 100,000 shares of common
stock at $4.25 per share of which 33,000 are  exercisable  at December 31, 2000,
granted  pursuant to Stock Option  Agreements dated February 2, 1999 between the
Company and Messrs. Sacks and Schlosberg, respectively.

2 Includes  options to purchase 96,000 shares of common stock at $1.06 per share
of which 48,000 are  exercisable  at December 31,  2000,  granted  pursuant to a
Stock Option Agreement dated February 10, 1997 between the Company and Mr. Hall;
options to purchase  20,000  shares of common  stock at $1.59 per share of which
20,000 are exercisable at December 31, 2000,  granted pursuant to a Stock Option
Agreement dated January 30, 1998 between the Company and Mr. Hall.

3 Includes options to purchase  12,500 shares of common stock at $4.25 per share
of which 2,500 are exercisable at December 31, 2000, granted pursuant to a Stock
Option Agreement dated February 2, 1999 between the Company and Mr. Blower.

4 Includes options to purchase  72,000 shares of common stock at $4.44 per share
of which 14,400 are  exercisable  at December 31,  2000,  granted  pursuant to a
Stock Option Agreement dated February 1, 1999 between the Company and Mr. Welch.

                                       32

<PAGE>

Performance Graph

         The following graph shows a five-year comparison of cumulative total
returns: (1)

                           TOTAL SHAREHOLDER RETURNS

                            ANNUAL RETURN PERCENTAGE

For the years ended December 31,

Company Name/Index                1996      1997      1998      1999      2000
----------------------          --------  --------  --------  --------  --------
HANSEN NAT CORP                   54.59     70.62    196.63    (19.78)   (10.13)
S&P SMALLCAP 600 INDEX            21.32     25.58     (1.31)    12.40     11.80
PEER GROUP                        49.88     34.05    (43.03)     9.99     17.78


                                INDEXED RETURNS

For the years ended December 31,

                         Base
                        Period
Company Name/Index       1995     1996      1997      1998      1999      2000
----------------------  ------  --------  --------  --------  --------  --------
HANSEN NAT CORP           100    154.59    263.76    782.39    627.66    564.05
S&P SMALLCAP 600 INDEX    100    121.32    152.36    150.37    169.02    188.96
PEER GROUP                100    149.88    200.91    114.46    125.90    148.28






1 Annual  return  assumes  reinvestment  of dividends.  Cumulative  total return
assumes an initial  investment  of $100 on  December  31,  1995.  The  Company's
self-selected  peer group is  comprised  of Saratoga  Beverage  Group,  National
Beverage Corporation, Clearly Canadian Beverage Company, Triarc Companies, Inc.,
Leading Brands, Inc. and Northland Cranberries. All of the companies in the peer
group traded during the entire  five-year  period with the exception of Saratoga
Beverage Group,  which traded through 1999, and Triarc  Companies,  Inc.,  which
sold their beverage business in October 2000.

Employment Agreements

         The Company entered into an employment agreement dated as of January 1,
1999,  with Rodney C. Sacks pursuant to which Mr. Sacks renders  services to the
Company as its Chairman and Chief Executive Officer for an annual base salary of
$180,000,  for the twelve-month period ended December 31, 1999,  increasing by a
minimum of 8% for each  subsequent  twelve-month  period  during the  employment
period,  plus an annual bonus in an amount  determined at the  discretion of the
Board of Directors and certain fringe benefits.  The employment period commenced
on January 1, 1999 and ends on December 31, 2003.

         The Company  also  entered  into an  employment  agreement  dated as of
January 1, 1999,  with Hilton H.  Schlosberg  pursuant  to which Mr.  Schlosberg
renders services to the Company as its Vice Chairman, President, Chief Operating
Officer,  Chief  Financial  Officer and  Secretary  for an annual base salary of
$180,000,  for the twelve-month period ended December 31, 1999,  increasing by a
minimum of 8% for each  subsequent  twelve-month  period  during the  employment
period,  plus an annual bonus in an amount  determined at the  discretion of the
Board of Directors and certain fringe benefits.  The employment period commenced
on January 1, 2000 and ends on December 31, 2003.

                                       33

<PAGE>

         The preceding  descriptions  of the  employment  agreements for Messrs.
Sacks and  Schlosberg  are  qualified  in their  entirety by  reference  to such
agreements  which have been filed or  incorporated  by  reference as exhibits to
this report.

Directors' Compensation

         The Company's current policy is to pay outside directors (non-executive
officers)  who are not  contractually  entitled  to be  nominated  to  serve  as
directors,  annual  fees of $7,000  plus $500 for each  meeting  attended of the
Board of Directors or any committee thereof. Norman E. Epstein, Benjamin M. Polk
and Harold C. Taber, Jr. earned  director's fees of $8,000 and Mark S. Vidergauz
earned  director's  fees of $7,500 for the one-year  period  ended  December 31,
2000.

Employee Stock Option Plan

         The Company has a stock option plan (the "Plan") that  provides for the
grant of options to purchase up to  3,000,000  shares of the common stock of the
Company to certain key  employees of the Company and its  subsidiaries.  Options
granted  under the Plan may either be incentive  stock options  qualified  under
Section 422 of the Internal  Revenue Code of 1986,  as amended or  non-qualified
options.  Such options are exercisable at fair market value on the date of grant
for a period of up to ten years.  Under the Plan,  shares subject to options may
be purchased for cash, for shares of common stock valued at fair market value on
the date of purchase or in  consideration  of the cancellation of options valued
at the  difference  between the exercise price thereof and the fair market value
of the common stock on the date of  exercise.  The Plan is  administered  by the
Compensation  Committee of the Board of  Directors of the Company,  comprised of
directors who have not received  grants of options under the Plan.  Grants under
the Plan are made pursuant to individual agreements between the Company and each
grantee that  specifies the terms of the grant,  including  the exercise  price,
exercise period, vesting and other terms thereof.

Outside Directors Stock Option Plan

         The  Company  has  an  option  plan  for  its  outside  directors  (the
"Directors  Plan") that  provides  for the grant of options to purchase up to an
aggregate  of 100,000  shares of common stock of the Company to directors of the
Company who are not and have not been employed by or acted as consultants to the
Company and its  subsidiaries  or  affiliates  and who are not and have not been
nominated  to the Board of Directors  of the Company  pursuant to a  contractual
arrangement.  On the date of the  annual  meeting  of  stockholders  at which an
eligible  director is initially  elected,  each eligible director is entitled to
receive a one-time grant of an option to purchase 6,000 shares (12,000 shares if
the  director is serving on a committee  of the Board) of the  Company's  Common
Stock  exercisable  at the closing price for a share of common stock on the date
of grant.  Options become  exercisable  one-third each on the first,  second and
third anniversary of the date of grant; provided,  however, that options granted
as of February 14, 1995 are exercisable 66 2/3% on the date of grant and 100% on
July 8, 1995;  provided  further,  that all options held by an eligible director
become  fully  and  immediately  exercisable  upon a change  in  control  of the
Company.  Options  granted  under  the  Directors  Plan  that are not  exercised
generally  expire ten years after the date of grant.  Option  grants may be made
under the Directors  Plan for ten years from the effective date of the Directors
Plan. The Directors  Plan is a "formula plan" so that a non-employee  director's
participation   in  the  Directors   Plan  does  not  affect  his  status  as  a
"disinterested  person" (as defined in Rule 16b-3 under the Securities  Exchange
Act of 1934).


                                       34


<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

(a)               The  following  table sets forth  information,  as of March 2,
                  2001,   of  the  only   persons   known  to  the  Company  who
                  beneficially own more than 5% of the outstanding  common stock
                  of the Company:

Title            Name and  Address of         Amount and Nature of     Percent
Of Class         Beneficial Owner             Beneficial Ownership     of Class
-------------- ---------------------------- ------------------------ -----------
Common Stock     Brandon Limited                                                
                     Partnership No. 1 (1)       654,822                  6.5%
                 Brandon Limited 
                     Partnership No. 2 (2)     2,831,667                 28.2%
                 Rodney C. Sacks (3)           3,967,989 (4)             39.1%
                 Hilton H. Schlosberg (5)      3,929,086 (6)             38.8%


1 The mailing address of Brandon No.1 is P.O. Box 30749, Seven Mile Beach, Grand
Cayman, British West Indies. The general partners of Brandon No. 1 are Rodney C.
Sacks and Hilton H. Schlosberg.

2 The  mailing  address of Brandon  No. 2 is P.O.  Box 30749,  Seven Mile Beach,
Grand  Cayman,  British West Indies.  The general  partners of Brandon No. 2 are
Rodney C. Sacks and Hilton H. Schlosberg.

3 The mailing address of Mr. Sacks is 1010 Railroad Street,  Corona,  California
92882.

4 Includes  387,500  shares of common stock owned by Mr. Sacks;  654,822  shares
beneficially  held by Brandon No. 1 because Mr.  Sacks is one of Brandon No. 1's
general  partners;  and  2,831,667  shares  beneficially  held by Brandon  No. 2
because  Mr.  Sacks is one of Brandon No. 2's general  partners.  Also  includes
options to purchase 37,500 shares of common stock exercisable at $1.59 per share
granted pursuant to a Stock Option Agreement dated January 30, 1998; and options
presently  exercisable to purchase 56,500 shares of common stock, out of options
to purchase a total of 100,000 shares,  exercisable at $4.25 per share,  granted
pursuant to a Stock Option  Agreement dated February 2, 1999 between the Company
and Mr. Sacks.

Mr. Sacks   disclaims  beneficial  ownership of  all shares deemed  beneficially
owned by him hereunder  except:  (i) 387,500  shares of common  stock;  (ii) the
94,000 shares presently exercisable under Stock Option Agreements; (iii) 243,546
shares held by Brandon No. 1 allocable to the limited  partnership  interests in
Brandon No. 1 held by Mr. Sacks, his children and a trust for the benefit of his
children; and (iv) 250,000 shares held by Brandon No. 2 allocable to the limited
partnership  interests  in Brandon No. 2 held by Mr.  Sacks,  his children and a
trust for the benefit of his children.

5 The  mailing  address  of Mr.  Schlosberg  is 1010  Railroad  Street,  Corona,
California 92882.

6 Includes  348,597  shares of common  stock owned by Mr.  Schlosberg,  of which
2,000 shares are jointly owned by Mr.  Schlosberg  and his wife,  654,822 shares
beneficially  held by Brandon No. 1 because Mr. Schlosberg is one of Brandon No.
1's general  partners;  and 2,831,667 shares  beneficially held by Brandon No. 2
because Mr. Schlosberg is one of Brandon No. 2's general partners. Also includes
options to purchase 37,500 shares of common stock exercisable at $1.59 per share
granted  pursuant to a Stock Option Agreement dated January 30, 1998 between the
Company and Mr. Schlosberg; and options presently exercisable to purchase 56,500
shares of common  stock,  out of options to purchase a total of 100,000  shares,
exercisable  at $4.25 per share,  granted  pursuant to a Stock Option  Agreement
dated February 2, 1999 between the Company and Mr. Schlosberg.

Mr. Schlosberg disclaims beneficial  ownership of all shares deemed beneficially
owned by him hereunder  except:  (i) 348,597  shares of common  stock,  (ii) the
94,000 shares presently exercisable under Stock Option Agreements; (iii) 247,911
shares held by Brandon No. 1 allocable to the limited  partnership  interests in
Brandon No. 1 held by Mr.  Schlosberg and his children;  and (iv) 250,000 shares
held by Brandon No. 2 allocable to the limited partnership  interests in Brandon
No. 2 held by Mr. Schlosberg and his children.

                                       35

<PAGE>

(b)               The following table sets forth information as to the ownership
                  of  shares  of  common  stock,  as of March 2,  2001,  held by
                  persons who are directors of the Company,  naming them, and as
                  to directors  and officers of the Company as a group,  without
                  naming them:

Title of Class     Name                     Amount Owned      Percent of Class
---------------- ------------------------ ------------------ -------------------
Common Stock       Rodney C. Sacks            3,967,989 (1)         39.1%
                   Hilton H. Schlosberg       3,929,086 (2)         38.8%
                   Harold C. Taber, Jr.         107,419 (3)          1.1%
                   Mark S. Vidergauz              8,000 (4)           * %

Officers and Directors as a group (6 members: 4,526,005 shares or 44.1% in
aggregate)


*Less than 1%


1 Includes  387,500  shares of common stock owned by Mr. Sacks;  654,822  shares
beneficially  held by Brandon No. 1 because Mr.  Sacks is one of Brandon No. 1's
general  partners;  and  2,831,667  shares  beneficially  held by Brandon  No. 2
because  Mr.  Sacks is one of Brandon No. 2's general  partners.  Also  includes
options to purchase 37,500 shares of common stock exercisable at $1.59 per share
granted pursuant to a Stock Option Agreement dated January 30, 1998; and options
presently  exercisable to purchase 56,500 shares of common stock, out of options
to purchase a total of 100,000 shares,  exercisable at $4.25 per share,  granted
pursuant to a Stock Option  Agreement dated February 2, 1999 between the Company
and Mr. Sacks.

Mr. Sacks  disclaims  beneficial  ownership of all  shares  deemed  beneficially
owned by him hereunder  except:  (i) 387,500  shares of common  stock;  (ii) the
94,000 shares presently exercisable under Stock Option Agreements; (iii) 243,546
share held by Brandon No. 1 allocable  to the limited  partnership  interests in
Brandon No. 1 held by Mr. Sacks, his children and a trust for the benefit of his
children; and (iv) 250,000 shares held by Brandon No. 2 allocable to the limited
partnership  interests  in Brandon No. 2 held by Mr.  Sacks,  his children and a
trust for the benefit of his children.

2 Includes  348,597  shares of common  stock owned by Mr.  Schlosberg,  of which
2,000 shares are owned jointly by Mr.  Schlosberg  and his wife;  654,822 shares
beneficially  held by Brandon No. 1 because Mr. Schlosberg is one of Brandon No.
1's general  partners;  and 2,831,667 shares  beneficially held by Brandon No. 2
because Mr. Schlosberg is one of Brandon No. 2's general partners. Also includes
options to purchase 37,500 shares of common stock exercisable at $1.59 per share
granted  pursuant to a Stock Option Agreement dated January 30, 1998 between the
Company and Mr. Schlosberg; and options presently exercisable to purchase 56,500
shares of common  stock,  out of options to purchase a total of 100,000  shares,
exercisable  at $4.25 per share,  granted  pursuant to a Stock Option  Agreement
dated February 2, 1999 between the Company and Mr. Schlosberg.

Mr. Schlosberg disclaims  beneficial ownership of all shares deemed beneficially
owned by him hereunder  except:  (i) 348,597  shares of common  stock;  (ii) the
94,000 shares presently exercisable under Stock Option Agreements; (iii) 247,911
shares held by Brandon No. 1 allocable to the limited  partnership  interests in
Brandon No. 1 held by Mr.  Schlosberg and his children;  and (iv) 250,000 shares
held by Brandon No. 2 allocable to the limited partnership  interests in Brandon
No. 2 held by Mr. Schlosberg and his children.

3 Includes 71,137 shares of common stock owned by Mr. Taber; and 36,281.7 shares
of common  stock owned by the Taber Family Trust of which Mr. Taber and his wife
are trustees.

4 Includes  options  presently  exercisable  to purchase  8,000 shares of common
stock, out of options to purchase a total of 12,000 shares, exercisable at $3.72
per share,  granted under a Stock Option  Agreement with the Company dated as of
June 18, 1998 pursuant to the Directors Plan.

         There are no arrangements known to the Company, the operation of which,
may at a subsequent date result in a change of control of the Company.


                                       36

<PAGE>


  ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Benjamin  M. Polk is a partner in the law firm of  Winston & Strawn,  a
law firm (together with its predecessors)  that has been retained by the Company
since 1992.

         Rodney C. Sacks is current acting as the sole Trustee of a trust formed
pursuant to an Agreement of Trust dated July 27, 1992 for the purpose of holding
the Hansen's  (R)  trademark.  The Company and HBC have agreed to indemnify  Mr.
Sacks and hold him harmless  from any claims,  loss or liability  arising out of
his acting as Trustee.

         During 2000, the Company  purchased  promotional  items from IFM Group,
Inc.  ("IFM").  Rodney C.  Sacks,  together  with  members  of his  family,  own
approximately  27% of the issued shares in IFM. Hilton H.  Schlosberg,  together
with members of his family,  own  approximately 43% of the issued shares in IFM.
Purchases  from IFM of promotional  items in 2000,  1999 and 1998 were $115,520,
$121,289  and  $151,393,   respectively.   The  Company  continues  to  purchase
promotional items from IFM Group, Inc. in 2001.

         The  preceding  descriptions  of  agreements  are  qualified  in  their
entirety by reference to such  agreements,  which have been filed as exhibits to
this Report.


                                       37


<PAGE>



PART IV


ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                      FORM 8-K


(a)    1. Exhibits

       See the Index to Exhibits included hereinafter.

       2. Index to Financial Statements filed as part of this Report

       Independent Auditors' Report                                         F-2

       Consolidated Balance Sheets as of December 31, 2000 and 1999         F-3

       Consolidated Statements of Income for the years ended
       December 31, 2000, 1999 and 1998                                     F-4

       Consolidated Statements of Shareholders' Equity for the 
       years ended December 31, 2000, 1999 and 1998                         F-5

       Consolidated Statements of Cash Flows for the years ended
       December 31, 2000, 1999 and 1998                                     F-6

       Notes to Consolidated Financial Statements for the years
       ended December 31, 2000, 1999 and 1998                               F-8

(b)    Financial Statement Schedules

       Valuation and Qualifying Accounts for the years ended
       December 31, 2000, 1999 and 1998                                    F-19

(c)    Reports on Form 8-K

       None

                                       38

<PAGE>




SIGNATURES

         Pursuant to the requirements of Sections 13 and 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.

HANSEN NATURAL CORPORATION


              By:   /s/ Rodney C. Sacks                  Date:   March 30, 2001
                   ------------------------
                   Rodney C. Sacks
                   Chairman of the Board

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant in the capacities and on the dates indicated.

Signature                   Title                                    Date

/s/ RODNEY C. SACKS         Chairman of the Board of Directors    March 30, 2001
--------------------------  and Chief Executive Officer
Rodney C. Sacks             (Principal Executive Officer)

/s/ HILTON H. SCHLOSBERG    Vice Chairman of the Board of         March 30, 2001
--------------------------  Directors, President, Chief
Hilton H. Schlosberg        Operating Officer, Chief Financial
                            Officer and Secretary

/s/ BENJAMIN M. POLK        Director                              March 30, 2001
--------------------------
Benjamin M. Polk



/s/ NORMAN C. EPSTEIN       Director                              March 30, 2001
--------------------------
Norman C. Epstein



/s/ HAROLD C. TABER, JR.    Director                              March 30, 2001
--------------------------
Harold C. Taber, Jr.



/s/ MARK S. VIDERGAUZ       Director                              March 30, 2001
--------------------------
Mark S. Vidergauz


                                       39


<PAGE>



INDEX TO EXHIBITS

         The following designated exhibits, as indicated below, are either filed
herewith  or have  heretofore  been  filed  with  the  Securities  and  Exchange
Commission  under the Securities  Act of 1933 or the Securities  Exchange Act of
1934 as indicated by footnote.


<TABLE>
<S>               <C>   
----------------- ------------------------------------------------------------------------------------------
Exhibit No.       Document Description
----------------- ------------------------------------------------------------------------------------------
2.1               Asset Purchase Agreement among Blue Sky Natural Beverage Co., a Delaware  Corporation,  as
                  Purchaser  and Blue Sky  Natural  Beverage  Co.,  a New Mexico  Corporation  as Seller and
                  Robert Black dated as of September 20, 2000.19
----------------- -------------------------------------------------------------------------------------------
3(a)              Certificate of Incorporation. 1
----------------- -------------------------------------------------------------------------------------------
3(b)              Amendment to Certificate of Incorporation dated October 21, 1992. 2
----------------- -------------------------------------------------------------------------------------------
3(c)              By-Laws.  2
----------------- -------------------------------------------------------------------------------------------
10(c)             Asset Purchase  Agreement dated June 8, 1992 ("Asset  Purchase  Agreement"),  by and among
                  Unipac Corporation ("Unipac"),  Hansen Beverage Company ("Hansen"),  California Co-Packers
                  Corporation  ("Co-Packers"),  South Pacific Beverages,  Ltd. ("SPB"), Harold C. Taber, Jr.
                  ("Taber"),  Raimana  Martin ("R.  Martin"),  Charles Martin ("C.  Martin"),  and Marcus I.
                  Bender  ("Bender"),  and  with  respect  to  certain  provisions,  ERLY  Industries,  Inc.
                  ("ERLY"),   Bender  Consulting   Incorporated   ("Bender   Consulting")  and  Black  Pearl
                  International, Ltd. ("Blank Pear"). 2
----------------- -------------------------------------------------------------------------------------------
10(d)             First Amendment to Asset Purchase Agreement dated as of July 10, 1992. 2
----------------- -------------------------------------------------------------------------------------------
10(e)             Second Amendment to Asset Purchase Agreement dated as of July 16, 1992. 2
----------------- -------------------------------------------------------------------------------------------
10(f)             Third Amendment to Asset Purchase Agreement dated as of July 17, 1992. 2
----------------- -------------------------------------------------------------------------------------------
10(g)             Fourth Amendment to Asset Purchase Agreement dated as of July 24, 1992. 2
----------------- -------------------------------------------------------------------------------------------
10(h)             Subordinated  Secured  Promissory  Note of Hansen in favor of ERLY dated July 27,  1992 in
                  the principal amount of $4,000,000.  2
----------------- -------------------------------------------------------------------------------------------
10(i)             Security Agreement dated July 27, 1992 by and between Hansen and ERLY. 2
----------------- -------------------------------------------------------------------------------------------
10(j)             Stock  Option  Agreement  by and between SPB and Unipac  dated July 27, 1992 for an option
                  price of $4.75 per share. 2
----------------- -------------------------------------------------------------------------------------------
10(k)             Stock Option  Agreement by and between  Taber and Unipac dated July 27, 1992 for an option
                  price of $4.75 per share. 2
----------------- -------------------------------------------------------------------------------------------
10(l)             Stock  Option  Agreement by and between  Co-Packers  and Unipac dated July 27, 1992 for an
                  option price of $4.75 per share. 2
----------------- -------------------------------------------------------------------------------------------
10(n)             Stock  Option  Agreement  by and between SPB and Unipac  dated July 27, 1992 for an option
                  price of $2.50 per share. 2
----------------- -------------------------------------------------------------------------------------------
10(o)             Stock  Option  Agreement by and between  Co-Packers  and Unipac dated July 27, 1992 for an
                  option price of $2.50 per share. 2
----------------- -------------------------------------------------------------------------------------------
10(p)             Assignment  Agreement re:  Trademarks by and between Hansen's Juices,  Inc.  ("FJC"),  and
                  Hansen, dated July 27, 1992. 8
----------------- -------------------------------------------------------------------------------------------
10(q)             Assignment  of  Trademarks  dated July 27, 1992 by FJC to Gary  Hansen,  Anthony  Kane and
                  Burton S. Rosky,  as trustees under that certain trust  agreement dated July 27, 1992 (the
                  "Trust"). 8
----------------- -------------------------------------------------------------------------------------------
10(r)             Assignment of License by Co-Packers to Hansen dated as of July 27, 1992. 8
----------------- -------------------------------------------------------------------------------------------
10(s)             Employment Agreement between Hansen and Taber dated as of July 27, 1992. 3
----------------- -------------------------------------------------------------------------------------------
10(t)             Consulting Agreement by and between Hansen and Black Pearl dated July 27, 1992. 3
----------------- -------------------------------------------------------------------------------------------
10(u)             Consulting Agreement by and between Hansen and C. Martin dated July 27, 1992. 3
----------------- -------------------------------------------------------------------------------------------
10(w)             Registration Rights Agreement by and among Unipac, SPB, Co-Packers,  Taber, Wedbush Morgan
                  Securities ("Wedbush"), Rodney C. Sacks, and Hilton H. Schlosberg, dated July 27, 1992. 3
----------------- -------------------------------------------------------------------------------------------
10(z)             Soda Side Letter  Agreement  dated June 8, 1992 by and among Unipac,  Hansen,  SPB,  Black
                  Pearl, Tahiti Beverages, S.A.R.L., R. Martin and C. Martin. 4
----------------- -------------------------------------------------------------------------------------------


                                       40

<PAGE>
10(bb)            Hansen/Taber Agreement dated July 27, 1992 by and among Hansen and Taber. 8
----------------- -------------------------------------------------------------------------------------------
10(cc)            Other Beverage License  Agreement dated July 27, 1992 by and between Hansen and the Trust.
                  8
----------------- -------------------------------------------------------------------------------------------
10(dd)            Non-Beverage License Agreement dated July 27, 1992 by and between Hansen and the Trust. 8
----------------- -------------------------------------------------------------------------------------------
10(ee)            Agreement  of Trust  dated  July 27,  1992 by and among FJC and  Hansen  and Gary  Hansen,
                  Anthony Kane and Burton S. Rosky.  8
----------------- -------------------------------------------------------------------------------------------
10(ff)            Carbonated  Beverage  License  Agreement dated July 27, 1992 by and between Hansen and the
                  Trust.  8
----------------- -------------------------------------------------------------------------------------------
10(gg)            Royalty Sharing Agreement dated July 27, 1992 by and between Hansen and the Trust.  8
----------------- -------------------------------------------------------------------------------------------
10(hh)            Fresh Juices  License  Agreement  dated as of July 27, 1992 by and between  Hansen and the
                  Trust.  8
----------------- -------------------------------------------------------------------------------------------
10(ii)            Incentive  Stock Option  Agreement  dated July 27, 1992 by and between Unipac and Taber at
                  the option price of $2.00 per share.  2
----------------- -------------------------------------------------------------------------------------------
10(jj)            Co-Packing  Agreement  dated November 24, 1992 by and between  Tropicana  Products  Sales,
                  Inc. and Hansen.  4
----------------- -------------------------------------------------------------------------------------------
10(kk)            Office  Lease,  dated  December 16, 1992 by and between Lest C. Smull as Trustee,  and his
                  Successors  under  Declaration of Trust for the Smull family,  dated December 7, 1984, and
                  Hansen.  5
----------------- -------------------------------------------------------------------------------------------
10(ll)            Stock  Option  Agreement  dated as of June 15,  1992 by and  between  Unipac and Rodney C.
                  Sacks.  5
----------------- -------------------------------------------------------------------------------------------
10(mm)            Stock  Option  Agreement  dated as of June 15,  1992 by and  between  Unipac and Hilton H.
                  Schlosberg.  5
----------------- -------------------------------------------------------------------------------------------
10(nn)            Stock Option  Agreement  dated as of February 14, 1995 between Hansen Natural  Corporation
                  and Benjamin M. Polk.  7
----------------- -------------------------------------------------------------------------------------------
10(oo)            Stock Option  Agreement  dated as of February 14, 1995 between Hansen Natural  Corporation
                  and Norman C. Epstein.  7
----------------- -------------------------------------------------------------------------------------------
10(pp)            Employment  Agreement  dated as of January 1, 1994 between Hansen Natural  Corporation and
                  Hilton H. Schlosberg.  6
----------------- -------------------------------------------------------------------------------------------
10(qq)            Employment  Agreement  dated as of January 1, 1994 between Hansen Natural  Corporation and
                  Rodney C. Sacks.  6
----------------- -------------------------------------------------------------------------------------------
10(rr)            Stock Option  Agreement  dated as of July 3, 1995 between Hansen Natural  Corporation  and
                  Rodney C. Sacks. 8
----------------- -------------------------------------------------------------------------------------------
10(ss)            Stock Option  Agreement  dated as of July 3, 1995 between Hansen Natural  Corporation  and
                  Hilton H. Schlosberg.  8
----------------- -------------------------------------------------------------------------------------------
10(tt)            Stock Option  Agreement  dated as of June 30, 1995 between Hansen Natural  Corporation and
                  Harold C. Taber, Jr.  8
----------------- -------------------------------------------------------------------------------------------
10(uu)            Standard  Industrial  Lease  Agreement  dated as of April 25, 1997 between Hansen Beverage
                  Company and 27 Railroad Partnership L.P. 9
----------------- -------------------------------------------------------------------------------------------
10(vv)            Sublease  Agreement  dated as of April 25, 1997 between Hansen  Beverage  Company and U.S.
                  Continental Packaging, Inc. 9
----------------- -------------------------------------------------------------------------------------------
10(ww)            Packaging  Agreement  dated  April 14,  1997  between  Hansen  Beverage  Company  and U.S.
                  Continental Packaging, Inc. 10
----------------- -------------------------------------------------------------------------------------------
10(xx)            Revolving  Credit Loan and Security  Agreement dated May 15, 1997 between  Comerica Bank -
                  California and Hansen Beverage Company. 10
----------------- -------------------------------------------------------------------------------------------
10(yy)            Severance and Consulting  Agreement dated as of June 20, 1997 by and among Hansen Beverage
                  Company, Hansen Natural Corporation and Harold C. Taber, Jr. 10
----------------- -------------------------------------------------------------------------------------------
10(zz)            Stock  Option  Agreement  dated  as of  June  20,  1997  by  and  between  Hansen  Natural
                  Corporation and Harold C. Taber, Jr. 10
----------------- -------------------------------------------------------------------------------------------
10 (aaa)          Variable Rate  Installment  Note dated October 14, 1997 between Comerica Bank - California
                  and Hansen Beverage Company. 10
----------------- -------------------------------------------------------------------------------------------
10 (bbb)          Stock  Option  Agreement  dated as of  January  30,  1998 by and  between  Hansen  Natural
                  Corporation and Rodney C. Sacks.11
----------------- -------------------------------------------------------------------------------------------


                                       41

<PAGE>
10 (ccc)          Stock  Option  Agreement  dated as of  January  30,  1998 by and  between  Hansen  Natural
                  Corporation and Hilton S. Schlosberg.11
----------------- -------------------------------------------------------------------------------------------
10 (ddd)          Warrant  Agreement  made as of April 23, 1998 by and between  Hansen  Natural  Corporation
                  and Rick Dees.12
----------------- -------------------------------------------------------------------------------------------
10 (eee)          Modification  to Revolving  Credit Loan and Security  Agreement as of December 31, 1998 by
                  and between Hansen Beverage Company and Comerica Bank - California.13
----------------- -------------------------------------------------------------------------------------------
10 (fff)          Employment  Agreement as of January 1, 2000 by and between Hansen Natural  Corporation and
                  Rodney C. Sacks.13
----------------- -------------------------------------------------------------------------------------------
10 (ggg)          Employment  Agreement as of January 1, 2000 by and between Hansen Natural  Corporation and
                  Hilton S. Schlosberg.13
----------------- -------------------------------------------------------------------------------------------
10 (hhh)          Stock  Option  Agreement  dated as of  February  2,  2000 by and  between  Hansen  Natural
                  Corporation and Rodney C. Sacks.13
----------------- -------------------------------------------------------------------------------------------
10 (iii)          Stock  Option  Agreement  dated as of  February  2,  2000 by and  between  Hansen  Natural
                  Corporation and Hilton S. Schlosberg.13
----------------- -------------------------------------------------------------------------------------------
10 (jjj)          Stock  Repurchase  Agreement  dated as of August 3, 1998,  by and between  Hansen  Natural
                  Corporation and Rodney C. Sacks.14
----------------- -------------------------------------------------------------------------------------------
10 (kkk)          Stock  Repurchase  Agreement  dated as of August 3, 1998,  by and between  Hansen  Natural
                  Corporation and Hilton H. Schlosberg.14
----------------- -------------------------------------------------------------------------------------------
10 (lll)          Assignment  and  Agreement  dated as of September  22, 2000 by the Fresh Juice  Company of
                  California, Inc. and Hansen Beverage Company. 15
----------------- -------------------------------------------------------------------------------------------
10 (mmm)          Settlement  Agreement dated as of September 2000 by and between and among Rodney C. Sacks,
                  as sole Trustee of The Hansen's Trust and Hansen Beverage  Company The Fresh Juice Company
                  of California, Inc. 15
----------------- -------------------------------------------------------------------------------------------
10 (nnn)          Trademark  Assignment  dated as of  September  24,  2000 by and  between  The Fresh  Juice
                  Company  of  California,  Inc.  (Assignor)  and  Rodney C.  Sacks as sole  Trustee  of The
                  Hansen's Trust (Assignee). 15
----------------- -------------------------------------------------------------------------------------------
10 (ooo)          Settlement  Agreement dated as of September 3, 2000 by and between The Fresh Juice Company
                  of  California,  Inc.,  The Fresh  Smoothie  Company,  LLC,  Barry Lublin,  Hansen's Juice
                  Creations,  LLC,  Harvey  Laderman  and Hansen  Beverage  Company and Rodney C. Sacks,  as
                  Trustee of The Hansen's Trust. 15
----------------- -------------------------------------------------------------------------------------------
10 (ppp)          Royalty  Agreement  dated as of April 26, 1996 by and between  Hansen's  Juices,  Inc. and
                  Hansen's Juice Creations, Limited Liability Company. 15
----------------- -------------------------------------------------------------------------------------------
10 (qqq)          Royalty Agreement dated as of April 26, 2000 by and between Gary Hansen,  Anthony Kane and
                  Burton S. Rosky,  as trustees of Hansen's  Trust and Hansen's Juice  Creations,  a limited
                  liability company. 15
----------------- -------------------------------------------------------------------------------------------
10 (rrr)          Letter Agreement dated May 14, 1996. 15
----------------- -------------------------------------------------------------------------------------------
10 (sss)          Amendment to Royalty  Agreement  as of May 9, 1997 by and between The Fresh Juice  Company
                  of California and Hansen's Juice Creations, Limited Liability Company. 15
----------------- -------------------------------------------------------------------------------------------
10 (ttt)          Assignment of License  Agreements  dated as of February 2000 by Hansen's Juice  Creations,
                  LLC (Assignor) to Fresh Smoothie, LLC (Assignee). 15
----------------- -------------------------------------------------------------------------------------------
10 (uuu)          Amendment  to  Revolving  Credit  Loan and  Security  Agreement  between  Comerica  Bank -
                  California and Hansen Beverage Company dated March 28, 2000. 16
----------------- -------------------------------------------------------------------------------------------
10 (vvv)          Endorsement and Spokesman  Arrangement dated as of February 18, 2000 by and between Hansen
                  Beverage Company and Sammy Sosa. 16
----------------- -------------------------------------------------------------------------------------------
10 (www)          Standard  Industrial Lease Agreement dated as of February 23, 2000 between Hansen Beverage
                  Company and 43 Railroad Partnership L.P. 16
----------------- -------------------------------------------------------------------------------------------
10 (xxx)          Amended  and  Restated  Variable  Rate  Installment  Note by and between  Comerica  Bank -
                  California and Hansen Beverage Company. 17
----------------- -------------------------------------------------------------------------------------------
10 (yyy)          Sixth  Modification  to Revolving  Credit Loan & Security  Agreement by and between Hansen
                  Beverage Company and Comerica Bank - California, dated May 23, 2000. 18
----------------- -------------------------------------------------------------------------------------------


                                       42

<PAGE>

----------------- -------------------------------------------------------------------------------------------
10 (zzz)          Contract Brewing  agreement by and between Hard e Beverage  Company and Reflo,  Inc. dated
                  March 23, 2000.  18
----------------- -------------------------------------------------------------------------------------------
10.1              Modification  dated as of  September  19,  2000,  to  Revolving  Credit Loan and  Security
                  Agreement by and between Hansen Beverage Company and Comerica Bank California. 19
----------------- -------------------------------------------------------------------------------------------
21                Subsidiaries  5
----------------- -------------------------------------------------------------------------------------------
23                Independent Auditors' Consent
----------------- -------------------------------------------------------------------------------------------
27                Financial Data Schedule
----------------- -------------------------------------------------------------------------------------------
99.1              Audited  Financial  Statements of Blue Sky Natural Beverage Co., a New Mexico  corporation
                  ("BSNB-NM") for 1999 and 1998. 20
----------------- -------------------------------------------------------------------------------------------
99.2              Unaudited  Balance  Sheet at  September  30, 2000 for BSNB-NM and  Unaudited  Statement of
                  Operations for the nine-months then ended. 20
----------------- -------------------------------------------------------------------------------------------
</TABLE>




1    Filed previously as an exhibit to the Registration Statement on Form S-3
     (no. 33-35796) (the "Registration Statement").

2    Filed  previously as an exhibit to the Company's proxy statement dated 
     October 21, 1992.

3    Filed previously as an exhibit to Form 8-K dated July 27, 1992.

4    Filed previously as an exhibit to Post-Effective Amendment No. 8 to the 
     Registration Statement.

5    Filed  previously as an exhibit to Form 10-KSB for the year ended
     December 31, 1992.

6    Filed  previously as an exhibit to Form 10-KSB for the year ended
     December 31, 1993.

7    Filed  previously as an exhibit to Form 10-KSB for the year ended
     December 31, 1994.

8    Filed  previously  as an exhibit to Form 10-K for the year ended
     December 31, 1995.

9    Filed  previously  as an exhibit  to Form 10-Q for the  period  ended
     June 30, 1997.

10   Filed  previously  as an exhibit to Form 10-Q for the period ended
     September 30, 1997.

11   Filed  previously  as an exhibit to Form 10-Q for the period  ended
     March 31, 1998.

12   Filed  previously  as an exhibit  to Form 10-Q for the period  ended
     June 30, 1998.

13   Filed  previously as an exhibit to Form 10-K for the year ended
     December 31, 1998.

14   Filed previously as an exhibit to Form 10-Q for the period ended
     June 30, 1999.

15   Filed previously as an exhibit to Form 10-Q for the period ended
     September 30, 1999.

16   Filed previously as an exhibit to Form 10-K for the year ended
     December 31, 1999.

17   Filed previously as an exhibit to Form 10-Q for the period ended
     March 31, 2000.

18   Filed previously as an exhibit to Form 10-Q for the period ended
     June 30, 2000.

19   Filed previously as an exhibit to Form 8-K dated September 20, 2000.

20   Filed previously as an exhibit to Form 8-K/A dated September 20, 2000.


                                       43

<PAGE>


         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE



                                                                         Page

HANSEN NATURAL CORPORATION AND SUBSIDIARIES


Independent Auditors' Report                                              F-2


Consolidated Balance Sheets as of December 31, 2000 and 1999              F-3


Consolidated Statements of Income for the years ended
December 31, 2000, 1999 and 1998                                          F-4


Consolidated Statements of Shareholders' Equity for the years
ended December 31, 2000, 1999 and 1998                                    F-5


Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998                                          F-6


Notes to Consolidated Financial Statements for the years ended

December 31, 2000, 1999 and 1998                                          F-8


Valuation and Qualifying Accounts for the years ended
December 31, 2000, 1999 and 1998                                         F-19




<PAGE>





INDEPENDENT AUDITORS' REPORT



The Board of Directors and Shareholders
Hansen Natural Corporation
Corona, California



We have audited the accompanying  consolidated  balance sheets of Hansen Natural
Corporation and  subsidiaries  (the "Company") as of December 31, 2000 and 1999,
and the related consolidated statements of income, shareholders' equity and cash
flows for the years ended  December  31,  2000,  1999 and 1998.  Our audits also
included the financial  statement schedule listed in Item 14. These consolidated
financial  statements and financial statement schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated  financial statements and financial statement schedule based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial  position of Hansen Natural  Corporation  and
subsidiaries as of December 31, 2000 and 1999, and the  consolidated  results of
its operations  and cash flows for the years ended  December 31, 2000,  1999 and
1998 in conformity with accounting  principles  generally accepted in the United
States of America. Also, in our opinion, such financial statement schedule, when
considered  in  relation to the  consolidated  financial  statements  taken as a
whole,  presents  fairly,  in all material  respects,  the information set forth
therein.




/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California
March 23, 2001



<PAGE>

<TABLE>
<CAPTION>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2000 AND 1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                     <C>

                                                                                            2000                    1999
                                                                                          --------                --------
                                     ASSETS

CURRENT ASSETS:
Cash and cash equivalents                                                            $        130,665        $      2,009,155
Accounts receivable (net of allowance for doubtful
    accounts, sales returns and cash discounts of $486,462
    in 2000 and $415,305 in 1999 and promotional allowances
    of $2,583,088 in 2000 and $1,651,604 in 1999)                                           6,584,486               3,751,258
Inventories, net (Note 3)                                                                  10,907,895               9,894,414
Prepaid expenses and other current assets (Note 4)                                            823,387                 553,689
Deferred income tax asset (Note 8)                                                            881,618                 743,364
                                                                                     -----------------       -----------------
    Total current assets                                                                   19,328,051              16,951,880
                  
PROPERTY AND EQUIPMENT, net (Note 5)                                                        1,863,044                 504,191

INTANGIBLE AND OTHER ASSETS:
Trademark license and trademarks (net of accumulated amortization
    of $3,366,358 in 2000 and $2,995,285 in 1999)                                          16,887,914              10,768,493
Deposits and other assets                                                                     665,731                 484,388
                                                                                     -----------------       -----------------
                                                                                           17,553,645              11,252,881
                                                                                     -----------------       -----------------
                                                                                     $     38,744,740        $     28,708,952
                                                                                     =================       =================

                        LIABILITIES AND SHAREHOLDERS' EQUITY


CURRENT LIABILITIES:
Accounts payable                                                                     $      3,681,956        $      5,936,873
Accrued liabilities                                                                           607,443                 345,794
Accrued compensation                                                                          281,629                 462,285
Current portion of long-term debt (Note 6)                                                    234,655                 863,501
Income taxes payable (Note 8)                                                                 878,266                 346,636
                                                                                     -----------------       -----------------
    Total current liabilities                                                               5,683,949               7,955,089

LONG-TERM DEBT, less current portion (Note 6)                                               9,731,956                 902,716

DEFERRED INCOME TAX LIABILITY (Note 8)                                                      1,274,139               1,225,271

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY: (Note 9)
Common stock - $0.005 par value; 30,000,000 shares
    authorized; 10,148,882 shares issued, 9,942,121 outstanding
    in 2000; 10,010,084 issued and outstanding in 1999                                         50,744                  50,050
Additional paid-in capital                                                                 11,667,619              11,340,074
Retained earnings                                                                          11,150,878               7,235,752
Common stock in treasury, at cost; 206,761 and 0 shares
    in 2000 and 1999, respectively                                                           (814,545)
                                                                                     -----------------       -----------------
    Total shareholders' equity                                                             22,054,696              18,625,876
                                                                                     -----------------       -----------------
                                                                                     $     38,744,740        $     28,708,952
                                                                                     =================       =================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>


<TABLE>
<CAPTION>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                      <C>                      <C>

                                                                      2000                     1999                     1998        
                                                                    --------                 --------                 --------   


NET SALES                                                          $ 79,732,709             $ 72,303,186             $ 53,866,294

COST OF SALES                                                        42,646,677               38,776,532               27,332,028
                                                            --------------------     --------------------     --------------------
GROSS PROFIT                                                         37,086,032               33,526,654               26,534,266

OPERATING EXPENSES:                                                                                                                 
Selling, general and administrative                                  29,814,609               25,337,374               20,217,818
Amortization of trademark license and trademarks                        371,073                  307,823                  296,584
Other operating expenses                                                                         380,378                   60,000
                                                            --------------------     --------------------     --------------------

     Total operating expenses                                        30,185,682               26,025,575               20,574,402 
                                                            --------------------     --------------------     --------------------

OPERATING INCOME                                                      6,900,350                7,501,079                5,959,864

NONOPERATING EXPENSE (INCOME):
Interest and financing expense                                          382,152                  170,506                  387,446
Interest income                                                         (12,914)                (118,413)                 (72,352)
Other nonoperating expense                                                                                                 14,719
                                                            --------------------     --------------------     --------------------

     Net nonoperating expense                                           369,238                   52,093                  329,813

                                                            --------------------     --------------------     --------------------
INCOME BEFORE PROVISION
     FOR INCOME TAXES                                                 6,531,112                7,448,986                5,630,051

PROVISION FOR INCOME TAXES (Note 8)                                   2,615,986                2,971,118                2,066,922
                                                            --------------------     --------------------     --------------------

NET INCOME                                                         $  3,915,126             $  4,477,868             $  3,563,129 
                                                            ====================     ====================     ====================


NET INCOME PER COMMON SHARE:
     Basic                                                               $ 0.39                   $ 0.45                   $ 0.38
                                                            ====================     ====================     ====================
     Diluted                                                             $ 0.38                   $ 0.43                   $ 0.34
                                                            ====================     ====================     ====================


NUMBER OF COMMON SHARES USED
     IN PER SHARE COMPUTATIONS:
     Basic                                                            9,957,743                9,964,778                9,386,688
                                                            ====================     ====================     ====================
     Diluted                                                         10,405,703               10,510,604               10,430,727
                                                            ====================     ====================     ====================
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>


<TABLE>
<CAPTION>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
-----------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>           <C>         <C>            <C>             <C>          <C>          <C>

                                                                          Retained
                                                          Additional      earnings                                     Total
                                    Common stock            paid-in     (accumulated         Treasury stock        shareholders'
                               ------------------------                                 -------------------------
                                 Shares       Amount        capital       deficit)        Shares       Amount          equity
                               ------------  ----------  -------------- --------------  -----------  ------------ -----------------

Balance,
   January 1, 1998               9,130,869    $ 45,654    $ 10,858,315     $  (943,190)          -     $ -            $  9,960,779

Issuance of common stock           781,036       3,906          72,051                                                      75,957

Compensation expense related
   to issuance of nonqualified
   stock options                                                                64,919                                      64,919

Reduction of tax liability in
   connection with the exercise
   of certain stock options                                    277,399                                                     277,399

Net income                                                                   3,563,129                                   3,563,129
                               ------------  ----------  -------------- --------------- -----------  ------------ -----------------

Balance,
   December 31, 1998             9,911,905      49,560      11,207,765       2,684,858           -             -        13,942,183

Issuance of common stock            98,179         490          38,331                                                      38,821

Compensation expense related to
  issuance of nonqualified
  stock options                                                                 73,026                                      73,026

Reduction of tax liability in
  connection with the exercise
  of certain stock options                                      93,978                                                      93,978

Net income                                                                   4,477,868                                   4,477,868
                               ------------  ----------  -------------- --------------- -----------  ------------ -----------------

Balance,
   December 31, 1999            10,010,084      50,050      11,340,074       7,235,752           -             -        18,625,876

Issuance of common stock           138,798         694         255,945                                                     256,639

Purchase of treasury stock                                                                (206,761)     (814,545)         (814,545)

Reduction of tax liability in
  connection with the exercise
  of certain stock options                                      71,600                                                      71,600

Net income                                                                   3,915,126                                   3,915,126
                               ------------  ----------  -------------- --------------- -----------  ------------ -----------------

Balance,
   December 31, 2000            10,148,882    $ 50,744    $ 11,667,619    $ 11,150,878    (206,761)    $(814,545)     $ 22,054,696
                               ============  ==========  ============== =============== ===========  ============ =================
</TABLE>


         See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>


<TABLE>
<CAPTION>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                <C>               <C>

                                                                                     2000               1999              1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                     $     3,915,126    $     4,477,868   $     3,563,129
Adjustments to reconcile net income to
   net cash (used in) provided by operating activities:
      Amortization of trademark license and trademarks                                 371,073            307,824           296,584
      Depreciation and other amortization                                              314,662            258,343           246,494
      Loss on disposal of plant and equipment                                           52,786             15,569               317
      Compensation expense related to issuance of stock options                              -             73,026            64,919
      Deferred income taxes                                                            (89,386)           (75,554)          557,461
      Effect on cash of changes in operating assets and liabilities:
        Accounts receivable                                                         (2,833,228)        (1,912,674)         (285,813)
        Inventories                                                                 (1,013,481)        (4,683,337)       (1,295,094)
        Prepaid expenses and other current assets                                     (269,698)          (309,371)          (29,850)
        Accounts payable                                                            (2,254,917)         4,066,620          (324,947)
        Accrued liabilities                                                            261,649            (58,070)          (84,943)
        Accrued compensation                                                          (180,656)           (13,716)          153,887
        Income taxes payable                                                           603,230           (828,571)        1,508,784
                                                                               ----------------   ----------------  ----------------
           Net cash (used in) provided by operating activities                      (1,122,840)         1,317,957         4,370,928

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                                 (1,191,762)          (258,543)         (435,838)
Proceeds from sale of property and equipment                                            12,433             81,963
Increase in trademark license and trademarks                                        (6,490,494)        (1,072,900)          (91,885)
Decrease in note receivable from director                                                                  20,861            39,391
Increase in deposits and other assets                                                 (181,343)          (272,485)          (26,821)
                                                                               ----------------   ----------------  ----------------
           Net cash used in investing activities                                    (7,851,166)        (1,501,104)         (515,153)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on long-term debt                                                         9,204,471            431,250
Principal payments on long-term debt                                                (1,551,049)        (2,072,818)         (520,874)
Issuance of common stock                                                               256,639             27,781            75,957
Purchases of common stock, held in treasury                                           (814,545)
                                                                               ----------------   ----------------  ----------------
           Net cash provided by (used in) financing activities                       7,095,516         (1,613,787)         (444,917)

                                                                               ----------------   ----------------  ----------------
NET (DECREASE) INCREASE IN CASH                                                     (1,878,490)        (1,796,934)        3,410,858
CASH AND CASH EQUIVALENTS, beginning of year                                         2,009,155          3,806,089           395,231
                                                                               ----------------   ----------------  ----------------
CASH AND CASH EQUIVALENTS, end of year                                         $       130,665    $     2,009,155   $     3,806,089
                                                                               ================   ================  ================

SUPPLEMENTAL INFORMATION
Cash paid during the year for:
      Interest                                                                 $       315,876    $       184,891   $       372,256
                                                                               ================   ================  ================
      Income taxes                                                             $     2,067,337    $     3,908,586   $         2,400
                                                                               ================   ================  ================
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-6

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
--------------------------------------------------------------------------------


NONCASH TRANSACTIONS:
      During 2000,  the Company  entered into capital leases of $546,972 for the
        acquisition of promotional vehicles.
      During  2000,   the  Company  reduced  its  tax  liability  and  increased
        additional  paid-in  capital in the amount of $71,600 in connection with
        the exercise of certain stock options.
      During 2000, the Company issued 15,360 shares of common stock to employees
        in connection  with a net exercise of options to purchase  23,327 shares
        of common stock.
      During 2000, the Company issued 7,786 shares of common stock to a director
        in connection  with a net exercise of options to purchase  12,000 shares
        of common stock.
      During  2000,  the  Company  issued  5,652  shares  of  common  stock to a
        non-employee  in  connection  with a net exercise of options to purchase
        10,000 shares of common stock.

      During  1999,  the  Company   reduced  its  tax  liability  and  increased
        additional  paid-in  capital in the amount of $93,978 in connection with
        the exercise of certain stock options.
      During 1999, the Company issued 72,866 shares of common stock to employees
        in connection  with a net exercise of options to purchase  93,273 shares
        of common stock.
      During  1999,  the  Company  issued  8,000  shares of  common  stock to an
        employee in connection  with the  execution of a note  receivable in the
        amount of $11,040.

      During  1998,  the  Company   reduced  its  tax  liability  and  increased
           additional  paid-in  capital in the amount of $277,399 in  connection
           with the exercise of certain stock options.
      During 1998,  the Company  issued  554,732  shares of common  stock to two
           officers  in  connection  with a net  exercise of options to purchase
           725,000 shares of common stock.
      During 1998,  the  Company  issued  138,900  shares  of  common  stock  to
           employees in connection  with the net exercise of options to purchase
           99,167 shares of common stock.
      During 1998,  the  Company  issued  71,137  shares  of  common  stock to a
           non-employee in connection with a net exercise of options to purchase
           100,000 shares of common stock.





          See accompanying notes to consolidated financial statements.

                                      F-7

<PAGE>
                                                   
HANSEN NATURAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization - Hansen Natural  Corporation  (the "Company" or "Hansen")
         was  incorporated  in  Delaware  on April 25,  1990.  The  Company is a
         holding company and carries on no operating business except through its
         direct wholly-owned subsidiaries, Hansen Beverage Company ("HBC") which
         was  incorporated  in  Delaware  on June 8,  1992 and  Hard e  Beverage
         Company ("HEB")  formerly known as Hard Energy Company,  and previously
         known as CVI  Ventures,  Inc.,  which was  incorporated  in Delaware on
         April  30,  1990.  HBC  conducts  the vast  majority  of the  Company's
         operating  business and  generates  substantially  all of the Company's
         operating  revenues.  During the third  quarter of 2000,  the  Company,
         through HEB, introduced a malt-based drink called Hard e which contains
         up to  five-percent  alcohol.  The Hard e product is not marketed under
         the Hansen's name.  References herein to "Hansen" or the "Company" when
         used to describe the operating  business of the Company are  references
         to the business of HBC unless otherwise indicated and references herein
         to HEB  when  used to  describe  the  operating  business  of HEB,  are
         references  to the  Hard e  brand  business  of  HEB  unless  otherwise
         indicated.

         In addition, HBC, through its wholly-owned subsidiary, Blue Sky Natural
         Beverage  Co.  ("Blue  Sky"),  which was  incorporated  in  Delaware on
         September 8, 2000,  acquired full ownership of and operates the natural
         soda business previously  conducted by Blue Sky Natural Beverage Co., a
         New Mexico corporation ("BSNBC"), under the Blue Sky(R) trademark (Note
         2).

         Nature of  Operations - Hansen is engaged in the business of marketing,
         selling and  distributing  so-called  "alternative"  beverage  category
         natural  sodas,  fruit  juices,  fruit  juice  Smoothies,   "functional
         drinks",  non-carbonated  ready-to-drink iced teas, lemonades and juice
         cocktails,  children's  multi-vitamin  juice  products  and still water
         under  the  Hansen's(R)  brand  name as well as  nutritional  bars  and
         cereals also under the Hansen's(R) brand name,  natural sodas under the
         Blue  Sky(R)  brand name and malt based  drinks  under the Hard e brand
         name,  primarily in certain  Western  states as well as in other states
         and, on a limited basis, in other countries outside the United States.

         Principles of Consolidation - The accompanying  consolidated  financial
         statements  include  the  accounts  of  Hansen  and  its  wholly  owned
         subsidiaries,  HBC,  HEB and Blue Sky since their  respective  dates of
         incorporation.  All intercompany  balances and  transactions  have been
         eliminated in consolidation.

         Reclassifications  -  Certain  reclassifications  have been made in the
         consolidated financial statements to conform to the 2000 presentation.

         Cash and Cash  Equivalents  - The  Company  considers  certificates  of
         deposit with original maturities of three months or less to be cash and
         cash equivalents.

         Inventories  -  Inventories  are  valued  at  the  lower  of  first-in,
         first-out (FIFO) cost or market value (net realizable value).

         Property  and  Equipment - Property and  equipment  are stated at cost.
         Depreciation of furniture, office equipment,  equipment and vehicles is
         based on their  estimated  useful  lives  (three to seven years) and is
         calculated using the  straight-line  method.  Amortization of leasehold
         improvements is based on the lesser of their estimated  useful lives or
         the  terms  of  the  related   leases  and  is  calculated   using  the
         straight-line method.

                                      F-8

<PAGE>

         Trademark  License and  Trademarks - Trademark  license  represents the
         Company's exclusive  world-wide right to use the Hansen's(R)  trademark
         in connection with the manufacture, sale and distribution of carbonated
         beverages and waters,  shelf stable fruit juices and drinks  containing
         fruit juices on a royalty free basis and other non-carbonated beverages
         and  water  and  non-beverage  products  in  consideration  of  royalty
         payments.  In  September  1999,  HBC  entered  into an  Assignment  and
         Agreement  with the Fresh Juice Company of  California,  Inc.  ("FJC"),
         pursuant to which HBC acquired  exclusive  ownership of the Hansen's(R)
         trademark  and trade names.  The Company also owns in its own right,  a
         number of other  trademarks in the United States as well as in a number
         of countries  around the world.  The Company  amortizes  its  trademark
         license and trademarks over 40 years.

         Long-Lived  Assets  - The  Company  accounts  for  the  impairment  and
         disposition  of  long-lived  assets in  accordance  with  Statement  of
         Financial  Accounting  Standard  ("SFAS") No. 121,  Accounting  for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to Be
         Disposed Of. In accordance with SFAS No. 121,  long-lived  assets to be
         held are reviewed for events or changes in circumstances  that indicate
         that  their  carrying  value  may  not  be  recoverable.   The  Company
         periodically  reviews  the  carrying  value  of  long-lived  assets  to
         determine  whether or not impairment to such value has occurred.  As of
         December  31,  2000,  management  does not believe  that the  Company's
         long-lived assets have been impaired.

         Revenue  Recognition  - The  Company  records  revenue  at the time the
         related products are shipped. Management believes an adequate provision
         against net sales has been made for estimated  returns,  allowances and
         cash discounts.

         Freight Costs And  Reimbursement  Of Freight Costs - In accordance with
         Emerging  Issues Task Force No.  00-10,  Accounting  for  Shipping  and
         Handling Fees and Costs, reimbursements of freight charges are recorded
         in net sales in the accompanying consolidated statements of income. For
         the years ended December 31, 2000,  1999, and 1998,  freight-out  costs
         amounted to $4.9 million, $4.3 million, and $3.0 million, respectively,
         and have been recorded in selling,  general and administrative expenses
         in the accompanying consolidated statements of income.

         Advertising - The Company accounts for advertising  production costs by
         expensing such production costs the first time the related  advertising
         takes  place.  Advertising  expenses  included in selling,  general and
         administrative expenses amounted to $5.6 million, $5.7 million and $4.3
         million  for  the  years  ended  December  31,  2000,  1999  and  1998,
         respectively.   In  addition,   the  Company  supports  its  customers,
         including distributors, with promotional allowances, a portion of which
         is utilized for indirect  advertising by them.  Promotional  allowances
         amounted to $8.3  million,  $6.3 million and $5.6 million for the years
         ended December 31, 2000, 1999 and 1998, respectively.

         Net Income Per Common Share - In accordance with SFAS No. 128, Earnings
         per Share,  net income per common share,  on a basic and diluted basis,
         is presented for all periods. Basic net income per share is computed by
         dividing net income by the  weighted  average  number of common  shares
         outstanding.  Diluted net income per share is computed by dividing  net
         income by the weighted  average  number of common and  dilutive  common
         equivalent  shares  outstanding,  if dilutive.  Weighted average common
         equivalent  shares include stock options and purchases of the Company's
         common stock, held in treasury, using the treasury stock method.

         Concentration   Risk  -  Certain  of  the  Company's  products  utilize
         components from a limited number of sources. A disruption in production
         of such components could  significantly  affect the Company's  revenues
         from those products,  as alternative sources of such components may not
         be available at  commercially  reasonable  rates or within a reasonably
         short time  period.  The Company  continues to take steps on an ongoing
         basis to  secure  the  availability  of  alternative  sources  for such
         components and minimize the risk of any disruption in production.

                                      F-9

<PAGE>

         One  customer  accounted  for  approximately  23%,  25%  and 27% of the
         Company's  sales for the years ended December 31, 2000,  1999 and 1998,
         respectively.  A decision  by that,  or any other  major  customer,  to
         decrease the amount purchased from the Company or to cease carrying the
         Company's  products  could  have  a  material  adverse  effect  on  the
         Company's financial condition and consolidated results of operations.

         Credit Risk - The Company sells its products  nationally,  primarily to
         retailers  and  beverage  distributors.  The Company  performs  ongoing
         credit  evaluations  of its customers  and  generally  does not require
         collateral. The Company maintains reserves for potential credit losses,
         and such losses have been within management's expectations.

         Fair Value of Financial  Instruments - SFAS No. 107,  Disclosures about
         Fair Value of Financial  Instruments,  requires  management to disclose
         the estimated fair value of certain assets and  liabilities  defined by
         SFAS No. 107 as financial instruments. At December 31, 2000, management
         believes  that the carrying  amount of cash,  accounts  receivable  and
         accounts  payable  approximate fair value because of the short maturity
         of these financial instruments. Long-term debt bears interest at a rate
         comparable  to the  prime  rate;  therefore,  management  believes  the
         carrying  amount for the  outstanding  borrowings at December 31, 2000,
         approximates fair value.

         Use  of  Estimates  - The  preparation  of the  consolidated  financial
         statements in conformity with generally accepted accounting  principles
         requires  management to make estimates and assumptions  that affect the
         reported amounts of assets and liabilities and disclosure of contingent
         assets and liabilities at the date of the financial  statements and the
         reported amounts of revenues and expenses during the reporting  period.
         Actual results could differ from those estimates.

         New Accounting  Pronouncements - In June 1998, the Financial Accounting
         Standards   Board  issued  SFAS  No.  133,  Accounting  for  Derivative
         Instruments  and  Hedging   Activities.   SFAS  No.  133,  as  amended,
         establishes   accounting  and  reporting   standards   for   derivative
         instruments, including certain derivative instruments embedded in other
         contracts and for hedging activities.     Under SFAS No.  133,  certain
         contracts  that were not formerly considered  derivatives many now meet
         the  definition of a derivative.  SFAS No. 133 requires  derivatives to
         be  reported  as assets or liabilities at fair  value, and is effective
         for all  fiscal  years beginning  after June 15,  2000.    The  Company
         will adopt SFAS No. 133 effective  January  1,  2001.  Management  does
         not  expect  the  adoption   of  SFAS  No.  133 to  have  a significant
         impact on the financial  position,  results of operations or cash flows
         of the Company.

         In December 1999, the Securities Exchange Commission staff issued Staff
         Accounting   Bulletin  No.  101,   Revenue   Recognition  in  Financial
         Statements  ("SAB No.  101").  SAB No.  101  summarizes  certain of the
         staff's views in applying accounting  principles  generally accepted in
         the United States of America to revenue  recognition and accounting for
         deferred  costs  in  the  consolidated   financial  statements  and  is
         effective no later than the fourth  quarter of fiscal  years  beginning
         after  December  15,  1999.  Based  on the  Company's  current  revenue
         recognition  policy,  there was no  material  impact  to the  Company's
         financial  position  and  consolidated  statements  of income  from the
         adoption of SAB No. 101.

2.       ACQUISITION

         On September 20, 2000,  the Company  acquired  through its  subsidiary,
         Blue Sky, the  beverage  business of BSNBC,  including  the Blue Sky(R)
         trademarks  and  certain  other  assets  for a  purchase  price of $6.5
         million.  The Blue  Sky(R)  products  include  a range  of  all-natural
         carbonated  sodas and seltzers that are marketed  throughout the United
         States and in certain international markets,  principally to the health
         food trade.  The  acquisition  has been  accounted for as a purchase in
         accordance  with Accounting  Principles  Board Opinion No. 16, Business
         Combinations.  Accordingly,  the purchase  price,  inclusive of certain
         acquisition  costs, was allocated to the tangible and intangible assets
         acquired  based on a valuation of their  respective  fair values at the
         date  of  acquisition.   The  purchase  price,   inclusive  of  certain
         acquisition  costs,  was financed through the Company's credit facility
         (Note 6).

                                      F-10

<PAGE>

         Trademarks  acquired will be amortized on a straight-line basis over 40
         years.  The  operating  results of Blue Sky have been  included  in the
         Company's results of operations since the date of acquisition.

3.       INVENTORIES

         Inventories consist of the following at December 31:

                                              2000                 1999
                                            --------             --------
         Raw materials                    $ 4,704,363          $ 3,615,269
         Finished goods                     6,371,941            6,442,193
                                          ------------         ------------
                                           11,076,304           10,057,462
         Less inventory reserves             (168,409)            (163,048)
                                          ------------         ------------
                                          $10,907,895          $ 9,894,414
                                          ============         ============

4.       PREPAID EXPENSES AND OTHER CURRENT ASSETS

         In January 1994,  the Company  entered into an agreement  with a barter
         company for the exchange of certain  inventory  for future  advertising
         and  marketing  credits.  The  Company  assigned a value of $490,000 to
         these  credits  based  on the net  realizable  value  of the  inventory
         exchanged.  As of December 31, 2000,  unused  advertising and marketing
         credits totaled  $111,000.  Although such credits remain  available for
         use by the  Company  through  January  2002,  management  was unable to
         estimate  their  remaining net  realizable  value at December 31, 1997.
         Accordingly,  in the year ended  December 31, 1997,  the Company  fully
         reserved against and expensed such advertising and marketing credits.

5.       PROPERTY AND EQUIPMENT

         Property and equipment consist of the following at December 31:

                                                 2000                  1999
                                               --------              --------  
         Leasehold improvements             $   153,812            $    61,277
         Furniture and office equipment         662,481                546,105
         Equipment and vehicles               1,555,008                768,576
         Machinery in progress                  569,432
                                           --------------         --------------
                                              2,940,773              1,375,958
         Less accumulated depreciation 
            and amortization                 (1,077,689)              (871,767)
                                          ---------------         --------------
                                            $ 1,863,044            $   504,191
                                          ===============         ==============

6.       LONG-TERM DEBT

         In  1997,  the  Company   obtained  a  credit  facility  from  Comerica
         Bank-California ("Comerica"),  consisting of a revolving line of credit
         of up to $3.0 million in aggregate at any time  outstanding  and a term
         loan of $4.0 million.  The  utilization of the revolving line of credit
         by  HBC  was  dependent  upon  certain  levels  of  eligible   accounts
         receivable  and inventory  from time to time.  Such  revolving  line of
         credit  and term  loans  were  secured  by  substantially  all of HBC's
         assets, including accounts receivable, inventory, trademarks, trademark
         licenses and certain equipment. That facility was subsequently modified
         from time to time and on September 19, 2000, the Company entered into a
         modification  agreement with Comerica to amend certain provisions under
         the above facility in order to finance the  acquisition of the Blue Sky
         business,  repay the term loan, and provide  additional working capital
         ("Modification Agreement"). Pursuant to the Modification Agreement, the

                                      F-11

<PAGE>
         revolving  line of credit was increased to $12.0  million,  reducing to
         $6.0 million by September 2004. The revolving line of credit remains in
         full force and effect  through  September  2005.  Further,  the rate of
         interest  payable by the Company on  advances  under the line of credit
         are based on bank's base (prime) rate, plus an additional percentage of
         up to 0.5% or the LIBOR rate,  plus an  additional  percentage of up to
         2.5%,  depending upon certain financial ratios of the Company from time
         to time.

         The initial use of proceeds under the Modification Agreement was to pay
         the seller in connection with the acquisition of the Blue Sky business,
         to repay the remaining  $807,000 balance due under the term loan and to
         finance working capital.  The Company's  outstanding  borrowings on the
         line of credit at December 31, 2000 were $9.2 million.

         The credit  facility  contains  financial  covenants  which require the
         Company to maintain certain financial ratios and achieve certain levels
         of annual  income.  The facility  also contains  certain  non-financial
         covenants. At December 31, 2000 and 1999, respectively, the Company was
         in compliance with all covenants.

         During the year ended  December  31,  2000,  the Company  entered  into
         capital  leases for  acquisition  of certain  vehicles,  payable over a
         five-year  period and having an  effective  interest  rate of 8.8%.  At
         December 31, 2000,  the assets  acquired under capital leases had a net
         book value of $519,688, net of accumulated depreciation of $66,819.

         Long-term debt consists of the following at December 31:

<TABLE>
<S>                                                                             <C>                   <C>

                                                                                      2000                  1999
                                                                                    --------              --------
        Line  of  credit  to  Comerica,   collarteralized   by   substantially
        all   of   HBC's   assets,   at  an   effective   interest   rate   of
        9.5% as of  December 31, 2000                                               $9,164,884          $     -

        Note payable to Comerica,  collateralized  by substantially all of HBC's
        assets, payable in variable amounts of principal and interest
        which escalate over time. Note was repaid during 2000                                             1,331,881

        Note  payable in  connection  with the  acquisition  of the  Hansen's(R)
        trademark and trade name, payable in three equal annual  installments of
        $143,750 each, due between August 2, 2000 and August 2, 2000                   287,500              431,250
        
        Capital leases,  collateralized  by vehicles  acquired,  payable over 60
        months in monthly  installments  at an effective  interest rate of 8.8%,
        with final payments ending in 2005                                             514,227

        Other                                                                                                 3,086
                                                                                ------------------    ------------------
                                                                                     9,966,611            1,766,217
        Less: current portion of long-term debt                                       (234,655)            (863,501)
                                                                                ------------------    ------------------
                                                                                    $9,731,956          $   902,716
                                                                                ==================    ==================
</TABLE>


                                      F-12


<PAGE>


          Long-term debt is payable as follows:

               Year ending December 31:
               2001                                             $   234,655
               2002                                                 242,502
               2003                                                 107,316
               2004                                               1,481,545
               2005                                               1,900,593
               Thereafter                                         6,000,000
                                                                ------------
                                                                $ 9,966,611
                                                                ============

         Interest  expense  amounted to $380,651,  $168,131 and  $368,896,  for
         the years ended  December 31, 2000, 1999 and 1998, respectively.

7.       COMMITMENTS AND CONTINGENCIES

         Operating  Leases - The  Company's  warehouse  facility  and  corporate
         offices are leased for a period of 10 years from October 20, 2000, when
         the Company first occupied the facility. The facility lease and certain
         equipment and other  non-cancelable  operating  leases  expire  through
         2010.  The  facility  lease  has  scheduled  rent  increases  which are
         accounted for on a straight-line  basis. Rent expense under such leases
         amounted  to  $416,505,  $391,000  and  $369,000  for the  years  ended
         December 31, 2000, 1999 and 1998, respectively.

         Future  minimum  rental  payments at December 31, 2000 under the leases
         referred to above are as follows:

              Year ending December 31:
              2001                                       $   605,779
              2002                                           602,179
              2003                                           623,367
              2004                                           629,256
              2005                                           637,059
              Thereafter                                   3,199,953
                                                         ------------
                                                         $ 6,297,593
                                                         ============

         Employment  and  Consulting  Agreements  - The Company  entered into an
         employment  agreement with Rodney C. Sacks dated as of January 1, 1999,
         pursuant  to which Mr.  Sacks  renders  services  to the Company as its
         Chairman and Chief  Executive  Officer,  and entered into an employment
         agreement  with  Hilton H.  Schlosberg  dated as of  January  1,  1999,
         pursuant to which Mr. Schlosberg renders services to the Company as its
         Vice Chairman, President and Chief Financial Officer for an annual base
         salary  of  $180,000  each,  increasing  by a  minimum  of 8% for  each
         subsequent  twelve-month  period during the employment period,  plus an
         annual bonus in an amount  determined at the discretion of the Board of
         Directors  of the Company and certain  fringe  benefits  for the period
         commencing  January 1, 1999 and ending  December 31,  2003.  After such
         date,  such  agreements  provide for automatic  annual  renewals unless
         written  notice is  delivered  to each of them by June 30,  2003 or any
         subsequent June 30 thereafter.

         Purchase  Commitments  - As of December 31, 2000,  the Company had open
         long-term   purchase   commitments   for   certain   raw  materials  of
         approximately $814,000.

         Litigation  - The Company is subject to, and  involved  in,  claims and
         contingencies  related to lawsuits and other matters arising out of the
         normal course of business.  The ultimate liability associated with such
         claims  and  contingencies,  if any,  is not  likely to have a material
         adverse effect on the financial condition of the Company.

                                      F-13

<PAGE>

8.       INCOME TAXES

         The Company  accounts for income taxes under the  provision of SFAS No.
         109,   Accounting  for  Income  Taxes.  This  statement   requires  the
         recognition  of  deferred  tax  assets and  liabilities  for the future
         consequences  of  events  that have been  recognized  in the  Company's
         financial statements or tax returns.  Measurement of the deferred items
         is based on enacted tax laws. In the event the future  consequences  of
         differences  between  financial  reporting  bases  and tax bases of the
         Company's assets and liabilities  result in a deferred tax asset,  SFAS
         No. 109  requires an  evaluation  of the  probability  of being able to
         realize  the future  benefits  indicated  by such  asset.  A  valuation
         allowance  related to a deferred tax asset is recorded  when it is more
         likely than not that some portion or all of the deferred tax asset will
         not be realized.

         Components of the income tax provision are as follows:

<TABLE>
<CAPTION>

                                                                           Year Ended December 31,
<S>                                                   <C>                     <C>                     <C>

                                                            2000                    1999                    1998
                                                          --------                --------                --------
         Current income taxes:                                                                         
         Federal                                         $2,106,316              $2,409,512             $1,180,688
         State                                              599,056                 637,160                328,773
                                                      ------------------      ------------------      -----------------
                                                          2,705,372               3,046,672              1,509,461
         Deferred income taxes:
         Federal                                            (57,309)                (97,681)               675,528
         State                                              (32,077)                 22,127                159,813
         Less change in valuation allowance                                                               (277,880)
                                                      ------------------      ------------------      -----------------
                                                            (89,386)                (75,554)               557,461
                                                      ------------------      ------------------      -----------------
                                                         $2,615,986              $2,971,118             $2,066,922
                                                      ==================      ==================      =================
</TABLE>



         The differences between the income tax provision that would result from
         applying the 34% federal  statutory rate to income before provision for
         income  taxes  and the  reported  provision  for  income  taxes  are as
         follows:

<TABLE>
<CAPTION>

                                                                       Year Ended December 31,
<S>                                                    <C>                 <C>                  <C>

                                                            2000                1999                 1998
                                                          --------            --------             --------
         Income tax provision using the statutory
             rate                                        $2,220,578          $2,532,655            $1,914,217
         State taxes, net of federal tax benefit            380,945             434,604               295,272
         Change in utilization of certain net
             operating losses                                                                         106,718
         Permanent differences                               31,865               3,859                 6,318
         Other                                              (17,402)                                   22,277
         Change in valuation allowance                                                               (277,880)
                                                       ----------------    ----------------     ---------------
                                                         $2,615,986          $2,971,118            $2,066,922
                                                       ================    ================     ===============
</TABLE>


                                      F-14


<PAGE>



         Major components of the Company's deferred tax assets  (liabilities) at
         December 31 are as follows:

<TABLE>
<S>                                                             <C>                  <C>

                                                                     2000                 1999
                                                                   --------             --------
        Reserves for returns                                    $   130,642          $   111,681
        Reserves for bad debts                                       51,910               45,192
        Reserves for obsolescence                                    72,146               69,850
        Reserves for marketing development fund                     221,319              159,327
        Capitalization of inventory costs                           136,284               72,670
        State franchise tax                                         243,328              267,189
        Accrued compensation                                         25,989               17,456
        Stock-based compensation                                                          59,096
        Amortization of trademark license                        (1,421,415)          (1,412,994)
        Amortization of graphic design                              151,844              124,664
        Depreciation                                                 (4,568)               3,962
                                                                ---------------      ---------------
                                                                $  (392,521)         $  (481,907)     
                                                                ===============      ===============
</TABLE>



         During the year ended December 31, 1999, the Company was audited by the
         Internal Revenue Service ("IRS Audit") for the years ended December 31,
         1998,  1997 and 1996.  Based on the  results of the IRS Audit,  certain
         deductions taken in certain years were postponed until later years. The
         effect thereof on the Company's provision for income taxes for the year
         ended December 31, 1999 was immaterial.

9.       STOCK OPTIONS AND WARRANTS

         The Company has two stock option plans,  the Employee Stock Option Plan
         ("the Plan") and the Outside  Directors  Stock Option Plan  ("Directors
         Plan").

         The Plan provided for the granting of options to purchase not more than
         2,000,000 shares of Hansen common stock to key employees of the Company
         and its  subsidiaries.  During  1999,  the Company  amended the Plan to
         provide for the  granting  of options to  purchase up to an  additional
         1,000,000  shares under the Plan. Stock options are exercisable at such
         time and in such amounts as determined by the Compensation Committee of
         the Board of  Directors  of the Company up to a ten-year  period  after
         their date of grant,  and no options may be granted after July 1, 2001.
         The  option  price will not be less than the fair  market  value at the
         date of grant. As of December 31, 2000,  options to purchase  2,150,200
         shares of Hansen common stock had been granted  under the Plan,  net of
         options that have expired,  and options to purchase  849,800  shares of
         Hansen common stock remain available for grant under the Plan.

         The Directors  Plan provides for the grant of options to purchase up to
         100,000  shares of common  stock of the  Company  to  directors  of the
         Company  who are  not  and  have  not  been  employed  by or  acted  as
         consultants to the Company and its  subsidiaries  or affiliates and who
         are not and have not been  nominated  to the Board of  Directors of the
         Company  pursuant  to a  contractual  arrangement.  On the  date of the
         annual  meeting  of  shareholders,  at which an  eligible  director  is
         initially  elected,  each  eligible  director  is entitled to receive a
         one-time  grant of an option to purchase 6,000 shares (12,000 shares if
         the director is serving on a committee  of the Board) of the  Company's
         common stock, exercisable one-third each on the first, second and third
         anniversary  of the date of  grant;  provided,  however,  that  options
         granted as of February 14, 1995, are exercisable 66 2/3% on the date of
         grant and 100% on July 8, 1995;  provided,  further,  that all  options
         held by an eligible  director become fully and immediately  exercisable
         upon a change in  control of the  Company.  Options  granted  under the
         Directors Plan that are not exercised  generally expire ten years after
         the date of grant.  Option grants may be made under the Directors  Plan
         for ten  years  from the  effective  date of the  Directors  Plan.  The
         Directors Plan is a "formula"  plan so that a  non-employee  director's

                                      F-15

<PAGE>
         participation  in the  Directors  Plan does not  affect his status as a
         "disinterested  person" (as defined in Rule 16b-3 under the  Securities
         Exchange Act of 1934).  As of December  31,  2000,  options to purchase
         36,000  shares  of  Hansen  common  stock  had been  granted  under the
         Directors  Plan and options to purchase  64,000 shares of Hansen common
         stock remained available for grant.

         For the years  ended  December  31,  2000,  1999 and 1998,  the Company
         granted  189,000,  424,000 and 297,500 options to purchase shares under
         the Plan and Directors Plan at a weighted average grant date fair value
         of  $2.26,  $2.52  and  $1.18,  respectively.   Additional  information
         regarding the Plan and the Directors Plan is as follows:


<TABLE>
<CAPTION>

                                                  2000                       1999                       1998
                                                --------                   --------                   --------
                                                       Weighted                   Weighted                  Weighted
                                                        average                   average                    average
                                                       exercise                   exercise                  exercise
                                           Shares        price        Shares       price       Shares         price
                                       -------------   ---------   -----------    ---------  -----------   ----------
<S>                                    <C>             <C>         <C>            <C>        <C>           <C>

             Options outstanding,                      
                beginning of year        1,093,327         $2.60     833,900         $1.49    1,475,500        $1.34
             Options granted               189,000         $4.15     424,000         $4.38      297,500        $2.04
             Options                       (38,327)        $1.49     (93,573)        $1.35     (919,900)       $1.49
             exercised
             Options canceled or                                                               
               expired                    (109,600)        $3.17     (71,000)        $1.82      (19,200)       $1.11
                                       -------------               -----------               ------------
             Options outstanding,                                               
                end of year              1,134,400         $2.84   1,093,327         $2.60      833,900        $1.49
                                       =============               ===========               ============

             Option price range                         $0.75 to                  $0.75 to                  $0.72 to
                end of year                               $5.25                     $5.25                     $4.50
</TABLE>

               

         The Company has adopted the disclosure-only provisions of SFAS No. 123,
         Accounting for Stock-Based Compensation.  Accordingly,  no compensation
         cost has been  recognized  for the stock  option  plans.  The impact of
         stock  options  granted  prior to 1997 has been  excluded  from the pro
         forma  calculation;  accordingly,  the  2000,  1999 and 1998 pro  forma
         adjustments are not indicative of future period pro forma  adjustments,
         when the  calculation  may apply to all applicable  stock options.  Had
         compensation  cost for the Company's option plans been determined based
         on the fair  value at the  grant  date for  awards  in the  years  1998
         through  2000  consistent  with the  provisions  of SFAS No.  123,  the
         Company's  net income and net income per common  share  would have been
         reduced to the pro forma amounts indicated below:


<TABLE>
<S>                                               <C>                 <C>                <C>

                                                    2000                1999                1998
         Net income, as reported                  $3,915,126          $4,477,868         $3,563,129
         Net income, pro forma                    $3,670,524          $4,176,799         $3,383,375

         Net income  per  common  share,
             as reported
            Basic                                      $0.39               $0.45              $0.38
            Diluted                                    $0.38               $0.43              $0.34

         Net income  per  common  share,
             pro forma
            Basic                                      $0.37               $0.42              $0.36
            Diluted                                    $0.35               $0.40              $0.32
</TABLE>


                                      F-16


<PAGE>



         The fair value of each option  grant is  estimated on the date of grant
         using  the  Black-Scholes   option-pricing  model  with  the  following
         weighted-average assumptions used for grants in:

<TABLE>
<S>              <C>              <C>                   <C>              <C>
                                                          Risk-Free
                 Dividend Yield   Expected Volatility   Interest Rate    Expected Lives
                 --------------   -------------------   -------------    --------------
         2000          0%                48%                  6.0%           6 years
         1999          0%                60%                  4.8%           5 years
         1998          0%                72%                  5.2%           4 years
</TABLE>



         The Company has granted  warrants to various  non-employees to purchase
         shares of Hansen common stock. Such warrants vest in various increments
         over an eighteen-month to three-year period.

         For the year ended  December  31,  1998,  the Company  granted  180,000
         warrants to purchase shares at a weighted average grant date fair value
         of $1.08.  No warrants  were  granted for the years ended  December 31,
         2000  and  1999,   respectively.   Additional   information   regarding
         non-employee stock options and warrants is as follows:


<TABLE>
<CAPTION>
                                                        2000                       1999                      1998
                                                      --------                   --------                  --------
                                                            Weighted                   Weighted                  Weighted
                                                             average                    average                   average
                                                            exercise                   exercise                  exercise
                                               Shares         price        Shares        price       Shares        price
                                             ------------ -----------  ------------ ------------ ------------ ------------
<S>                                          <C>          <C>          <C>          <C>          <C>          <C>
                                                          
        Options and warrants
          outstanding, beginning of year       137,000        $2.37        225,000       $2.29       145,000      $ 1.42
        Options and warrants granted                                                                 180,000      $ 2.48
        Options and warrants exercised        (117,000)       $2.48        (30,000)      $1.50      (100,000)     $ 1.38
        Options and warrants canceled  or
          expired                              (20,000)       $1.72        (58,000)      $2.50
                                             ------------              ------------              ------------
        Options and warrants outstanding,
          end of year                             -                        137,000       $2.37       225,000      $ 2.29
                                             ============              ============              ============

        Option and warrant price range,                                                $1.50 to                  $ 1.50 to
           end of year                                                                   $3.75                    $ 3.75
</TABLE>



         The following table  summarizes  information  about  fixed-price  stock
         options outstanding at December 31, 2000:

<TABLE>
<CAPTION>

                                                    Options Outstanding                          Options Exercisable
                                   ------------------------------------------------------- ---------------------------------
                                                          Weighted
                                        Number            average       Weighted average        Number          Weighted
                                    outstanding at       remaining          exercise        exercisable at       average
         Range of exercise prices  December 31, 2000    contractual           price        December 31, 2000    exercise
                                                      life (in years)                                             price
                                   ------------------ ----------------- ------------------ ------------------ --------------
<S>                                <C>                <C>               <C>                <C>                <C>    
             $0.75 to $1.13             264,000              2                $1.00             144,000           $0.98
             $1.59 to $1.79             280,400              2                $1.61             274,400           $1.61
             $2.50 to $3.72              73,000              5                $3.45               8,000           $3.72
             $4.19 to $4.38             357,000              4                $4.26              91,800           $4.25
             $4.44 to $5.25             160,000              5                $4.60              29,000           $4.56
                                     -----------                                               ---------
                                      1,134,400                                                 547,200
                                     ===========                                               =========
</TABLE>


                                      F-17


<PAGE>


10.      EMPLOYEE BENEFIT PLAN

         Employees of Hansen Natural  Corporation  may participate in the Hansen
         Natural  Corporation  401(k) Plan, a defined  contribution  plan, which
         qualifies   under  Section   401(k)  of  the  Internal   Revenue  Code.
         Participating employees may contribute up to 15% of their pretax salary
         up to statutory  limits.  The Company  contributes  25% of the employee
         contribution,   up  to  8%  of  each  employee's   earnings.   Matching
         contributions  were $49,323,  $37,274 and $29,438,  for the years ended
         December 31, 2000, 1999 and 1998, respectively.

11.      RELATED PARTY TRANSACTIONS

         A director  of the  Company  is a partner in a law firm that  serves as
         counsel to the Company.  Expenses  incurred to such firm in  connection
         with services  rendered to the Company  during the years ended December
         31,  2000,   1999  and  1998  were  $180,954,   $414,932  and  $173,673
         respectively.

         A director  of the Company was a  consultant  to the Company  from July
         1997  through  June  1999.   Expenses  incurred  to  such  director  in
         connection with consulting  services rendered to the Company during the
         years  ended  December  31,  1999 and 1998 were  $30,000  and  $60,000,
         respectively.

         Two  directors  of the Company are  principal  owners of a company that
         provides  promotional  materials to the Company.  Expenses  incurred to
         such company in connection with promotional  materials purchased during
         the years  ended  December  31,  2000,  1999 and 1998,  were  $115,520,
         $121,289 and $151,393, respectively.

12.      QUARTERLY FINANCIAL DATA (Unaudited)


<TABLE>
<CAPTION>
                                     Net               Gross                   Net             Net Income per Common Share
                                    Sales              Profit                 Income            Basic              Diluted
                               ----------------    ---------------        ---------------     -----------         ----------
<S>                            <C>                 <C>                    <C>                 <C>                 <C>              
      Quarter ended:
       March 31, 2000             $ 15,978,002       $  7,203,960            $   688,103        $0.07               $0.07
       June 30, 2000                22,666,775         10,691,928              1,652,087         0.17                0.16
       September 30, 2000           22,701,624         10,978,326              1,365,188         0.13                0.13
       December 31, 2000            18,386,308          8,211,818                209,748         0.02                0.02
                               ----------------    ---------------        ---------------     -----------         -----------
                                  $ 79,732,709       $ 37,086,032            $ 3,915,126        $0.39               $0.38
                               ================    ===============        ===============     ===========         ===========

      Quarter ended:
       March 31, 1999             $ 15,229,104       $  7,407,679            $   908,912        $0.09               $0.09
       June 30, 1999                19,142,247          8,980,540              1,440,190         0.15                0.14
       September 30, 1999           20,491,265          9,430,337              1,336,768         0.13                0.12    
       December 31, 1999            17,440,570          7,708,098                791,998         0.08                0.08
                               ----------------    ---------------        ---------------     -----------         -----------
                                  $ 72,303,186       $ 33,526,654            $ 4,477,868        $0.45               $0.43
                               ================    ===============        ===============     ===========         ===========
</TABLE>


         Certain  of  the  figures  reported  above  may  differ from previously
         reported figures for individual quarters due to rounding.

                                      F-18


<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>

                  Balance at           Charged to
                  beginning of          cost and                    Balance at end
Description       period                expenses     Deductions       of period
------------     ---------------     -------------  ------------   ----------------
<S>              <C>                 <C>            <C>            <C>  

Allowance for doubtful accounts, sales returns and cash discounts:

2000             $      415,305         2,171,731    (2,100,574)     $     486,462
1999             $      378,641         1,478,889    (1,442,225)     $     415,305
1998             $      315,629         1,432,404    (1,369,392)     $     378,641

Promotional allowances:

2000             $    1,651,604         8,295,866    (7,364,382)     $   2,583,088
1999             $    1,608,123         6,337,903    (6,294,422)     $   1,651,604
1998             $    1,067,749         5,584,000    (5,043,626)     $   1,608,123

Inventory reserves:

2000             $      163,048           249,067      (243,706)     $     168,409
1999             $      268,233           151,091      (256,276)     $     163,048
1998             $      383,227             4,027      (119,021)     $     268,233

</TABLE>


                                      F-19








EXHIBIT 23



INDEPENDENT AUDITORS' CONSENT


We consent to the  incorporation  by reference in  Registration  Statements  No.
33-92526,  No. 333-41333 and No. 333-89123 of Hansen Natural Corporation on Form
S-8 of our report dated March 23, 2001,  appearing in the Annual  Report on Form
10-K of Hansen Natural Corporation for the year ended December 31, 2000.



/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California
March 26, 2001







<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
This  schedule  contains  summary  financial   information  extracted  from  the
consolidated  balance sheets and consolidated  statements of operations found on
pages F-3 and F-4 of the Company's  Form 10-k for the year,  and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
       
<S>                                            <C>
<PERIOD-TYPE>                                  YEAR
<FISCAL-YEAR-END>                              DEC-31-2000
<PERIOD-START>                                 JAN-01-2000
<PERIOD-END>                                   DEC-31-2000
<CASH>                                            130,665
<SECURITIES>                                            0
<RECEIVABLES>                                   9,654,036
<ALLOWANCES>                                    3,069,550
<INVENTORY>                                    10,907,895
<CURRENT-ASSETS>                               19,328,051
<PP&E>                                          2,940,773
<DEPRECIATION>                                  1,077,689
<TOTAL-ASSETS>                                 38,744,740
<CURRENT-LIABILITIES>                           5,683,949
<BONDS>                                                 0
<PREFERRED-MANDATORY>                                   0
<PREFERRED>                                             0
<COMMON>                                           50,744
<OTHER-SE>                                     22,003,952
<TOTAL-LIABILITY-AND-EQUITY>                   38,744,740
<SALES>                                        79,732,709
<TOTAL-REVENUES>                               79,745,623
<CGS>                                          42,646,677
<TOTAL-COSTS>                                  30,185,682
<OTHER-EXPENSES>                                        0
<LOSS-PROVISION>                                        0
<INTEREST-EXPENSE>                                382,152
<INCOME-PRETAX>                                 6,531,112
<INCOME-TAX>                                    2,615,986
<INCOME-CONTINUING>                             3,915,126
<DISCONTINUED>                                          0
<EXTRAORDINARY>                                         0
<CHANGES>                                               0
<NET-INCOME>                                    3,915,126
<EPS-BASIC>                                        0.39
<EPS-DILUTED>                                        0.38
        


</TABLE>