UNITED STATES
                       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

                   For the fiscal year ended December 31, 2003

                                       OR

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

                  For the transition period from _____ to _____

                         Commission File Number 0-18761

                           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. [ ]

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

     The aggregate market value of the voting stock held by nonaffiliates of the
Registrant  was  $78,990,346  computed by  reference  to the sale price for such
stock on the NASDAQ Small-Cap Market on March 11, 2004.

     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 11, 2004 was 10,448,417 shares.



<PAGE>


                           HANSEN NATURAL CORPORATION

                                    FORM 10-K

                                TABLE OF CONTENTS



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
         Shareholder Matters                                          17
6.  Selected Consolidated Financial Data                              18
7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                          19
7a. Qualitative and Quantitative Disclosures about Market Risks       35
8.  Financial Statements and Supplementary Data                       35
9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure                          35
9a. Controls and Procedures                                           35

                                    PART III

10.  Directors and Executive Officers of the Registrant               36
11.  Executive Compensation                                           38
12.  Security Ownership of Certain Beneficial Owners and Management   43
13.  Certain Relationships and Related Transactions                   46
14.  Principal Accountant Fees and Services                           46

                                     PART IV

15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K  47

     Signatures                                                       48



                                       2

<PAGE>



                                     PART I


ITEM 1.  BUSINESS

Overview

     Hansen Natural  Corporation was incorporated in Delaware on April 25, 1990.
Its principal place of business is at 1010 Railroad Street,  Corona,  California
92882 and its  telephone  number is (909)  739-6200.  When this  report uses the
words "Hansen",  "HBC", "the Company",  "we", "us", and "our", these words refer
to Hansen Natural  Corporation and our  subsidiaries  other than Hard e Beverage
Company ("HEB"), unless the context otherwise requires.

     We are a holding company and carry on no operating  business except through
our direct wholly owned subsidiaries,  Hansen Beverage Company ("HBC") which was
incorporated in Delaware on June 8, 1992, and HEB, formerly known as Hard Energy
Company,  and previously known as CVI Ventures,  Inc., which was incorporated in
Delaware on April 30, 1990.  HBC  generates  substantially  all of our operating
revenues.

Corporate History

     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., which subsequently became known as The
Fresh Juice  Company of  California,  Inc.  ("FJC").  FJC  retained the right to
market and sell fresh  non-pasteurized  juices  under the Hansen  trademark.  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"). 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,  HBC
acquired the  Hansen's(R)  brand natural soda and apple juice business from CCC.
Under our ownership, the Hansen beverage business has significantly expanded and
includes a wide range of  beverages  within the growing  "alternative"  beverage
category.  As will  appear  more fully  from the  section  headed  "Intellectual
Property"  below,  in  September  1999  we  acquired  all  of  FJC's  rights  to
manufacture,  sell and distribute fresh non-pasteurized juice products under the
Hansen's(R)  trademark  together with certain  additional  rights. In 2000, HBC,
through its wholly-owned subsidiary, Blue Sky Natural Beverage Co. ("Blue Sky"),
which was  incorporated  in Delaware on September 8, 2000,  acquired the natural
soda  business  previously  conducted  by Blue Sky Natural  Beverage  Co., a New
Mexico  corporation  ("BSNBC"),  under the Blue Sky(R) trademark.  In 2001, HBC,
through its  wholly-owned  subsidiary  Hansen  Junior  Juice  Company,  ("Junior
Juice"),  which was incorporated in Delaware on May 7, 2001, acquired the Junior
Juice business  previously  conducted by Pasco Juices,  Inc. ("Pasco") under the
Junior Juice(R) trademark.

Industry Overview

     The alternative  beverage category combines  non-carbonated  ready-to-drink
iced teas, lemonades, juice cocktails, single serve juices,  ready-to-drink iced
coffees,  energy drinks,  sports drinks, soy drinks and single-serve still water
(flavored and  unflavored)  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 according to Beverage Marketing  Corporation.  Sales in 2003 for the
alternative beverage category of the market are estimated at approximately $14.1
billion at wholesale,  representing a growth rate of approximately 5.9% over the
revised  estimated  wholesale  sales  in 2002 of  approximately  $13.3  billion.
(Source: Beverage Marketing Corporation).

                                       3

<PAGE>

Products

     We develop,  market,  sell and distribute  "alternative"  beverage category
natural sodas, fruit juices, energy drinks and energy sports drinks, fruit juice
and soy smoothies,  "functional  drinks",  sparkling  lemonades and  orangeades,
non-carbonated ready-to-drink iced teas, lemonades, juice cocktails,  children's
multi-vitamin  juice drinks and  non-carbonated  lightly  flavored energy waters
under the  Hansen's(R)  brand name. We also market,  sell and distribute  energy
drinks under the Monster(TM)  brand name. In addition,  we market nutrition bars
and  cereals  under  the  Hansen's(R)  brand  name.  We also  market,  sell  and
distribute,  natural  sodas,  premium  natural sodas with  supplements,  organic
natural  sodas,  seltzer  waters and energy  drinks  under the Blue Sky(R) brand
name. Our fruit juices for toddlers are marketed under the Junior Juice(R) brand
name. Our malt-based drinks are marketed under the Hard e(R) brand name.

     Natural  Sodas.  Hansen's  natural  sodas have been a leading  natural soda
brand in  Southern  California  for the past 25  years.  In 2003,  according  to
Information Resources, Inc.'s Analyzer Reports for California, our natural sodas
recorded  the  highest  sales  among  comparable  carbonated  new  age  category
beverages  measured by unit volume in the California  market.  Our natural sodas
are available in thirteen 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,  ginger ale and
tangerine.  In  early  2001,  we  introduced  a new  line  of diet  sodas  using
Splenda(R) sweetener as the primary sweetener. We initially introduced this line
in four flavors:  peach,  black cherry,  tangerine lime, and kiwi strawberry and
have since added two  additional  flavors,  ginger ale and creamy root beer. Our
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 diet sodas, with Splenda(R) and  Acesulfame-K.  We
package our natural  sodas in 12-ounce  aluminum  cans. In 2002, we introduced a
line of natural  mixers in 8-ounce  aluminum cans  comprising  club soda,  tonic
water and ginger ale.

     In January 1999, we introduced a premium line of Signature  Sodas in unique
proprietary 14-ounce glass bottles. This line was marketed under the Hansen's(R)
brand name,  primarily through our distributor network, in six flavors. In early
2003 we  repositioned  this line into lower cost  12-ounce  glass  packaging and
intend to market our  repositioned  Signature  Soda line at lower  price  points
directly to our retail customers such as grocery chains, club stores,  specialty
retail  chains and mass  merchandisers  and to the health  food  sector  through
specialty and health food distributors  (collectively referred to as our "direct
retail  customers").  Signature  Soda is available in 12-ounce  glass bottles in
five flavors:  orange creme, vanilla creme, ginger beer,  sarsaparilla and black
cherry.

     In September  2000,  we acquired the Blue Sky Natural  Soda  business  from
BSNBC. Our Blue Sky product line comprises natural sodas, premium sodas, organic
natural sodas,  seltzer water and energy  drinks.  Blue Sky(R) natural sodas are
available in thirteen  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,  grape and private  reserve cream
soda. We also offer a Blue Sky(R)  product line of premium line of natural sodas
which contain supplements such as ginseng. This line is 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(R)  introduced a line of organic  natural sodas,  which are available in six
flavors consisting of prime lime cream, new century cola, orange divine,  ginger
gale, black cherry cherish,  and root beer. We also market a seltzer water under
the Blue Sky(R) label in three  flavors:  natural,  lime and lemon.  In 2002, we
introduced a lightly  carbonated  Blue Sky(R) energy drink in an 8.3-ounce  slim
can.  The Blue  Sky(R)  products  contain no  preservatives,  sodium or caffeine
(other  than the energy  drink) or  artificial  coloring  and are made with high
quality  natural  flavors.  Blue Sky(R)  natural  sodas and  seltzer  waters are
packaged in 12-ounce  aluminum  cans and are  marketed  primarily  to our direct
retail customers.

                                       4

<PAGE>

     In 2001, we introduced a new line of sparkling lemonades (regular and pink)
and orangeades in unique  proprietary  1-liter glass bottles and towards the end
of 2002, we  introduced  diet  versions of our regular  sparkling  lemonades and
orangeades,   also  in  1-liter  glass  bottles.  The  sparkling  lemonades  and
orangeades  contain  real juice and pulp.  In 2003,  we extended  this line into
unique  proprietary  12-ounce  glass bottles in both regular and diet  versions.
This product line is marketed to our direct retail customers.

     Hansen's Energy Drinks. In 1997, we introduced a lightly  carbonated citrus
flavored Hansen's(R) energy drink. Our energy drink competes in the "functional"
beverage category, namely, beverages that provide a real or perceived benefit in
addition to simply  delivering  refreshment.  We offer our energy drink in three
versions:  original  citrus,  tropical and wild berry. We also offer  additional
functional  drinks  including a ginger  flavored  d-stress(R)  drink,  an orange
flavored  b-well(TM)  drink, a guarana berry flavored  stamina(R) drink, a grape
flavor power drink,  and a  berry-flavored  "slim-down"  drink that  contains no
calories.   Each  of  our  energy  and  functional   drinks  contain   different
combinations   of  vitamins,   minerals,   nutrients,   herbs  and   supplements
("supplements").  Our energy drinks and functional  drinks are sold in 8.3-ounce
cans and bottles. In 2001, we introduced  Energade(R),  a non-carbonated  energy
sports  drink  in  23.5-ounce  cans  in two  flavors,  citrus  and  orange,  and
subsequently  introduced a third  flavor,  red rocker.  We also  introduced  E2O
Energy  Water(R),  a  non-carbonated  lightly  flavored  water, in 24-ounce blue
polyethylene   terephthalate   ("P.E.T.")  plastic  bottles,  in  four  flavors,
tangerine,  apple, berry and lemon. In 2002, we expanded our E2O Energy Water(R)
line with four additional flavors in clear P.E.T. plastic bottles,  mango melon,
kiwi  strawberry,  grapefruit  and green  tea.  Our  Energade(R)  and E2O Energy
Water(R) drinks also contain  different  combinations and levels of supplements.
At the end of 2002,  we  introduced  a lightly  carbonated  diet energy drink in
8.3-ounce  cans under the  Hansen's(R)  Diet Red brand name. Our Diet Red energy
drink is sweetened with Splenda and Acesulfame-K. We market our energy, Diet Red
energy,  Energade and E2O Energy  Water(R)  drinks in clear bottles  through our
full service  distributor  network.  We market our E2O Energy Water(R) drinks in
blue  bottles  to our  direct  retail  customers.  In 2003 we  introduced  a new
carbonated  energy drink under the  Hansen's(R)  Deuce brand name, in a 16-ounce
can, but with a different flavor than our existing  Hansen's(R) Energy drinks in
8.3-ounce cans.

     Monster  Energy(TM)  Drinks.  In 2002, we launched a new carbonated  energy
drink under the Monster Energy(TM) brand name, in 16-ounce cans, which is almost
double the size of our  regular  energy  drinks in  8.3-ounce  cans and the vast
majority of  competitive  energy  drinks  currently  on the market.  Our Monster
Energy(TM)  drink contains  different  types and levels of supplements  than our
Hansen's(R)  energy drinks and is marketed through our full service  distributor
network.  In 2003,  we  introduced a low carb version of our Monster  Energy(TM)
energy drink.

     Lost(R) Energy Drinks.  In 2004, we launched a new carbonated  energy drink
under the Lost(R) brand name, in 16-ounce  cans. The Lost(R) brand name is owned
by Lost  International LLC and the drinks are produced,  sold and distributed by
us under exclusive license from Lost International LLC.

     Juice  Products  and  Smoothies.  Our fruit  juice  product  line  includes
Hansen's(R)  Natural  Old  Fashioned  Apple  Juice which is packaged in 64-ounce
P.E.T. plastic bottles and 128-ounce  polypropylene  bottles and White Grape and
Purple Grape juices, and Apple Strawberry, Apple Grape and Apple Cranberry juice
blends,  in 64-ounce P.E.T.  plastic bottles.  These  Hansen's(R) juice products
contain 100% juice (except Apple  Cranberry which contains 27% juice) as well as
Vitamin C. Certain of these  products  also contain added  calcium.  Hansen's(R)
juice products compete in the shelf-stable juice category.  In 2002, we extended
our fruit juice and juice blend  product  line by  introducing  certain of these
products in 10-ounce  P.E.T.  plastic  bottles and in 2003 further  extended our
fruit juice product line by introducing a 100% Apple Juice in aseptic pouches in
a 6.75-ounce size.

     In March  1995,  we  introduced  a line of fruit juice  smoothie  drinks in
11.5-ounce aluminum cans. Certain flavors were subsequently offered in glass and
P.E.T.  plastic  bottles.  Hansen's fruit juice  smoothies have a smooth texture
that is thick  but  lighter  than a nectar.  Hansen's  smoothies  in  11.5-ounce
aluminum cans contain approximately 35% juice while the juice levels of Hansen's
smoothies in glass and P.E.T.  plastic bottles is 25%. Our fruit juice smoothies
provide 100% of the recommended daily intake for adults of Vitamins A, C & E and
represented Hansen's entry into what is commonly referred to as the "functional"
beverage  category.  Hansen's(R)  fruit  juice  smoothies  are  available  in 15
flavors:  strawberry  banana,  peach berry,  mango pineapple,  guava strawberry,
pineapple coconut,  apricot nectar, tropical passion,  whipped orange, cranberry
twist, a cranberry  raspberry lite as well as the blast line  comprising  Island
Blast, Colada Blast, Power Berry Blast, Vita Blast and Banana Blast.

                                       5

<PAGE>

     In 2001,  we  introduced  a new line of soy  smoothies  in 32- and 11-ounce
aseptic packaging in five flavors: berry splash,  tropical breeze, orange dream,
lemon chiffon and peach passion. The soy smoothies contain soy protein and fruit
juices.

     Sparkling  Apple Cider. In 2002, we introduced a Sparkling Cider 100% juice
drink in a  1.5-liter  Magnum  glass  bottle.  However,  due to  reports of some
bottles breaking we promptly voluntarily recalled the product. We are pursuing a
claim against the  third-party  bottler for the costs and losses incurred by us.
We will reevaluate  relaunching this product once certain  production issues are
resolved.

     We market  the above  juice and  smoothie  products  to our  direct  retail
customers.

     Iced  Teas,  Lemonades  and  Juice  Cocktails.  We  introduced  Hansen's(R)
ready-to-drink iced teas and lemonades in 1993. Hansen's(R)  ready-to-drink iced
teas are available in three  flavors:  Original with Lemon,  Tropical  Peach and
Wildberry.  Lemonades  are  available  in one  flavor:  Original  Old  Fashioned
Lemonade.  Hansen's(R) juice cocktails were introduced in 1994 and are available
in three flavors: kiwi strawberry melon, tangerine pineapple with passion fruit,
and  California  paradise  punch.  We  introduced a variety 12 pack of iced teas
during  the  first  half of 2001,  which  experienced  limited  success.  We are
continuing  to  market  this  package.  Hansen's(R)  ready-to-drink  iced  teas,
lemonades  and juice  cocktails  were  packaged  in  16-ounce  wide-mouth  glass
bottles.  At the end of 2002, we converted this line from 16-ounce glass bottles
to 16-ounce polypropylene bottles.

     Hansen's(R)  ready-to-drink  iced  teas are made  with  decaffeinated  tea.
Hansen's(R)  juice  products and smoothies are made with high quality juices and
products  that  contain  less than 100% fruit  juice are also made with  natural
flavors, high fructose corn syrup, citric acid and other ingredients.

     In 1999, we introduced a line of specialty  teas in 20-ounce glass bottles,
which  we named  our  "Gold  Standard"  line.  We  subsequently  introduced  two
additional  green tea  flavors as well as two diet green  flavors  and six juice
cocktails.  We are  discontinuing  certain of the specialty  teas and all of the
juice cocktails but are continuing to market three regular green tea flavors and
the diet peach green tea flavor.  Our Gold Standard  line contains  supplements,
but at lower levels than in our  functional  drinks.  We continue to package our
Gold Standard Line in unique  20-ounce glass bottles.  Additionally,  in 2002 we
introduced  two of our iced tea  products,  namely green tea and  original  with
lemon in 10.14-ounce aseptic packages.

     Juices for Children.  In 1999,  we  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 has three
flavors.  We  introduce  new flavors in place of existing  flavors  from time to
time.  One of these two lines is a  dual-branded  100% juice  line named  "Juice
Blast(R)" that was launched in  conjunction  with Costco  Wholesale  Corporation
("Costco") and is sold  nationally  through Costco stores.  The other line was a
10% juice line named  "Hansen's  Natural  Multi-Vitamin  Juice Slam(R)" that was
available to all of our customers.  During 2000, we repositioned  that line as a
100% juice  line under the Juice  Slam(R)  name and are  marketing  that line to
grocery store chain customers,  the health food trade,  and other customers.  In
2002, we changed the size of the Juice Blast(R)  package to 6.75-ounces  and are
in the process of changing the size of the Juice Slam(R)  package to 6.75 ounces
as well.

     In May 2001, we acquired the Junior Juice(R) beverage business.  The Junior
Juice(R)  product line is comprised of seven flavors of 100% juice in 4.23-ounce
aseptic packages and is targeted at toddlers. Six flavors of the Junior Juice(R)
line have  calcium  added and all  flavors  have  vitamin C added.  The  current
flavors in the Junior Juice(R) line are apple, apple berry,  orange twist, apple
grape, mixed fruit, fruit punch, and white grape.

                                       6

<PAGE>

     Nutrition Bars and Cereals.  In 2000, we introduced a new line of nutrition
food bars under the  Hansen's(R)  brand name.  This line is made from grains and
fruit. In addition,  we introduced a new line of premium G.M.O.  free (free from
genetically modified organisms) cereals under the Hansen's(R) brand name. During
the first half of 2001, we introduced a line of functional food bars and towards
the end of the year  introduced  a line of  active  nutrition  bars,  which  are
specially formulated for adults who are older than 50 years of age. Sales of the
bars and cereals have been  disappointing  and we have discontinued all of these
lines other than the nutrition food bar line.

     Hard e Product Line.  In 2000,  we 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(R)  name.  Sales of this product line are very
limited.

     Bottled  Water.  Our still water  products were  introduced in 1993 and are
primarily sold in 0.5-liter plastic bottles to the food service trade.

  Other Products

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

Manufacture and Distribution

     We do not  directly  manufacture  our products  but instead  outsource  the
manufacture to third party bottlers and packers.

     We purchase concentrates,  juices, flavors, vitamins, minerals,  nutrients,
herbs,  supplements,  caps,  labels,  trays, boxes and other ingredients for our
beverage  products  which are delivered to our various third party  bottlers and
packers.  Depending  on the  product,  the third  party  bottlers or packers add
filtered  water and/or high  fructose corn syrup,  or sucrose,  or cane sugar or
Splenda brand sweetener,  Acesulfame-K  and/or citric acid or other  ingredients
and supplements for the manufacture and packaging of the finished  products into
approved containers.  In the case of sodas and other carbonated  beverages,  the
bottler/packer  adds  carbonation  to the  products  as part  of the  production
process.

     We are generally responsible for arranging for the purchase of and delivery
to our third party  bottlers and packers of the containers in which our beverage
products are packaged.

     The ingredients for our nutrition food bars are purchased by our co-packers
from various suppliers for manufacturing and packaging of the finished bars.

     All of our  beverage  products  are  manufactured  by various  third  party
bottlers  and packers  situated  throughout  the United  States and Canada under
separate   arrangements  with  each  of  such  parties.   The  majority  of  our
co-packaging arrangements are on a month-to-month basis. However, certain of our
material co-packing arrangements are described below:

     (a) Our agreement with Southwest Canning and Packaging,  Inc. ("Southwest")
pursuant to which Southwest packages a portion of our Hansen's(R) natural sodas.
This contract continues  indefinitely and is subject to termination upon 60 days
written notice from either party;

     (b) Our agreement with Nor-Cal Beverage Co., Inc.  ("Nor-Cal")  pursuant to
which Nor-Cal  packages a portion of our  Hansen's(R)  juices in P.E.T.  plastic
bottles. This contract continues until 2008 and is renewable annually thereafter
from year-to-year unless terminated by Hansen's not less than 60 days before the
end of the then current term.

                                       7

<PAGE>

     (c) Our agreement with Seven-Up/RC Bottling Company of Southern California,
Inc.  ("Seven-Up")  pursuant  to  which  Seven-Up  packages  a  portion  of  our
Monster(TM)  and Lost(R)  brand energy  drinks and a portion of our  Hansen's(R)
natural  sodas.  This  contract  continues  until  March  2008 and is  renewable
annually  thereafter.  Upon  termination  prior to such time we are  entitled to
recover  certain  equipment  we  have  purchased  and  installed  at  Seven-Up's
facility; and

     (d) Our agreement  with Tree Top, Inc.  ("Tree Top") pursuant to which Tree
Top packages a portion of our Hansen's  juices in P.E.T.  plastic  bottles.  The
Tree Top  agreement is for a period of one (1) year and is renewable  thereafter
from  year-to-year for additional one (1) year terms unless terminated by either
party.  Either party is entitled,  at any time,  to terminate  the  agreement on
60 day's written notice.

     Hard e malt-based drinks are manufactured for HEB by Reflo, Inc. ("Reflo"),
pursuant to a manufacturing  and  distribution  agreement  ("Reflo  Agreement").
Either party may elect to terminate  the Reflo  Agreement at any time on 90 days
notice. Reflo administers the sales and distribution of such products throughout
the United States under the terms of the Reflo  Agreement,,  excluding  Arizona,
California,  Nevada and Oregon where HEB is itself responsible for the sales and
distribution of such products.  Hard e is currently  distributed in five states.
However, in many of such states, distribution is on a limited scale.

     In many  instances,  equipment  is  purchased  by us and  installed  at the
facilities of our packers to enable them to produce certain of our products.  In
general,  such  equipment  remains our property and is to be returned to us upon
termination of the packing arrangements with such packers or is amortized over a
pre-determined  number  of  cases  that  are to be  produced  at the  facilities
concerned.

     We pack certain  products  outside of the West Coast region to enable us to
produce  products  closer to the markets where they are sold and thereby  reduce
freight costs. As volumes in markets outside of California  grow, we continue to
secure additional packing  arrangements closer to such markets to further reduce
freight costs.

     Our ability to estimate demand for our products is imprecise,  particularly
with new  products,  and may be less  precise  during  periods of rapid  growth,
particularly  in new  markets.  If we  materially  underestimate  demand for our
products  or are  unable  to  secure  sufficient  ingredients  or raw  materials
including,  but not limited to, glass,  P.E.T./plastic  bottles,  cans,  labels,
flavors or supplement ingredients or certain sweetners, or packing arrangements,
we might not be able to satisfy demand on a short-term basis.

     Although our production arrangements are generally of short duration or are
terminable  upon  request,  we  believe a short  disruption  or delay  would not
significantly  affect our revenues since alternative  packing  facilities in the
United  States with  adequate  capacity  can usually be obtained for many of our
products at commercially reasonable rates and/or, within a reasonably short time
period.  However, there are limited packing facilities in the United States with
adequate  capacity  and/or  suitable  equipment for many of our newer  products,
including  our energy  drinks and  functional  drinks in 8.3-ounce  and 16-ounce
cans, Gold Standard line, aseptic juice products,  Energade(R),  sparkling apple
cider in 1.5-liter  magnum glass bottles,  soy smoothies,  MonsterTM and Lost(R)
energy  drinks in 16-ounce cans and  sparkling  lemonades  and orangeade  lines.
There are also limited shrink sleeve labeling facilities  available to us in the
United States with adequate  capacity for our E2O Energy Water(R).  A disruption
or delay in production of any of such products  could  significantly  affect our
revenues from such products as alternative  co-packing  facilities in the United
States with adequate  capacity may not be available for such products  either at
commercially  reasonable rates, and/or within a reasonably short time period, if
at all. 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 packed  at  alternative  packaging  facilities  on short  notice.
Consequently,  a disruption  in  production  of such  products  could affect our
revenues.   We  continue  to  seek  alternative  and/or  additional   co-packing
facilities  in the  United  States  or Canada  with  adequate  capacity  for the
production  of our various  products to minimize the risk of any  disruption  in
production.

                                       8

<PAGE>

     We have entered  into  distribution  agreements  for  distribution  in most
states of Hansen's(R) energy drinks,  Monster Energy(TM) drinks,  Lost(R) energy
drinks, Diet Red energy drinks,  Energade(R) energy sports drinks and E2O Energy
Water(R).  In many  states  however,  distribution  is only on a limited  scale.
Certain of our products are sold in Canada.  We also sell a limited range of our
products to  distributors  outside of the United  States,  including  the United
Kingdom, Mexico, Japan, Guam, the Caribbean, the United Arab Emirates and India.

     We continually seek to expand distribution of our products by entering into
agreements  with regional  bottlers or other direct store delivery  distributors
having established sales, marketing and distribution organizations.  Many of our
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 compete directly with our products.

     We continue to take steps to reduce our inventory  levels in an endeavor to
lower our warehouse and distribution costs.

     During 2003, we continued to expand  distribution  of our natural sodas and
smoothies outside of California. We expanded our national sales force to support
and grow sales, primarily of Hansen's(R) energy drinks, Monster EnergyTM drinks,
Diet Red energy drinks, Energade(R) energy sports drinks and E2O Energy Water(R)
and we intend to continue to build such sales force in 2004.

     Our Blue  Sky(R)  products  are sold  primarily  to the health  food trade,
natural food chains and  mainstream  grocery  store  chains,  through  specialty
health food distributors.

     We have been  awarded  an  exclusive  contract  by the State of  California
("State")  Department of Health  Services,  Women,  Infant and Children  ("WIC")
Supplemental  Nutrition Branch ("DHS") to supply 100% apple juice and 100% apple
grape juice, in 64-ounce P.E.T. plastic bottles. The contract is for a period of
three  years with a further  one-year  extension  option to be  mutually  agreed
between  Hansen's  and the State of  California.  We bid the lowest net cost per
unit in terms of the wholesale price, less a rebate to the State.

     We expect to sign formal  written  agreements  with the State in accordance
with the bid process in due course.  Delivery of the first products to the trade
is expected to begin in advance of the July 12, 2004  commencement  date for the
contract.

     At the present time,  multiple  manufacturers are supplying apple juice for
the WIC program.  The new award makes Hansen's the exclusive  supplier.  We will
also be the exclusive  supplier for the blended fruit juice category,  a new WIC
category,  with our 100% Apple  Grape  Juice.  The WIC  contract  is expected to
expand the distribution of Hansen's juices,  resulting in increased exposure for
the Hansen's brand.  WIC-approved  items are stocked by the grocery trade and by
WIC-only stores.  Products are purchased by WIC consumers with vouchers given by
the DHS to qualified  participants.  The DHS  estimates  that  Hansen's  will be
supplying  24.5  million  units per year of 64 oz.  apple  juice and 5.4 million
units per year of 64 oz.  apple grape juice  pursuant  to this  contract.  These
estimates from the State, which we cannot independently verify or confirm, could
result in an  increase in net sales for the company of more than $20 million per
annum.  However,  juices sold pursuant to this contract will be at lower margins
than those of the Company's traditional juice business.

                                       9

<PAGE>

     Langer Juice Company  ("Langer") filed a protest against the DHS's award of
the  blended  fruit  juice  category to the Company and Tree Top filed a protest
against the DHS's award of the shelf stable  ready-to-drink apple juice category
to the Company.  During February 2004 the hearing officer duly designated by the
DHS dismissed  both the Langer and Tree Top protests.  In March Tree Top filed a
petition  for a writ of mandate  directing  the DHS to set aside their  decision
awarding the apple juice  contract to Hansen and to issue that award to Tree Top
or alternatively to require that the State rebid the apple juice contract.  Such
petition is presently pending.

     Our principal  warehouse  and  distribution  center and  corporate  offices
relocated to our current  facility in October 2000. In January 2004 we leased an
additional warehouse facility in Corona to consolidate additional space that had
been leased by us on short term  leases from time to time to meet our  increased
warehousing  needs due to  increases  in both sales  volumes  and  products  and
terminated  the two short term  leases  concerned.  We continue to take steps to
reduce our  inventory  levels  wherever  possible,  in an  endeavor to lower our
warehouse and distribution costs. See also "ITEM 2 - PROPERTIES."

Raw Materials and Suppliers

     The  principal  raw  materials  used by us comprise  aluminum  cans,  glass
bottles and P.E.T.  plastic bottles as well as juices, high fructose corn syrup,
sucrose and sucralose,  the costs of which are subject to  fluctuations.  Due to
the consolidations that have taken place in the glass industry over the past few
years,  the prices of glass bottles  continue to increase.  The price of plastic
bottles and  aluminum  cans is  expected  to  increase in the future.  This will
continue to exert pressure on our gross margins.

     Generally,  raw  materials  utilized  by us in  our  business  are  readily
available from numerous sources. However, certain raw materials are manufactured
by only one  company.  Sucralose,  which is used  alone or in  combination  with
Acesulfame-K in the Company's  low-calorie  products,  is purchased by us from a
single manufacturer.  Cans for our energy and functional drinks (8.3 ounces) are
only manufactured by one company in the United States.

     With  regard to fruit  juice and  juice-drink  products,  the  industry  is
subject to the  variability  of weather  conditions,  which may result in higher
prices and/or lower consumer demand for juices.

     We  purchase   beverage   flavors,   concentrates,   juices,   supplements,
high-fructose corn syrup, cane sugar, sucrose, sucralose and other sweeteners as
well as nutrition food bars and other  ingredients,  from independent  suppliers
located in the  United  States  and  abroad,  and  cereals  from an  independent
supplier located abroad.

     Generally,  flavor suppliers hold the proprietary  rights to their flavors.
Consequently, we do not have the list of ingredients or formulae for our flavors
and certain of our concentrates  readily available to us and we may be unable to
obtain these flavors or concentrates from alternative suppliers on short notice.
We have identified alternative suppliers of many of the supplements contained in
many of our beverages.  However,  industry-wide shortages of certain fruits, and
fruit juices,  and supplements and sweeteners have been and could,  from time to
time in the future,  be  experienced,  which could  interfere  with and/or delay
production of certain of our products.

     We continually endeavor to develop back-up sources of supply for certain of
our  flavors  and  concentrates  from  other  suppliers  as well as to  conclude
arrangements  with  suppliers  which would enable us to obtain access to certain
concentrates  or  product  formulae  in  certain  circumstances.  We  have  been
partially  successful in these endeavors.  Additionally,  in a limited number of
cases,  contractual  restrictions  and/or  the  necessity  to obtain  regulatory
approvals  and  licenses  may limit our  ability to enter into  agreements  with
alternative suppliers and manufacturers and/or distributors.

     In connection with the development of new products and flavors, independent
suppliers  bear a large portion of the expense of product  development,  thereby
enabling us to develop new products and flavors at relatively  low cost. We have
historically developed and successfully  introduced new products and flavors and
packaging  for our products and intend to continue  developing  and  introducing
additional new beverages and flavors.

                                       10

<PAGE>

Competition

     The  beverage  industry  is  highly  competitive.  The  principal  areas of
competition are pricing, packaging,  development of new products and flavors and
marketing  campaigns.  Our products compete with a wide range of drinks produced
by a relatively large number of manufacturers,  most of which have substantially
greater financial, marketing and distribution resources than we do.

     Important  factors  affecting our 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.  We  also  compete  for
distributors  who will  concentrate  on marketing our products over those of our
competitors,  provide stable and reliable distribution and secure adequate shelf
space in retail outlets.  Competitive  pressures in the alternative,  energy and
functional beverage categories as well as in the cereal,  nutrition food bar and
flavored malt beverage  categories could cause our products to be unable to gain
or to lose market share or we could experience price erosion, which could have a
material adverse affect on our business and results.

     Over the past three years we have experienced  substantial competition from
new entrants in the energy drink category.  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  supplements to their products with a view to marketing  their products as
"functional" or "energy" beverages or as having functional benefits.  We believe
that many of those products  contain lower levels of supplements and principally
deliver  refreshment.  In addition,  many  competitive  products are  positioned
differently  than our  energy  or  functional  drinks.  Our  smoothies  and Gold
Standard lines are positioned more closely against those products.

     We compete 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.  Our
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,  Anheuser
Busch and Ocean  Spray.  More  specifically,  our  products  compete  with other
alternative beverages,  including new age beverages, such as Snapple,  Elements,
Mistic,  Arizona,  Clearly  Canadian,  Sobe,  Stewart's,   Everfresh,  Nantucket
Nectars,  Vitamin Water,  Fuse,  VeryFine,  V8 Splash and Smoothies,  Calistoga,
Propel Fitness Water,  AquaFina,  Dasani, Reebok, 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
our  products  such as Nestea,  Fruitopia,  Lipton,  Propel,  AquaFina,  Dasani,
Adrenaline Rush, Amp, KMX and Dole. Our products also compete with private label
brands such as those carried by grocery store chains and club stores.

     Our fruit juice smoothies  compete directly with Kern's,  Jumex,  Jugos del
Valle and Libby's  nectars,  V8  Smoothies,  as well as 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 48-ounces in size and in 11.5-ounce
aluminum cans. The juice content of such competitive  products ranges from 1% to
100%.

     Our apple and other juice products  compete directly with Tree Top, Mott's,
Martinelli's,  Welch's, Ocean Spray, Tropicana,  Minute Maid, Langers, Apple and
Eve,  Seneca,  Northland  and also with  other  brands of apple  juice and juice
blends, especially store brands.

     Our energy  drinks,  including  Hansen's(R)  energy,  Diet Red,  Hansens(R)
energy Deuce,  Monster  Energy(TM) and Lost(R) energy in 8.3- and 16-ounce cans,
compete directly with Red Bull,  Adrenaline Rush, Amp, 180, KMX, Venom,  Extreme
Energy Shot, Rockstar, No Fear, US energy, Red Devil,  Lipovitan,  MET-Rx, Hype,
XTC, and many other brands and our other functional drinks compete directly with
Elix, Lipovitan, MET-Rx, Think, and other brands.

                                       11

<PAGE>

     Our E2O Energy  Water(R) and still water  products  compete  directly  with
Vitamin Water, Reebok,  Propel, Dasani,  Aquafina,  Evian, Crystal Geyser, Naya,
Palomar Mountain,  Sahara,  Arrowhead,  Dannon,  and other brands of still water
especially store brands.

     The nutrition 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  products  and flavors  and  marketing
campaigns.  Our nutrition  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.

     Our Hard e product competes  directly 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 Lemonade,  Smirnoff Ice, Skyy Blue/Blue
Skyy,  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, marketing and
distribution  resources than Hansen.  Such  companies  include  Anheuser  Busch,
Miller Brewing Company, Coors, Gallo Winery, and Diageo plc.

Sales and Marketing

     We focus on consumers  who seek  products  that are perceived to be natural
and  healthy  and  emphasize  the  natural   ingredients   and  the  absence  of
preservatives,  sodium, artificial coloring and caffeine in our beverages (other
than our energy drinks) and the addition to most of our products, of one or more
supplements.  We reinforce this message in our product packaging.  Our marketing
strategy  with  respect to our  nutrition  food bars and cereals is similarly to
focus on consumers  who seek bars and cereals  that are  perceived to be natural
and  healthy.   We  emphasize  the  natural   ingredients  and  the  absence  of
preservatives  and,  in the case of the  cereals,  the fact that they are G.M.O.
free.  Our marketing  strategy with respect to our Hard e product is to focus on
adult  consumers  who  seek an  alcohol-based  beverage  that  is good  tasting,
fashionable and meets consumers' needs.

     Our sales and  marketing  strategy  is to focus our  efforts on  developing
brand  awareness  and trial  through  sampling  both in stores  and at events in
respect of all our beverage,  food and alcoholic beverage  products.  We use our
branded vehicles and other promotional vehicles at events at which we distribute
our  products to  consumers  for  sampling.  We utilize  "push-pull"  methods to
achieve  maximum shelf and display  space  exposure in sales outlets and maximum
demand  from  consumers  for  our  products  including  advertising,   in  store
promotions and in store  placement of point of sale  materials and racks,  prize
promotions,  price promotions,  competitions,  endorsements from selected public
and extreme sports figures, coupons, sampling and sponsorship of selected causes
such as breast cancer  research as well as extreme  sports  figures and sporting
events such as the Hansen's Energy Pro Pipeline Surfing competition,  marathons,
10k runs,  bicycle  races,  volleyball  tournaments  and other health and sports
related activities, including extreme sports, particularly supercross, freestyle
motor cross, surfing,  skateboarding,  wakeboarding,  skiing, snowboarding, BMX,
Mountain  Biking,  snowmobile  racing,  etc.  and also  participate  in  product
demonstrations, food tasting and other related events. Posters, print, radio and
television  advertising together with price promotions and coupons are also used
to promote the Hansen's(R) brand.

     Additionally,   during  2003  we  entered  into  a  multi-year  sponsorship
agreement to advertise on the new Las Vegas Monorail ("Monorail Agreement") with
the Las Vegas  Monorail  Company  ("LVMC")  which includes the right to vend our
Monster  Energy(TM) drinks and natural sodas on all stations.  It is anticipated
that the initial term of the Monorail  Agreement  will commence in May 2004. The
initial  term of the Monorail  Agreement  ends on the first  anniversary  of its
commencement  date.  Not less than 120 days before the expiration of the initial
term and each renewal  term,  as the case may be, We have the right to renew the
Monorail  Agreement  for a  further  one  year  term  up to a  maximum  of  nine
additional  one year terms and the LVMC has the  right,  not  withstanding  such
election by us, to terminate  the Monorail  Agreement at the  expiration  of the
then current term.

                                       12

<PAGE>

     We  believe  that one of the keys to success in the  beverage  industry  is
differentiation;  such as making Hansen's(R)  products visually distinctive from
other  beverages  on the  shelves  of  retailers.  We review  our  products  and
packaging  on an  ongoing  basis and,  where  practical,  endeavor  to make them
different,  better and unique.  The labels and graphics for many of our products
are   redesigned   from  time  to  time  to  maximize   their   visibility   and
identification,  wherever  they may be placed in stores and we will  continue to
reevaluate the same from time to time.

     Where  appropriate  we  partner  with  retailers  to assist  our  marketing
efforts.  For example,  while we retain  responsibility for the marketing of the
Juice  Slam(R)  line  of  children's  multi-vitamin  juice  drinks,  Costco  has
undertaken sole responsibility for the marketing of the Juice Blast(R) line.

     We  increased   expenditures  for  our  sales  and  marketing  programs  by
approximately 22% in 2003 compared to 2002. As of February 28, 2004, we employed
114 employees in sales and marketing activities.

Customers

     Our customers are typically retail and specialty chains,  club stores, mass
merchandisers, convenience chains, full service beverage distributors and health
food distributors.  In 2003, sales to retailers represented 47% of our revenues,
sales to full service distributors represented 37% of our revenues, and sales to
health food distributors represented 10% of our revenues.

     Our major  customers  include  Costco,  Trader  Joe's,  Sam's  Club,  Vons,
Ralph's,  Wal-Mart,  Safeway  and  Albertson's.   One  customer,  Costco  (which
purchases  a number of  different  products  from  Hansen's  regionally  and one
product  nationally),  accounted for  approximately  15% of our sales in 2003. A
decision by Costco or any other major  customer  to decrease  amounts  purchased
from the  Company  or to cease  carrying  our  products  could  have a  material
negative  effect  on  our  financial  condition  and  consolidated   results  of
operations.

Seasonality

     Sales of ready-to-drink  beverages are somewhat  seasonal,  with the second
and third calendar quarters accounting for the highest sales volumes. The volume
of sales in the beverage business may be affected by weather  conditions.  Sales
of  our  beverage   products  may  become   increasingly   subject  to  seasonal
fluctuations as more sales occur outside of California.

Intellectual Property

     We own  numerous  trademarks  that  are  very  important  to our  business.
Depending upon the jurisdiction, trademarks are valid as long as they are in use
and/or their  registrations are properly maintained and they have not been found
to have become generic.  Registrations of trademarks can generally be renewed as
long as the  trademarks are in use. We also own the copyright in and to numerous
statements made and content appearing on the packaging of our products.

     The  Hansen's(R)  trademark is crucial to our 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 us and was acquired
from 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. There was a similar license agreement between the Trust and
HBC with regard to  non-beverage  products.  No royalties were payable on sodas,
energy drinks, juices,  lemonades,  juice cocktails,  fruit juice Smoothies, the
Signature  Soda  line  or on  the  children's  multi-vitamin  juice  drinks.  As
explained below, no royalty expenses were incurred during 2003, 2002 or 2001.

                                       13

<PAGE>

     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, we entered into an Assignment  and Agreement
with FJC pursuant to which we acquired  exclusive  ownership of the  Hansen's(R)
trademark  and trade names.  Under the  Assignment  and  Agreement,  among other
matters,  we 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 i.e.  until  September  2004.
Consequently,  we now have full ownership of the  Hansen's(R)  trademark and our
obligation  to pay  royalties  to,  and to share  royalties  with,  FJC has been
terminated.  As of December 31, 2002, the total  consideration  had been paid to
FJC and no further amounts are payable to FJC.

     We have  applied to register a number of  trademarks  in the United  States
including, but not limited to, Hard e(TM), Monster(TM), Monster Energy(TM) and M
(stylized) Monster(TM).

     We own in our own right, a number of trademarks including,  but not limited
to, Hansen's(R), A New Kind a Buzz(R), Unleash the Beast(R), Hansen's energy(R),
Blue   Energy(R),   Energade(R),   Hansen's   E2O  Energy   Water(R),   Hansen's
slim-down(R), Power Formula(R), THE REAL DEAL(R), LIQUIDFRUIT(R),  Imported from
Nature(R),  California's  Natural Choice(R),  California's  Choice(R),  Medicine
Man(R), Dyna Juice(R),  Equator(R),  Hansen's power(R),  bewell(R),  anti-ox(R),
d-stress(R),   stamina(R),   Aqua  Blast(R),   Antioxjuice(R)   Intellijuice(R),
Defense(R), Immunejuice(R),  Hansen's Natural Multi-Vitamin Juice Slam(R), Juice
Blast(R)  and  Red  Rocker(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,  we, through our wholly owned  subsidiary Blue Sky,
acquired the Blue Sky(R) trademark, which is registered in the United States and
Canada.

     In May  2001,  in  connection  with the  acquisition  of the  Junior  Juice
Beverage  business,  we,  through  our wholly  owned  subsidiary  Junior  Juice,
acquired  the  Junior  Juice(R)  trademark,  which is  registered  in the United
States.

     On April 4, 2000,  the United States  Patent and Trademark  Office issued a
patent to us 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 us to secure  shelf space for and to  merchandise  our energy and
functional  drinks in cans in  refrigerated  Visi coolers and walk-in coolers in
retail stores.

                                       14

<PAGE>

Government Regulation

     The production,  distribution  and sale in the United States of many of our
products is subject to the Federal  Food,  Drug and  Cosmetic  Act;  the Dietary
Supplement Health and Education Act of 1994; the Occupational  Safety and Health
Act; various environmental  statutes; and various other federal, state and local
statutes and  regulations  applicable to the production,  transportation,  sale,
safety, advertising, labeling and ingredients of such products.

     In  connection  with Hard e, the  production  and  marketing  of  alcoholic
beverages  is subject  to the rules and  regulations  of the Bureau of  Alcohol,
Tobacco  and  Firearms  and in each  state,  is 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.

     California law requires that a specific  warning appear on any product that
contains a component listed by the State as having been found to cause cancer or
birth  defects.  The  law  exposes  all  food  and  beverage  producers  to  the
possibility  of having to provide  warnings  on their  products  because the law
recognizes no generally applicable quantitative thresholds below which a warning
is not  required.  Consequently,  even trace  amounts of listed  components  can
expose affected products to the prospect of warning labels.  Products containing
listed substances that occur naturally in the product or that are contributed to
the product  solely by a municipal  water supply are  generally  exempt from the
warning requirement. While none of our beverage products are required to display
warnings under this law, we cannot predict whether an important component of any
of our products might be added to the California list in the future. We also are
unable to predict  whether or to what extent a warning under this law would have
an impact on costs or sales of our products.

     Bottlers  of  our  beverage   products   presently  offer   non-refillable,
recyclable  containers  in all areas of the United  States and  Canada.  Some of
these  bottlers also offer  refillable  containers,  which are also  recyclable.
Measures have been enacted in various  localities and states that require that a
deposit be charged for certain non-refillable  beverage containers.  The precise
requirements imposed by these measures vary. Other deposit, recycling or product
stewardship  proposals  have been  introduced  in states and  localities  and in
Congress,  and we anticipate  that similar  legislation  or  regulations  may be
proposed  in the  future at the local,  state and  federal  levels,  both in the
United States and elsewhere.

     Our facilities in the United States are subject to federal, state and local
environmental  laws and  regulations.  Compliance with these  provisions has not
had, and we do not expect such  compliance to have, any material  adverse effect
upon our capital expenditures, net income or competitive position.

Employees

     As of February 28, 2004, we employed a total of 173 employees,  159 persons
on a full-time basis. Of our 173 employees,  we employ 59 in administrative  and
quality control capacities and 114 persons in sales and marketing capacities. We
have  not  experienced  any  work  stoppages,  and we  consider  relations  with
our employees to be good.

Compliance with Environmental Laws

     In  California,  we are  required  to collect  redemption  values  from our
customers  and to remit  such  redemption  values  to the  State  of  California
Department of Conservation  based upon the number of cans and bottles of certain
carbonated and non-carbonated  products sold. In certain other states and Canada
where  Hansen's(R)  products are sold, we are also required to collect  deposits
from our customers and to remit such deposits to the  respective  state agencies
based  upon  the  number  of  cans  and  bottles  of  certain   carbonated   and
non-carbonated products, sold in such states.

                                       15

<PAGE>

Available Information

     Our  Internet  address is  www.hansens.com.  Information  contained  on our
website is not part of this  annual  report on Form 10-K.  Our annual  report on
Form 10-K and  quarterly  reports  on Form 10-Q  will,  in the  future,  be made
available free of charge on www.hansens.com,  as soon as reasonably  practicable
after we  electronically  file such material with, or furnish it to, the SEC. In
addition,  you may request a copy of these  filings  (excluding  exhibits) at no
cost by writing or telephoning us at the following address or telephone number:

                             Hansen Beverage Company
                              1010 Railroad Street
                                Corona, CA 92882
                                 (909) 739-6200
                                  (800) HANSENS


I
TEM 2.  PROPERTIES

     Our  corporate  offices and main  warehouse  are  located at 1010  Railroad
Street, Corona, California 92882. Our lease for this facility expires in October
2010.  The  area  of  the  facility  is   approximately   113,600  square  feet.
Additionally,  in January 2004 we entered into a lease for additional  warehouse
space in Corona,  California.  The area of this facility is approximately 80,000
square  feet.  This lease will expire at the end of March 2008 with an option to
extend the lease until October 2010. We also rent additional  warehouse space on
a short-term basis from time to time in public  warehouses  situated  throughout
the United States and Canada.


ITEM 3.  LEGAL PROCEEDINGS

     In March 2001, we filed a complaint in the United States District 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 our  property  and our  patent  in  respect  of our  rolling  rack  shelf
structure,  Sobe's improper business  practices,  interference with our right to
conduct  business,   injunctive  relief  and  unspecified  monetary  damages.  A
settlement  agreement was concluded  between the parties and pursuant  thereto a
consent  judgment and permanent  injunction was issued pursuant to which Sobe is
enjoined from certain conduct and competitive activities.

     In December 2002, a non-profit  organization  describing itself as Citizens
for Responsible  Business Inc., filed a complaint  against us together with more
than  a  hundred  additional  defendants  comprising  retailers,   distributors,
manufacturers  and suppliers,  in the Superior  Court of San Francisco.  In that
complaint,  the plaintiff  sought  preliminary and permanent  injunctive  relief
enjoining  the Company  and all other  defendants  from  selling  food  products
advertised  as "ginseng" or "siberian  ginseng" that are not derived from plants
classified within the genus "panax", for restitution and disgourgement of monies
obtained from the sale of products advertised as "ginseng" or "siberian ginseng"
which were not derived from plants  classified  within the genus "panax" or were
derived from  eleuthero  plants,  attorneys  fees and other relief.  In or about
April 2003 the action was settled and the Company was dismissed from the case on
terms favorable to the Company.

     During 2002, in response to our cease and desist letter to Skyy Spirits LLC
in which we alleged infringement by Skyy Spirits and/or its licensee of our Blue
Sky(R)  trademark,  Skyy Spirits filed a complaint in the United States District
Court for the  Northern  District  of  California  for a  declaratory  order and
additional  relief.  We filed a  counterclaim  against  Skyy  Spirits and joined
Miller Brewing  Company in the proceedings in which we have sought an injunction
and claimed  damages,  including an accounting  for profits  earned by both Skyy
Spirits and Miller Brewing  Company,  from the sale of the  infringing  beverage
products and further  relief.  The trial in this matter has been  scheduled  for
hearing in April 2004.

                                       16

<PAGE>

     During 2003,  in response to a cease and desist  letter from the  Coca-Cola
Company and its subsidiary Odwalla,  Inc. in which they complained of the use by
us of the Monster  trademark and name, we filed a complaint in the United States
District Court for the Southern  District of California for a declaratory  order
and additional relief. The Company is engaged in settlement discussions with the
Coca-Cola  Company and Odwalla,  Inc. If no settlement  is reached,  the Company
will  vigorously  pursue  the  matter.  The  Company  believes  that it has good
prospects of success.

     Furthermore,  we are subject to litigation  from time to time in the normal
course of  business.  Although it is not possible to predict the outcome of such
litigation,  based on the facts known to us and after consultation with counsel,
we believe that such litigation  will not have a material  adverse effect on our
financial position or results of operations.

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


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

     The annual meeting of  stockholders  of the Company was held on October 17,
2003. At the meeting, the following individuals were elected as directors of the
Company and received the number of votes set opposite their respective names:

    Director                                             Votes For
    --------                                             ---------
    Rodney C. Sacks                                      8,702,968
    Hilton H. Schlosberg                                 8,702,968
    Benjamin M. Polk                                     8,702,968
    Norman C. Epstein                                    8,702,988
    Harold C. Taber, Jr.                                 8,702,968
    Mark S. Vidergauz                                    8,702,888

     In addition,  at the meeting our  stockholders  ratified the appointment of
Deloitte & Touche LLP as independent  auditors of the Company for the year ended
December  31,  2003,  by a vote  of  8,763,144  for,  6,250  against  and  2,137
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 11, 2004,  there were  10,448,417  shares of the  Company's
Common Stock outstanding held by approximately 619 holders of record.

                                       17

<PAGE>

Stock Price and Dividend Information

     The following  table sets forth high and low bid closing  quotations of our
Common Stock for the periods indicated:

                                    High            Low
                                  -------         -------
   Year Ended December 31, 2003
      First Quarter               $ 4.50          $ 3.17
      Second Quarter              $ 4.50          $ 3.89
      Third Quarter               $ 6.24          $ 4.20
      Fourth Quarter              $ 9.40          $ 5.79

   Year Ended December 31, 2002
      First Quarter               $ 4.49          $ 3.82
      Second Quarter              $ 4.40          $ 3.73
      Third Quarter               $ 4.41          $ 3.00
      Fourth Quarter              $ 4.65          $ 3.58


     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.

     We have not paid dividends to our  stockholders  since our inception and do
not anticipate paying dividends in the foreseeable future.

Equity Compensation Plan Information

     The  following  table sets forth  information  as of December 31, 2003 with
respect  to shares of our  common  stock  that may be  issued  under our  equity
compensation plans.
                                                          
                                                           
                                                           Number of securities
                   Number                                  remaining available
               of securities         Weighted-average      for future issuance 
                to be issued         exercise price of        under equity
               upon exercise of        outstanding         compensation plans
             outstanding options,    options, warrants   (excluding securities
             warrants and rights        and rights      reflected in column (a))
Plan category      (a)                     (b)                       (c)
---------------------------------  -------------------  ------------------------
Equity 
  compensation
  plans
  approved by
  stockholders     1,469,800               $3.87                   1,148,500

Equity
  compensation
  plans not
  approved by 
  stockholders        -                      -                         -
             --------------------  -------------------  ------------------------
 Total             1,469,800               $3.87                   1,148,500
             ====================  ===================  ========================


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, 1999 through 2003 and the balance sheet
data  as of  December  31,  for  the  years  indicated,  are  derived  from  our
consolidated  financial statements audited by Deloitte & Touche LLP, independent
auditors,  and should be read in conjunction with those financial statements and
notes thereto,  and with the  Management's  Discussion and Analysis of Financial
Condition and Results of Operations  included as Item 7 of this Annual Report on
Form 10-K. 

                                       18

<PAGE>

(in thousands, 
except per
share
information)      2003        2002         2001          2000          1999
------------    --------    --------    ---------      --------      --------
Gross Sales     $138,454    $115,490     $ 99,693      $ 86,072      $ 77,793
Net sales       $110,352    $ 92,046     $ 80,658      $ 71,706      $ 66,184
Net income      $  5,930    $  3,029     $  3,019      $  3,915      $  4,478

Net income
 per common share
  Basic         $   0.58    $   0.30     $   0.30      $   0.39      $   0.45
  Diluted       $   0.55    $   0.29     $   0.29      $   0.38      $   0.43
Total assets    $ 47,997    $ 40,464     $ 38,561      $ 38,958      $ 28,709
Long-term debt  $    358    $  3,606     $  5,851      $  9,732      $    903



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


     The  following  discussion  ("MD&A") is provided as a  supplement  to - and
should  be  read  in  conjunction  with  -  our  financial  statements  and  the
accompanying  notes  ("Notes")  included  elsewhere  in  this  Form  10-K.  This
discussion  contains  forward-looking  statements that are based on management's
current   expectations,   estimates  and  projections  about  our  business  and
operations.  Our actual  results  may  differ  materially  from those  currently
anticipated and expressed in such forward-looking statements.

     This overview provides our perspective on the individual  sections of MD&A.
MD&A includes the following sections:

o    Our Business - a general description of our business;  the value drivers of
     our business; and opportunities and risks;
o    Results  of  Operations  - an  analysis  of  our  consolidated  results  of
     operations for the three years presented in our financial statements;
o    Liquidity  and Capital  Resources - an analysis of our cash flows,  sources
     and uses of cash and contractual obligations;
o    Application  of  Critical   Accounting  Policies  and  Pronouncements  -  a
     discussion  of  accounting  policies  that require  critical  judgments and
     estimates including newly issued accounting pronouncements;
o    Sales - details of our sales measured on a quarterly  basis in both dollars
     and cases;
o    Inflation - information about the impact that inflation may or may not have
     on our results;
o    Forward Looking  Statements - cautionary  information about forward looking
     statements and a description of certain risks and uncertainties  that could
     cause our actual results to differ materially from the company's historical
     results or our current expectations or projections; and
o    Market Risks -  Information  about market  risks and risk  management.  See
     "Forward  Looking  Statements" and "ITEM 7A. - QUALITATIVE AND QUANTITATIVE
     DISCLOSURES ABOUT MARKET RISKS"
                                       19

<PAGE>

Our Business

     Overview

     We  develop,  market,  sell and  distribute,  in the main,  a wide range of
branded  beverages.  The  majority  of our  beverages  fall  within the  growing
"alternative"  beverage  category.  The  principal  brand  names under which our
beverages are marketed are Hansen's(R),  Monster Energy(TM), Blue Sky(R), Junior
Juice(R),  and Lost(R).  We own all of our  above-listed  brand names other than
Lost(R)  which we  produce,  market,  sell  and  distribute  under an  exclusive
licensing arrangement with Lost International LLC.

     Our  company  principally  generates  revenues,  income  and cash  flows by
developing,  producing,  marketing,  selling and distributing  finished beverage
products. We generally sell these products to retailers as well as distributors.

     We incur significant marketing expenditures to support our brands including
advertising costs,  sponsorship fees and special promotional events. We focus on
developing  brand  awareness  and trial  through  sampling both in stores and at
events.  Retailers and distributors receive rebates,  promotions,  point of sale
materials, merchandise displays and coolers. We also use in-store promotions and
in-store placement of point-of-sale materials and racks, prize promotions, price
promotions,  competitions,  and sponsorship of, and endorsements from,  selected
public and  extreme  sports  figures  and  causes.  Consumers  receive  coupons,
discounts and  promotional  incentives.  These  marketing  expenditures  help to
enhance  distribution  and availability of our products as well as awareness and
increase  consumer   preference  for  our  brands.   Greater   distribution  and
availability, awareness and preference promotes long term growth.

     During 2003, we continued to expand our existing  product lines and further
develop our  markets.  In  particular,  we continue to focus on  developing  and
marketing  beverages  that fall within the category  generally  described as the
"alternative" beverage category, with particular emphasis on energy type drinks.

     We  believe  that one of the keys to success in the  beverage  industry  is
differentiation;  such as making Hansen's(R)  products visually distinctive from
other  beverages  on the  shelves  of  retailers.  We review  our  products  and
packaging  on an  ongoing  basis and,  where  practical,  endeavor  to make them
different,  better and unique.  The labels and graphics for many of our products
are   redesigned   from  time  to  time  to  maximize   their   visibility   and
identification,  wherever  they may be placed in stores and we will  continue to
reevaluate the same from time to time.

     We again achieved record sales in 2003. The increase in gross and net sales
in 2003 was  primarily  attributable  to sales of our Monster  Energy(R)  drink,
which was introduced in April 2002,  including our low carbohydrate  ("lo-carb")
Monster Energy(R) drink which was introduced in 2003, as well as increased sales
of Natural  Sodas,  in particular  Diet Natural  Sodas,  our Energy Deuce drink,
Junior  Juice,  Diet  Energy,  apple  juice and, to a lesser  extent,  sparkling
beverages. The increase in gross and net sales was partially offset by decreased
sales  primarily  of energy  drinks in  8.3-ounce  cans,  Smoothies,  E2O Energy
Water(R),  Soy Smoothies,  Energade(R) energy sports drinks, and teas, lemonades
and cocktails.

     During 2003,  sales outside of California  represented 47% of our aggregate
sales, as compared to approximately 42% of our aggregate sales in 2002. Sales to
distributors  outside  the United  States  during 2003  amounted  to  $1,612,000
compared to $1,242,000 in 2002.

     Our customers are typically retail and specialty chains,  club stores, mass
merchandisers, convenience chains, full service beverage distributors and health
food distributors.  In 2003, sales to retailers represented 47% of our revenues,
sales to full service distributors  represented 37% of our revenues and sales to
health food distributors represented 10% of our revenues.

                                       20

<PAGE>

     In 2003,  we introduced a carbonated  lo-carb  Monster  Energy(R)  drink in
16-ounce  cans,  a carbonated  energy Deuce drink in 16-ounce  cans, a diet root
beer Natural Soda, a 100% Apple Juice in aseptic  pouches,  and regular and diet
sparkling Lemonades and Orangeades in 12-ounce glass bottles.

     Sales of our dual-branded 100% juice line named "Juice Blast(R)", which was
launched  in  conjunction  with  Costco and is sold  nationally  through  Costco
stores,  were lower in 2003 than in 2002. We have, 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 the variety pack
remains fresh and different for consumers.

     In  September  2000,  HBC,  through its wholly owned  subsidiary  Blue Sky,
acquired the Blue Sky(R)  Natural Soda  business.  The Blue Sky(R)  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 seltzer waters in 12-ounce cans and a
Blue Energy drink in  8.3-ounce  cans.  During the year,  we continued to expand
distribution  of the Blue Sky  products  into  mainstream  grocery  chain stores
throughout the country.

     In May 2001,  HBC,  through  its  wholly  owned  subsidiary  Junior  Juice,
acquired the Junior Juice(R) beverage business. The Junior Juice(R) product line
is comprised of a line of 100% juices packed in 4.23-ounce  aseptic packages and
is targeted at toddlers.

     During 2003, we entered into several new  distribution  agreements  for the
sale of our products,  both within and outside the United  States.  As discussed
under "ITEM 1 BUSINESS - MANUFACTURE  and  DISTRIBUTION",  we anticipate that we
will continue  building our national sales force in 2004 to support and grow the
sales of our products.

     A chain grocery store strike in Southern California, which commenced during
the last quarter of 2003, adversely affected sales of those of our products that
are carried by the stores concerned. However, the drop in sales of such products
was partially  offset by increased  sales of certain of those  products that are
carried by other retailers in Southern California.

     In 2002,  we  introduced a Sparkling  Cider 100% juice drink in a 1.5 liter
Magnum glass bottle.  However,  due to limited reports of some bottles breaking,
we promptly  recalled  the  product.  We are  pursuing a claim for the costs and
losses incurred by us. We will reevaluate  relaunching this product once certain
production issues are resolved to our satisfaction.

     At the beginning of 2004, we launched a new  carbonated  energy drink under
the Lost(R)  brand name,  in a 16-ounce  can. The Lost(R) brand name is owned by
Lost  International LLC and the drinks are produced,  sold and distributed by us
under exclusive license from Lost International LLC.

     During  2004,  we were  awarded  an  exclusive  contract  by the  State  of
California,   Department  of  Health   Services   Women,   Infant  and  Children
Supplemental  Nutrition  Branch, to supply 100% Apple juice and 100% Apple Grape
juice in 64-ounce PET plastic  bottles.  See "ITEM 1 BUSINESS - MANUFACTURE  and
DISTRIBUTION."

     We continue to incur  expenditures  in connection  with the development and
introduction of new products and flavors.

     Value Drivers of our Business

     We  believe  that  the  key  value  drivers  of our  business  include  the
following:

o    Profitable  Growth - We  believe  healthy  brands - properly  supported  by
     marketing  and  innovation,   targeted  to  a  broad  consumer   base-drive
     profitable  growth.  We  continue  to  broaden  our  family of  brands.  In
     particular, we are expanding and growing our specialty beverages and energy
     drinks to  provide  more  alternatives  to  consumers.  We are  focused  on
     maintaining or increasing  profit margins.  We believe that tailored brand,
     package,  price and channel  strategies help achieve  profitable growth. We
     are implementing  these  strategies with a view to accelerating  profitable
     growth.

                                       21

<PAGE>

o    Cost  Management - The principal  focus of cost management will continue to
     be on supplies and cost reduction.  One key area of focus, for example,  is
     to  decrease  raw  material   costs,   co-packing   fees  and  general  and
     administrative costs as a percentage of net operating revenues. Another key
     area of focus is the  reduction in inventory  levels.  However,  due to the
     expansion in the number of our  products as well as increased  sales levels
     in 2003, overall inventory levels increased.

o    Efficient Capital Structure - Our capital structure is intended to optimize
     our costs of capital.  We believe our strong capital position,  our ability
     to raise funds at low  effective  cost and  overall low costs of  borrowing
     provide a competitive advantage.

     We believe that these value drivers, when properly implemented, will result
in (1)  maintaining  and  improving  our  gross  profit  margin;  (2)  providing
additional  leverage over time through  reduced  expenses as a percentage of net
operating revenues; and (3) optimizing our cost of capital. The ultimate measure
of  success  is and will be  reflected  in our  current  and  future  results of
operations.

     Gross and net operating revenues, gross profits,  operating income, and net
income and net income per share  represent key  measurements  of the above value
drivers.  In 2003,  gross operating  revenues  totaled $138.5  million,  a 19.9%
increase from 2002. Net operating  revenues totaled $110.4 million,  an increase
of 19.9% over 2002. Gross profit totaled $43.8 million in 2003, a 31.7% increase
from 2002.  Operating income was $9.8 million compared to $5.3 million for 2002.
Net income was $5.9 million as compared to $3.0 million for 2002. Net income per
share  (diluted)  was  $0.55  from  $0.29  per  diluted  share  in  2002.  These
measurements will continue to be a key management focus in 2004 and beyond.  See
also "Results of Operations for the Year Ended December 31, 2003 Compared to the
Year Ended December 31, 2002.

     In 2003, the Company had working  capital of $17.2 million  compared to $15
million as of December 31,  2002.  In 2003,  our net cash  provided by operating
activities was approximately $5.5 million, a 101% increase from 2002.  Principal
uses of cash flows are purchases of inventory,  increases in accounts receivable
and other assets,  acquisition of property and equipment and trademark  licenses
and  trademarks.  Repayment of our debt and accounts  payable are expected to be
and remain our principal  recurring use of cash and working  capital funds.  See
also LIQUIDITY AND CAPITAL RESOURCES.

     Opportunities, Challenges and Risks

     Looking forward, our management has identified certain challenges and risks
that demand the attention of the beverage industry and our company.  Increase in
consumer and regulatory  awareness of the health  problems  arising from obesity
and inactive lifestyles  represents a challenge.  We recognize that obesity is a
complex and serious public health  problem.  Our commitment to consumers  begins
with our broad  product  line and a wide  selection  of diet,  light and lo-carb
beverages,  juices and juice drinks, sports drinks and waters and energy drinks.
We  continuously  strive  to  meet  changing  consumer  needs  through  beverage
innovation, choice and variety.

     Our historical  success is  attributable,  in part, to our  introduction of
different and innovative  beverages.  Our future  success will depend,  in part,
upon our  continued  ability to develop and introduce  different and  innovative
beverages,  although there can be no assurance of our ability to do so. In order
to retain and expand our market share, we must continue to develop and introduce
different and  innovative  beverages and be competitive in the areas of quality,
health,   method  of  distribution,   brand  image  and  intellectual   property
protection.  The beverage industry is subject to changing  consumer  preferences
and shifts in consumer  preferences may adversely affect companies that misjudge
such preferences.

                                       22

<PAGE>

     In addition, other key challenges and risks that could impact our company's
future financial results include, but are not limited to:

     o    maintenance of our brand images and product quality;

     o    profitable  expansion  and  growth  of our  family  of  brands  in the
          competitive market place (See also "ITEM 1 BUSINESS - COMPETITION" and
          "SALES AND MARKETING");

     o    restrictions  on imports  and  sources of supply;  duties or  tariffs;
          changes  in  government  regulations;  o  protection  of our  existing
          intellectual  property  portfolio of trademark licenses and trademarks
          and the continuous  pursuit of new and  innovative  trademarks for our
          expanding product lines; and

     o    the imposition of additional restrictions.

     We believe that the following opportunities exist for us:

     o    growth potential for  non-alcoholic  beverage  categories  including -
          energy drinks, carbonated soft drinks, juices and juice drinks, sports
          drinks and water;

     o    new product  introductions  intended  to  contribute  to higher  gross
          profits;

     o    premium packages intended to generate strong revenue growth;

     o    significant  package,  pricing and channel  opportunities  to maximize
          profitable growth; and

     o    proper positioning to capture industry growth.


                                       23

<PAGE>


Results of Operations

<TABLE>
<S>                                 <C>             <C>             <C>            <C>          <C>            
  
                                                                                       Percentage Change
                                                                                   -------------------------
                                          2003            2002           2001        03 vs. 02    02 vs. 01
                                    --------------- --------------- -------------- ------------ ------------
Gross sales                          $ 138,454,345   $ 115,490,019   $ 99,693,390        19.9%        15.8%
Less:  Discounts, allowances
   and promotional payments            28,102,149      23,443,657     19,035,073        19.9%        23.2%
                                    --------------- --------------- -------------- ------------ ------------
Net sales                              110,352,196      92,046,362     80,658,317        19.9%        14.1%
Cost of sales                           66,577,168      58,802,669     51,796,539        13.2%        13.5%
                                    --------------- --------------- -------------- ------------ ------------
Gross profit                            43,775,028      33,243,693     28,861,778        31.7%        15.2%
Gross profit margin                          39.7%           36.1%          35.8%

Selling, general and                    33,887,045      27,896,202     22,803,433        21.5%        22.3%
   administrative expenses
Amortization of trademark
   license and trademarks                   61,888          54,558        507,488        13.4%       (89.2%)
                                    --------------- --------------- -------------- ------------ ------------
Operating income                         9,826,095       5,292,933      5,550,857        85.6%        (4.6%)
Operating income as a percent
   of net sales                               8.9%            5.8%           6.9%
   
Net nonoperating expense                    67,013         227,758        518,602       (70.6%)      (56.1%)
                                    --------------- --------------- -------------- ------------ ------------
Income before provision for
   income taxes                          9,759,082       5,065,175      5,032,255        92.7%         0.7%
   
Provision for income taxes               3,828,678       2,035,980      2,012,902        88.1%         1.1%
                                    --------------- --------------- -------------- ------------ ------------
Effective tax rate                           39.2%           40.2%          40.0%

Net income                             $ 5,930,404     $ 3,029,195    $ 3,019,353        95.8%         0.3%
                                    =============== =============== ============== ============ ============
Net income as a percent of net
   sales                                      5.4%            3.3%           3.7%

Net income per common share:
   Basic                               $      0.58     $      0.30    $      0.30        93.3%         0.0%
   Diluted                             $      0.55     $      0.29    $      0.29        89.7%         0.0%

</TABLE>


     Results of Operations  for the Year Ended December 31, 2003 Compared to the
Year Ended December 31, 2002

     Gross Sales.  For the year ended December 31, 2003, gross sales were $138.5
million, an increase of $23.0 million or 19.9% higher than gross sales of $115.5
million for the year ended  December  31,  2002.  The increase in gross sales is
primarily  attributable to the  introduction of new products and increased sales
of certain of our existing products as discussed below in "Net Sales."

     Net Sales.  For the year ended  December  31,  2003,  net sales were $110.4
million,  an increase of $18.3  million or 19.9%  higher than net sales of $92.0
million for the year ended  December  31,  2002.  The  increase in net sales was
primarily  attributable  to sales of our  Monster  Energy(TM)  drink,  which was
introduced in April 2002, as well as increased  sales of Natural  Sodas,  Junior
Juice and, to a lesser extent,  sparkling  beverages.  The increase in net sales
was partially  offset by decreased sales of functional  drinks,  smoothies,  E2O
Energy Water,  Energade(R)  energy sports drinks,  and children's  multi-vitamin
juice drinks as well as an increase in  discounts,  allowances  and  promotional
payments.

     Gross Profit.  Gross profit was $43.8  million for the year ended  December
31, 2003,  an increase of $10.5  million or 31.7% over the $33.2  million  gross
profit for the year ended December 31, 2002. Gross profit as a percentage of net
sales was 39.7% for the year ended December 31, 2003 which was higher than gross
profit as a  percentage  of net sales of 36.1% for the year ended  December  31,
2002. The increase in gross profit was primarily  attributable  to increased net
sales.  Although a greater  percentage of our sales  comprised  products  having
higher  gross  margins than the prior year,  the increase in profit  margins was
partially reduced by higher  promotional  payments and allowances to promote our
products.

                                       24

<PAGE>

     Total Operating  Expenses.  Total operating expenses were $33.9 million for
the year ended  December  31,  2003,  an increase of $6.0  million or 21.5% over
total operating  expenses of $28.0 million for the year ended December 31, 2002.
Total  operating  expenses as a percentage  of net sales  slightly  increased to
30.8% for the year  ended  December  31,  2003,  from  30.4% for the year  ended
December  31,  2002.  The increase in total  operating  expenses  was  primarily
attributable to increased  selling,  general and  administrative  expenses.  The
increase in total operating  expenses as a percentage of net sales was primarily
attributable  to the  comparatively  larger  increase  in  selling,  general and
administrative expenses than the increase in net sales.

     Selling,  General and Administrative.  Selling,  general and administrative
expenses were $33.9 million for the year ended December 31, 2003, an increase of
$6.0 million or 21.5% over selling, general and administrative expenses of $27.9
million  for  the  year  ended   December   31,  2002.   Selling,   general  and
administrative  expenses as a percentage of net sales increased to 30.7% for the
year ended  December  31, 2003 from 30.3% for the year ended  December 31, 2002.
Selling  expenses  were $20.1  million for the year ended  December 31, 2003, an
increase of $4.0 million or 25.1% over selling expenses of $16.1 million for the
year ended  December 31,  2002.  Selling  expenses as a percentage  of net sales
increased to 18.2% for the year ended  December 31, 2003 from 17.4% for the year
ended  December  31,  2002.  The  increase  in selling  expenses  was  primarily
attributable to increased  distribution  (freight) and storage  expenses,  trade
development activities including cooperative arrangements with our distributors,
sponsorships and promotions,  in-store  demonstrations and merchandise  displays
which was partially  offset by decreased  expenditures  for graphic  design.  In
addition,  we  incurred  expenses  of  approximately  $267,000  during  2003  in
connection with our sponsorship of the Las Vegas Monorail as part of our efforts
to promote our Monster product line.  General and  administrative  expenses were
$13.8 million for the year ended  December 31, 2003, an increase of $2.0 million
or 16.6% over general and administrative  expenses of $11.8 million for the year
ended December 31, 2002. General and administrative  expenses as a percentage of
net sales were 12.5% for the year ended  December  31,  2003 which was  slightly
lower than general and  administrative  expenses as a percentage of net sales of
12.9% for the year  ended  December  31,  2002.  The  increase  in  general  and
administrative  expenses was  primarily  attributable  to an increase in payroll
costs  as we  expanded  our  headcount,  as well  as fees  paid  for  legal  and
accounting services and increased travel and insurance expenses. The decrease in
general and  administrative  expenses as a percentage of net sales was primarily
attributable to the increase in net sales and the  comparatively  lower increase
in payroll costs.

     Amortization of Trademark License and Trademarks. Amortization of trademark
license and  trademarks  was $62,000 for the year ended  December 31,  2003,  an
increase of $7,000 from  amortization  of trademark  license and  trademarks  of
$55,000 for the year ended  December 31, 2002. The increase in  amortization  of
trademark license and trademarks was due to the acquisition of trademarks during
the year ended December 31, 2003.

     Operating  Income.  Operating  income was $9.8  million  for the year ended
December  31,  2003,  compared to $5.3  million for the year ended  December 31,
2002. The $4.5 million increase in operating  income was primarily  attributable
to increased gross profits,  which was partially  offset by increased  operating
expenses.

     Net Nonoperating Expense. Net nonoperating expense was $67,000 for the year
ended December 31, 2003, which was $161,000 lower than net nonoperating  expense
of $228,000  for the year ended  December  31, 2002.  Net  nonoperating  expense
consists of interest and  financing  expense and interest  income.  Interest and
financing expense for the year ended December 31, 2003 was $73,000,  as compared
to $231,000 for the year ended  December 31, 2002.  The decrease in interest and
financing  expense was  primarily  attributable  to decreased  interest  expense
incurred on our borrowings  which was primarily  attributable to the decrease in
outstanding loan balances and lower interest rates.  Interest and royalty income
for the year ended December 31, 2003 was $6,000,  as compared to interest income
of $3,000 for the year ended December 31, 2002. The increase in interest  income
was primarily  attributable  to an increase in the cash available for investment
during the year ended December 31, 2003.

                                       25

<PAGE>

     Provision for Income  Taxes.  Provision for income taxes for the year ended
December  31, 2003 was $3.8  million  which was an  increase of $1.8  million as
compared to the  provision  for income  taxes of $2.0 million for the year ended
December 31, 2002.  The  increase in  provision  for income taxes was  primarily
attributable to the increase in operating income. The effective combined federal
and state tax rate for 2003 was 39.2%,  which was lower than the  effective  tax
rate of 40.2% for 2002 due to the  increase  in the  apportionment  of sales and
related state taxes to various states outside of California.

     Net Income.  Net income was $5.9  million for the year ended  December  31,
2003,  which was an increase  of $2.9  million as compared to net income of $3.0
million for the year ended  December  31,  2002.  The increase in net income was
primarily  attributable  to the  $10.5  million  increase  in gross  profit  and
decrease in  nonoperating  expense of $161,000  for the year ended  December 31,
2003 which was partially offset by increased  operating expenses of $6.0 million
and an increase in the provision of income taxes of $1.8 million.

     Results of Operations  for the Year Ended December 31, 2002 Compared to the
Year Ended December 31, 2001

     Gross Sales.  For the year ended December 31, 2002, gross sales were $115.5
million,  an increase of $15.8 million or 15.8% higher than gross sales of $80.7
million for the year ended  December  31,  2001.  The increase in gross sales is
primarily  attributable to the  introduction of new products and increased sales
of certain of our existing products as discussed below in "Net Sales."

     Net  Sales.  For the year ended  December  31,  2002,  net sales were $92.0
million,  an increase of $11.3  million or 14.1%  higher than net sales of $80.7
million for the year ended  December  31,  2001.  The  increase in net sales was
primarily  attributable  to sales  of our  Monster  EnergyTM  drink,  which  was
introduced  in April 2002,  as well as  increased  sales of Natural  Sodas,  E2O
Energy Water(R),  which was introduced in June 2001,  Energade(R)  energy sports
drinks,  which were  introduced in July 2001,  apple juice,  and Soy  Smoothies,
which were introduced in December 2001. We also  benefited,  to a lesser extent,
from  increased  sales of the  children's  multi-vitamin  juice  drinks,  Junior
Juice(R),  which was  acquired  in May 2001,  and  smoothies  in P.E.T.  plastic
bottles.  The increase in net sales was partially  offset by decreased  sales of
Signature  Soda, Hard e, functional  drinks,  teas,  lemonades and cocktails and
smoothies  in  cans  as  well  as  an  increase  in  discounts,  allowances  and
promotional payments, notably higher coupon costs.

     Gross Profit.  Gross profit was $33.2  million for the year ended  December
31,  2002,  an increase of $4.3  million or 15.2% over the $28.9  million  gross
profit for the year ended December 31, 2001. Gross profit as a percentage of net
sales was 36.1% for the year ended  December 31, 2002 which was slightly  higher
than  gross  profit as a  percentage  of net  sales of 35.8% for the year  ended
December 31, 2001.  The increase in gross profit was primarily  attributable  to
increased  net  sales.  Although  a greater  percentage  of our sales  comprised
products having higher gross margins than the prior year, the increase in profit
margins was reduced by higher promotional payments and allowances to promote our
products notably higher coupon costs.

     Total Operating  Expenses.  Total operating expenses were $28.0 million for
the year ended  December  31,  2002,  an increase of $4.7  million or 19.9% over
total operating  expenses of $23.3 million for the year ended December 31, 2001.
Total  operating  expenses as a percentage of net sales  increased to 30.4 % for
the year ended  December  31, 2002,  from 28.9% for the year ended  December 31,
2001. The increase in total  operating  expenses was primarily  attributable  to
increased selling,  general and administrative  expenses.  The increase in total
operating  expenses as a percentage of net sales was primarily  attributable  to
the  comparatively  larger  increase  in  selling,  general  and  administrative
expenses than the increase in net sales.

                                       26

<PAGE>

     Selling,  General and Administrative.  Selling,  general and administrative
expenses were $27.9 million for the year ended December 31, 2002, an increase of
$5.1 million or 22.3% over selling, general and administrative expenses of $22.8
million  for  the  year  ended   December   31,  2001.   Selling,   general  and
administrative  expenses as a percentage of net sales increased to 30.3% for the
year ended  December 31, 2002,  from 28.3% for the year ended December 31, 2001.
Selling  expenses  were $16.1  million for the year ended  December 31, 2002, an
increase of $3.7 million or 29.9% over selling expenses of $12.4 million for the
year ended  December 31,  2001.  Selling  expenses as a percentage  of net sales
increased to 17.4% for the year ended December 31, 2002, from 15.3% for the year
ended  December  31,  2001.  The  increase  in selling  expenses  was  primarily
attributable  to  increased   distribution   (freight)  and  storage   expenses,
advertising,   point-of-sale   materials  and  merchandise  displays,   in-store
demonstrations  and  graphic  design.  The  increase  in  selling  expenses  was
partially  offset by a  decrease  in  expenditures  for  premiums.  General  and
administrative expenses were $11.8 million for the year ended December 31, 2002,
an increase of $1.4 million or 13.3% over general and administrative expenses of
$10.4 million for the year ended December 31, 2001.  General and  administrative
expenses as a percentage of net sales were 12.9% for the year ended December 31,
2002 which was consistent with the year ended December 31, 2001. The increase in
general and administrative expenses was primarily attributable to an increase in
payroll  costs,  charitable  contributions,  fees paid for legal and  accounting
services  and   increased   travel   expenses  as  well  as  other  general  and
administrative  expenses. The decrease in general and administrative expenses as
a  percentage  of net sales was  primarily  attributable  to the increase in net
sales and the comparatively lower increase in payroll costs.

     Amortization of Trademark License and Trademarks. Amortization of trademark
license and  trademarks  was $55,000 for the year ended  December  31,  2002,  a
decrease of $452,000 from  amortization  of trademark  license and trademarks of
$507,000 for the year ended December 31, 2001. The decrease in  amortization  of
trademark  license  and  trademarks  was due to the  adoption  of  Statement  of
Financial  Accounting  Standards  ("SFAS") No. 142 in the first  quarter of 2002
(Note  1  of  the  financial   statements)  which  eliminated   amortization  on
indefinite-lived intangible assets.

     Operating  Income.  Operating  income was $5.3  million  for the year ended
December  31,  2002,  compared to $5.6  million for the year ended  December 31,
2001. The $258,000  decrease in operating  income was primarily  attributable to
increased  operating  expenses,  which was partially  offset by increased  gross
profit.

     Net Nonoperating  Expense.  Net  nonoperating  expense was $228,000 for the
year ended  December 31, 2002,  which was $291,000  lower than net  nonoperating
expense of $519,000  for the year ended  December  31,  2001.  Net  nonoperating
expense consists of interest and financing expense and interest income. Interest
and  financing  expense for the year ended  December 31, 2002 was  $231,000,  as
compared to $528,000  for the year ended  December  31,  2001.  The  decrease in
interest and financing expense was primarily  attributable to decreased interest
expense  incurred on our  borrowings  which was  primarily  attributable  to the
decrease in outstanding loan balances and lower interest rates.  Interest income
for the year ended December 31, 2002 was $3,000,  as compared to interest income
of $9,000 for the year ended December 31, 2001. The decrease in interest  income
was primarily  attributable  to a reduction in the cash available for investment
during the year ended December 31, 2002.

     Provision for Income  Taxes.  Provision for income taxes for the year ended
December 31, 2002 was $2.0 million  which was  comparable  to the  provision for
income taxes of $2.0 million for the year ended December 31, 2001. The effective
combined federal and state tax rate for 2002 was 40.2%,  which was comparable to
the effective tax rate of 40.0% for 2001.

     Net Income.  Net income was $3.0  million for the year ended  December  31,
2002,  which was  comparable to net income for the year ended December 31, 2001.
The $4.3 million  increase in gross profit and decrease in nonoperating  expense
of  $291,000  for the year  ended  December  31,  2002 was  offset by  increased
operating expenses of $4.7 million.

                                       27

<PAGE>

Liquidity and Capital Resources

     As of December 31, 2003,  the Company had working  capital of  $17,196,000,
compared to working capital of $14,950,000 as of December 31, 2002. The increase
in  working  capital  was  primarily  attributable  to net income  earned  after
adjustments  for certain  noncash  expenses,  primarily  depreciation  and other
amortization,  amortization of trademark license and trademarks,  and a decrease
in deposits and other assets and an increase in deferred  income taxes which was
partially  offset by payments made in reduction of long-term  debt and increased
expenditures for the acquisition of property, trademark license and trademarks.

     Net cash provided by operating  activities  for the year ended December 31,
2003 was  $5,484,000,  compared to cash  provided  by  operating  activities  of
$2,727,000  during 2002.  The increase in cash provided by operating  activities
was primarily attributable to decreases in accounts receivable,  and an increase
in accounts payable,  income taxes payable,  accrued  compensation,  and accrued
liabilities which was partially offset by increases in inventories. Purchases of
inventories,  increases in accounts receivable and other assets,  acquisition of
property and equipment,  acquisition of trademark  licenses and trademarks,  and
repayment of our line of credit and accounts  payable are expected to remain our
principal recurring use of cash and working capital funds.

     Net cash used in investing  activities for the year ended December 31, 2003
was $2,438,000 as compared to net cash used in investment  activities of $92,000
in 2002.  The increase in net cash used in investing  activities  was  primarily
attributable to increased purchases of property and equipment and an increase in
trademarks as well as a decrease in  expenditures  for deposits and other assets
in 2003 which was  partially  offset by proceeds  from the sale of property  and
equipment.  Management,  from time to time, considers the acquisition of capital
equipment,  particularly,  specific  items of production  equipment  required to
produce certain of our products, 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 used in financing  activities  was  $2,486,000 for the year ending
December  31,  2003,  as compared to net cash used in  financing  activities  of
$2,344,000  in 2002.  The increase in net cash used in financing  activities  as
compared to the prior year was  primarily  attributable  to increased  principal
payments of long-term  debt,  which was partially  offset by increased  proceeds
from the issuance of common stock during 2003.

     HBC has a  credit  facility  from  Comerica  Bank-California  ("Comerica"),
consisting of a revolving line of credit and a term loan. 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 loan are secured by substantially all of HBC's assets, including
accounts  receivable,  inventory,  trademarks,  trademark  licenses  and certain
equipment.  In accordance  with the provisions of the credit  facility,  HBC can
borrow up to $12.0 million under its line of credit, reducing to $6.0 million by
September  2004.  The revolving  line of credit remains in full force and effect
through September 2005. Interest on borrowings under the line of credit is 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 HBC from time to time.  At December  31,  2003,  HBC had no
balances  outstanding under the credit facility and borrowing capacity available
to the Company from Comerica under the credit facility was $7,800,000.

     The  terms  of the  Company's  line of  credit  contain  certain  financial
covenants including certain financial ratios and annual net income requirements.
The line of credit contains  provisions  under which  applicable  interest rates
will be adjusted in increments  based on the  achievement  of certain  financial
ratios.  The Company was in compliance with its financial  ratios and annual net
income  requirements  and  obtained a waiver from  Comerica  with regards to its
capital expenditure limitations at December 31, 2003.

                                       28

<PAGE>

     If any event of default  shall occur for any reason,  whether  voluntary or
involuntary,  Comerica may declare all or any portion outstanding on the line of
credit  immediately due and payable,  exercise rights and remedies  available to
secured parties under the Uniform  Commercial Code,  institute legal proceedings
to foreclose upon the lien and security  interest granted or for the sale of any
or all collateral.

     Purchase  obligations  represent  commitments  made by the  Company and its
subsidiaries  to various  suppliers for raw materials used in the  manufacturing
and packaging of our products. These obligations vary in terms.

     Other  commitments  represent our obligations  under our agreement with the
Las Vegas Monorail Company. See also "ITEM 1 - SALES AND MARKETING."

     The following represents a summary of the Company's contractual obligations
and related scheduled maturities as of December 31, 2003:


<TABLE>
<CAPTION>
                                 Long-Term    
                                  Debt &            
                               Capital Lease     Operating         Purchase           Other
                                Obligations        Leases          Obligations         Commitments       Total
                             ----------------- ---------------- ------------------ ------------------ ------------------
<S>                          <C>               <C>              <C>                <C>                <C>               
Year ending December 31:
2004                             $ 244,271      $   893,359       $  6,732,789       $   750,000       $  8,620,419
2005                               211,484          970,359          7,259,120           250,000          8,690,963
2006                               146,580        1,017,128          7,259,120                            8,422,828
2007                                              1,030,218          1,460,000                            2,490,218
2008                                                773,997                                                 773,997
Thereafter                                        1,199,730                                               1,199,730
                             ----------------- ---------------- ------------------ ----------------- ------------------
                                 $ 602,335      $ 5,884,791       $ 22,711,029       $ 1,000,000       $ 30,198,155
                             ================= ================ ================== ================= ==================

</TABLE>


     Management  believes that cash  available from  operations,  including cash
resources and the revolving  line of credit,  will be sufficient for our working
capital needs, including purchase commitments for raw materials, payments of tax
liabilities,  debt  servicing,  expansion and  development  needs,  purchases of
shares of our  common  stock,  as well as any  purchases  of  capital  assets or
equipment through December 31, 2004.

Accounting Policies and Pronouncements

     Critical Accounting Policies

     The Company's  consolidated financial statements are prepared in accordance
with accounting  principals  generally  accepted in the United States of America
("GAAP".)  GAAP  requires the Company to make  estimates  and  assumptions  that
affect the reported amounts in our consolidated  financial  statements including
various  allowances and reserves for accounts  receivable and  inventories,  the
estimated  lives of long-lived  assets and trademarks and trademark  licenses as
well as claims and contingencies arising out of litigation or other transactions
that occur in the normal  course of  business.The  following  summarize the most
significant accounting and reporting policies and practices of the Company:

     Trademark  License  and  Trademarks  -  Trademark  license  and  trademarks
     primarily  represent the Company's  exclusive  ownership of the Hansen's(R)
     trademark in connection  with the  manufacture,  sale and  distribution  of
     beverages and water and non-beverage products. 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  also owns the Blue
     Sky(R)  trademark,  which was  acquired in September  2000,  and the Junior
     Juice(R)  trademark,  which was  acquired  in May 2001.  During  2002,  the
     Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets." Under
     the provisions on SFAS No. 142, the Company  discontinued  amortization  on
     indefinite-lived  trademark  licenses and  trademarks  while  continuing to
     amortize remaining trademark licenses and trademarks over one to 25 years.

                                       29

<PAGE>

     In  accordance  with SFAS No. 142, we evaluate  our  trademark  license and
     trademarks  annually for  impairment.  We measure  impairment by the amount
     that the carrying  value exceeds the estimated  fair value of the trademark
     license  and  trademarks.  The fair  value is  calculated  using the income
     approach.  Based on our annual impairment  analysis performed in the fourth
     quarter  of 2003,  the  estimated  fair  values of  trademark  license  and
     trademarks exceeded the carrying value.

     Long-Lived Assets - Management regularly reviews property and equipment and
     other long-lived assets,  including certain identifiable  intangibles,  for
     possible  impairment.  This review occurs  annually,  or more frequently if
     events or changes in  circumstances  indicate  the  carrying  amount of the
     asset may not be  recoverable.  If there is  indication  of  impairment  of
     property and equipment or amortizable  intangible  assets,  then management
     prepares  an  estimate  of future  cash  flows  (undiscounted  and  without
     interest  charges)  expected  to  result  from the use of the asset and its
     eventual disposition. If these cash flows are less than the carrying amount
     of the asset,  an impairment  loss is recognized to write down the asset to
     its estimated fair value.  The fair value is estimated at the present value
     of  the  future  cash  flows  discounted  at  a  rate   commensurate   with
     management's  estimates of the business  risks.  Annually,  or earlier,  if
     there is  indication of  impairment  of  identified  intangible  assets not
     subject to amortization,  management compares the estimated fair value with
     the carrying amount of the asset. An impairment loss is recognized to write
     down the intangible asset to its fair value if it is less than the carrying
     amount.  Preparation of estimated  expected future cash flows is inherently
     subjective  and is based  on  management's  best  estimate  of  assumptions
     concerning expected future conditions. No impairments were identified as of
     December 31, 2003.

     Management  believes that the accounting  estimate related to impairment of
     its long lived assets, including its trademark license and trademarks, is a
     "critical  accounting  estimate"  because:  (1) it is highly susceptible to
     change from period to period because it requires company management to make
     assumptions  about cash flows and discount  rates;  and (2) the impact that
     recognizing  an  impairment  would  have  on  the  assets  reported  on our
     consolidated  balance  sheet,  as well as net  income,  could be  material.
     Management's  assumptions  about  cash  flows and  discount  rates  require
     significant  judgment  because actual revenues and expenses have fluctuated
     in the past and are expected to continue to do so.

     In estimating future revenues,  we use internal  budgets.  Internal budgets
     are developed based on recent revenues data for existing  product lines and
     planned timing of future  introductions of new products and their impact on
     our future cash flows.

     Advertising  and  Promotional   Allowances  -  The  Company   accounts  for
     advertising  production  costs by expensing such production costs the first
     time the related advertising takes place. In addition, the Company supports
     its customers with promotional  allowances,  a portion of which is utilized
     for marketing and indirect  advertising  by them. In certain  instances,  a
     portion of the  promotional  allowances  payable to customers  based on the
     levels of sales to such customers,  promotion  requirements or expected use
     of the  allowances,  are  estimated by the Company.  If the level of sales,
     promotion  requirements  or use of the  allowances  are different from such
     estimates,  the  promotional  allowances  could,  to the  extent  based  on
     estimates,  require adjustments.  During 2002, the Company adopted Emerging
     Issues Task Force ("EITF") No. 01-9 which requires certain sales promotions
     and  customer  allowances  previously  classified  as selling,  general and
     administrative expenses to be classified as a reduction of sales or as cost
     of goods sold.  The Company has conformed its  presentation  of advertising
     and promotional allowances to comply with the provisions of EITF No. 01-9.

     Accounts Receivable - The Company evaluates the collectibility of its trade
     accounts  receivable based on a number of factors.  In circumstances  where
     the Company  becomes aware of a specific  customer's  inability to meet its
     financial  obligations to the Company,  a specific reserve for bad debts is
     estimated  and recorded  which  reduces the  recognized  receivable  to the
     estimated  amount the Company  believes will  ultimately  be collected.  In
     addition to specific  customer  identification  of potential bad debts, bad
     debt charges are recorded  based on the Company's  recent past loss history
     and  an  overall   assessment  of  past  due  trade   accounts   receivable
     outstanding.

                                       30

<PAGE>

     Inventories  -  Inventories  are  stated at the  lower of cost to  purchase
     and/or  manufacture the inventory or the current  estimated market value of
     the inventory.  The Company regularly  reviews its inventory  quantities on
     hand and  records a  provision  for excess  and  obsolete  inventory  based
     primarily on the Company's  estimated forecast of product demand and/or its
     ability to sell the products concerned and production requirements.  Demand
     for the Company's products can fluctuate significantly. Factors which could
     affect demand for the Company's products include  unanticipated  changes in
     consumer preferences, general market conditions or other factors, which may
     result in  cancellations  of advance  orders or a reduction  in the rate of
     reorders  placed  by  customers  and/or  continued  weakening  of  economic
     conditions.  Additionally,  management's estimates of future product demand
     may be  inaccurate,  which could  result in an  understated  or  overstated
     provision required for excess and obsolete inventory.

     Income  Taxes - Current  income tax  expense is the amount of income  taxes
     expected to be payable for the current year. A deferred income tax asset or
     liability is established for the expected future  consequences of temporary
     differences  in the  financial  reporting  and  tax  bases  of  assets  and
     liabilities.  The Company  considers  future  taxable  income and  ongoing,
     prudent and feasible tax planning  strategies in assessing the value of its
     deferred tax assets. If the Company  determines that it is more likely than
     not that these  assets will not be  realized,  the Company  will reduce the
     value  of  these  assets  to  their  expected  realizable  value,   thereby
     decreasing net income.  Evaluating the value of these assets is necessarily
     based on the Company's  judgment.  If the Company  subsequently  determined
     that the  deferred  tax  assets,  which  had been  written  down,  would be
     realized  in the  future,  the value of the  deferred  tax assets  would be
     increased,   thereby   increasing  net  income  in  the  period  when  that
     determination  was  made.  See Note 7 in Notes  to  Consolidated  Financial
     Statements.

     Newly Issued Accounting Pronouncements

     In November 2002, the Financial  Accounting Standards Board ("FASB") issued
FASB  Interpretation  No.  ("FIN") 45,  "Guarantor's  Accounting  and Disclosure
Requirements for Guarantees,  Including  Indirect  Guarantees of Indebtedness of
Others," an  interpretation  SFAS Nos. 5, 57 and 107, and  rescission of FIN 34,
"Disclosure of Indirect Guarantees of Indebtedness of Others." FIN 45 elaborates
on the  disclosures  to be made  by the  guarantor  in its  interim  and  annual
financial  statements about its obligations under certain guarantees that it has
issued.  It also  requires  that a guarantor  recognize,  at the  inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing the guarantee.  The initial  recognition and  measurement  provisions of
this  interpretation  are applicable on a prospective basis to guarantees issued
or modified  after  December 31, 2002,  while the  provisions of the  disclosure
requirements are effective for financial statements of interim or annual periods
ending after  December  15, 2002.  The Company  adopted such  interpretation  on
November  1,  2002  with  no  material  impact  to  the  consolidated  financial
statements.

     In January  2003,  the FASB  issued FIN 46(R),  "Consolidation  of Variable
Interest  Entities,"  an  interpretation  of ARB No. 51, and revised in December
2003. FIN 46(R) requires certain variable  interest  entities to be consolidated
by the primary  beneficiary of the entity if the equity  investors in the entity
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial  support  from other  parties.  FIN 46(R) is
effective  for all new  variable  interest  entities  created or acquired  after
December 31, 2003. For variable  interest  entities created or acquired prior to
December 31,  2003,  the  provisions  of FIN 46(R) must be applied for the first
interim or annual period  beginning  after March 15, 2004.  The Company does not
expect  that the  adoption  of FIN  46(R)  will  have a  material  impact on its
consolidated  financial  position,  results of operations or cash flows,  as the
Company has no interests in variable interest entities.

                                       31

<PAGE>

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Instruments with  Characteristics of Both Liabilities and Equity," as amended by
various  FASB  staff  positions  posted in  October  and  November  2003,  which
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 requires that an issuer  classify a financial  instrument that is within
its scope which may have previously been reported as equity,  as a liability (or
an asset in some  circumstances).  This  statement  is effective  for  financial
instruments  entered  into or  modified  after  May 31,  2003 and  otherwise  is
generally effective at the beginning of the first interim period beginning after
June 15,  2003,  except for  mandatorily  redeemable  financial  instruments  of
nonpublic entities, which are subject to the provision of this statement for the
first fiscal  period  beginning  after  December 15, 2004.  The Company does not
believe that the adoption of SFAS No. 150 will have a significant  impact on its
consolidated financial position, results of operations or cash flows.

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 of beverages are expressed in unit case volume. A "unit case" means a
unit of  measurement  equal to 192 U.S.  fluid  ounces of finished  beverage (24
eight-ounce  servings) or concentrate sold that will yield 192 U.S. fluid ounces
of finished beverage. Unit case volume of the Company means number of unit cases
(or unit case  equivalents)  of  beverages  directly or  indirectly  sold by the
Company. Sales of food bars and cereals are expressed in actual cases. A case of
food bars and cereals is defined as follows:

o    A fruit and grain  bar and  functional  nutrition  bar case  equals  ninety
     1.76-ounce bars.
o    A natural cereal case equals ten 13-ounce boxes measured by volume.
o    An active nutrition bar case equals thirty-two 1.4-ounce bars.

     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 our 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 not had
sufficient experience with many its newer product introductions 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 increased advertising
and promotional expenses. See also "ITEM 1. BUSINESS - SEASONALITY."

                                       32

<PAGE>

Unit Case Volume / Case Sales (in Thousands)

               2003          2002          2001            2000           1999
             ---------     --------      ---------      ----------    ----------
Quarter 1      4,219         3,597         3,091           2,451          2,287
Quarter 2      5,356         4,977         4,171           3,323          2,817
Quarter 3      6,221         5,146         4,271           3,157          3,148
Quarter 4      4,625         3,885         3,583           2,859          2,645
             ---------     --------      ---------      ----------    ----------
Total         20,421        17,605        15,116          11,790         10,897
             =========    =========      =========      ==========   ===========

Net Revenues (in Thousands)

               2003          2002          2001            2000          1999
            ---------     ----------    ----------     -----------   -----------
Quarter 1  $  22,086        $18,592      $16,908         $14,236        $13,836
Quarter 2     28,409         26,265       22,337          20,702         17,471
Quarter 3     33,291         26,985       23,011          20,434         18,969
Quarter 4     26,566         20,204       18,402          16,334         15,908
           ----------     ----------   -----------     -----------   -----------
Total      $ 110,352        $92,046      $80,658         $71,706        $66,184
           ==========    ===========   ===========    ============   ===========

Inflation

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

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 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 our  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.

     These  statements  are qualified by their terms and/or  important  factors,
many of which are outside our control, involve a number of risks,  uncertainties
and  other  factors,  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    Decreased  demand for our products  resulting from changes in consumer
          preferences;

     o    Changes in demand  that are  weather  related,  particularly  in areas
          outside of California;

     o    Competitive  products and pricing  pressures and the Company's ability
          to gain or maintain its share of sales in the  marketplace as a result
          of actions by competitors;

                                       33

<PAGE>

     o    The introduction of new products;

     o    An inability to achieve  volume growth  through  product and packaging
          initiatives;

     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, as well as changes in any other
          food and drug laws,  especially those that may affect the way in which
          the  Company's  products  are  marketed  and/or  labeled  and/or sold,
          including the contents  thereof,  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  Federal  Trade
          Commission, 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. 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 chains, specialty chain
          stores, club stores 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    Changes in product category consumption;

     o    Unforeseen economic and political changes;

     o    Possible recalls of the Company's products; and

     o    The Company's ability to make suitable arrangements for the co-packing
          of any of its products  including,  but not limited to, its energy and
          functional drinks in 8.3-ounce slim cans and 16-ounce cans,  smoothies
          in  11.5-ounce  cans,  E2O  Energy  Water(R),   Energade(R),   Monster
          Energy(R)  and  Lost(R)  energy  drinks,   soy  smoothies,   sparkling
          orangeades and lemonades in glass bottles and other products.

     The foregoing list of important factors is not exhaustive.

     Our actual results could be materially different from the results described
or anticipated by our forward-looking statements due to the inherent uncertainty
of  estimates,  forecasts  and  projections  and may be  better  or  worse  than
anticipated.  Given these uncertainties,  you should not rely on forward-looking
statements.  Forward-looking  statements represent our estimates and assumptions
only as of the date that they  were  made.  We  expressly  disclaim  any duty to
provide updates to forward-looking statements, and the estimates and assumptions
associated with them, after the date of this report, in order to reflect changes
in  circumstances  or  expectations  or the occurrence of  unanticipated  events
except to the extent required by applicable securities laws.

                                       34

<PAGE>


I
TEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

     In the normal  course of  business,  our  financial  position is  routinely
subject to a variety of risks.  The  principal  market risks (i.e.,  the risk of
loss arising from adverse  changes in market rates and prices) which the Company
is exposed to are  fluctuations  in commodity  prices  affecting the cost of raw
materials and changes in interest  rates of the Company's long term debt. We are
also subject to market risks with respect to the cost of commodities because our
ability to recover  increased  costs  through  higher  pricing is limited by the
competitive  environment in which we operate. We are also subject to other risks
associated  with the business  environment  in which we operate,  including  the
collectability of accounts receivable.

     At December 31, 2003, the majority of the Company's debt consisted of fixed
rather than  variable  rate debt.  The amount of variable  rate debt  fluctuates
during the year based on the Company's cash  requirements.  If average  interest
rates were to increase one percent for the year ended December 31, 2003, the net
impact on the Company's pre-tax earnings would have been insignificant.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  information  required to be furnished in response to this Item follows
the signature page hereto at pages 55 through 75.


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

     None.


ITEM 9A. CONTROLS AND PROCEDURES

     Under  the  supervision  and  with  the   participation  of  the  Company's
management,  including our Chief Executive Officer and Chief Financial  Officer,
we  have  evaluated  the  effectiveness  of  the  design  and  operation  of our
disclosure  controls and  procedures as of the end of the period covered by this
report.  Based  upon this  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer have  concluded  that the Company's  disclosure  controls and
procedures are adequate and effective to ensure that material information we are
required  to  disclose in reports  that we file or submit  under the  Securities
Exchange Act of 1934 is recorded, processed,  summarized and reported within the
time periods specified in SEC rules and forms.

     There have been no significant  changes in internal  control over financial
reporting  that occurred  during the fiscal  period  covered by this report that
have materially  affected,  or are reasonably likely to materially  affect,  the
registrant's internal control over financial reporting.

                                       35

<PAGE>


PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     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 October
or November, 2004.

     The members of our Board of  Directors  and our  executive  officers are as
follows:
     
               Name              Age                    Position
  --------------------------   -------   ---------------------------------------
  Rodney C. Sacks(1)             54      Chairman of the Board of Directors and
                                           Chief Executive Officer

  Hilton H. Schlosberg(1)        51      Vice Chairman of the Board of
                                           Directors, Chief Financial Officer,
                                           Chief Operating Officer and
                                           Secretary

  Benjamin M. Polk               53      Director

  Norman C. Epstein(2)(3)        63      Director

  Harold C. Taber, Jr. (2)       64      Director

  Mark S. Vidergauz(2)(3)        50      Director

  Mark Hall                      49      Senior Vice President, National Sales,
                                           Single-Serve Products of HBC

  Michael B. Schott              55      Vice President, National Sales,
                                           Single-Serve Products of HBC

  Kirk Blower                    54      Senior Vice President, Juice and
                                           Non-Carbonated Products of HBC

  Thomas J. Kelly                49      Vice President - Controller and
                                           Secretary of HBC


1  Member of the Executive Committee of the  Board of Directors

2  Member of the Audit Committee of the Board of Directors

3  Member of the Compensation Committee of the Board of Directors

     Rodney C. Sacks - 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.

     Hilton H.  Schlosberg  - 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 and 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.  Vice  Chairman,  Secretary and a
director of HBC from July 1992 to the present.

     Benjamin  M. Polk -  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.  Partner with  Winston & Strawn LLP (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)

                                       36

<PAGE>

     Norman C. Epstein - 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. - Director of the Company since July 1992.  Member of
the Audit  Committee of the Board of Directors  since April 2000.  President and
Chief Executive  Officer of HBC from July 1992 to June 1997.  Consultant for The
Joseph  Company  from  October  1997  to  March  1999  and  for  Costa  Macaroni
Manufacturing  Company from July 2000 to January 2002.  Director of Mentoring at
Biola University from July 2002 to present.

     Mark S. Vidergauz - 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.

     Mark Hall - Senior Vice  President,  Single-Serve  Products,  joined HBC in
1997. Prior to joining HBC, Mr. Hall spent three years with Arizona Beverages as
Vice President of Sales where he was responsible  for sales and  distribution of
Arizona products through a national network of beer  distributors and soft drink
bottlers.

     Michael Schott - Vice  President,  National Sales,  Single-Serve  Products,
joined HBC in 2002. Prior to joining HBC, Mr. Schott held a number of management
positions in the beverage industry including  president of Snapple Beverage Co.,
SOBE Beverage Co. and Everfresh Beverages,  respectively. Mr. Schott has over 30
years of experience in sales and marketing, primarily with beverage companies in
key executive and operational roles.

     Kirk Blower - Senior Vice President,  Juice and Non-Carbonated Products, of
HBC  since  1992.  Mr.  Blower  has  over 30 years of  experience  in sales  and
marketing, primarily with the Coca-Cola organization.

     Thomas J. Kelly - Vice  President - Controller  and  Secretary of HBC since
1992.  Prior to joining HBC, Mr. Kelly served as  controller  for Hansen  Foods,
Inc. Mr. Kelly is a Certified  Public  Accountant and has worked in the beverage
business for over 20 years.

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

Audit Committee and Audit Committee Financial Expert

     The  Company  has  a  separately   designated   standing  Audit   Committee
established in accordance  with Section  3(a)(58)(A) of the Securities  Exchange
Act of 1934, as amended (the "Exchange Act"). The members of the Audit Committee
are Messrs. Epstein (Chairman),  Taber and Vidergauz. The Board of Directors has
determined  that Mr. Epstein is (1) an "audit  committee  financial  expert," as
that term is defined in Item 401(h) of  Regulation  S-K of the Exchange Act, and
(2)  independent  as  defined by the  listing  standards  of Nasdaq and  Section
10A(m)(3) of the Exchange Act.

                                       37

<PAGE>

Code of Ethics

     We have  adopted  a Code  of  Ethics  that  applies  to all our  directors,
officers (including its principal executive officer, principal financial officer
and controller) and employees.  The Code of Ethics and any amendment to the Code
of Ethics, as well as any waivers that are required to be disclosed by the rules
of the SEC or Nasdaq may be obtained at no cost to you by writing or telephoning
us at the following address or telephone number:

                             Hansen Beverage Company
                              1010 Railroad Street
                                Corona, CA 92882
                                 (909) 739-6200
                                  (800) HANSENS


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.  Executive  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, 2003, all
Section  16(a)  filing  requirements   applicable  to  the  Company's  executive
officers,  directors  and greater than ten percent  stockholders  were  complied
with,  except that,  as reported in the annual  report on Form 10-K for the year
ended  December 31, 2002,  Form 5's in respect of option  grants  required to be
filed by each of Rodney C. Sacks and  Hilton H.  Schlosberg  were  inadvertently
filed late.


ITEM 11.          EXECUTIVE COMPENSATION

     The  following  tables set forth  certain  information  regarding the total
remuneration  earned and grants of options/ 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,  2003.  These  amounts  reflect  total cash
compensation  paid by the  Company  and its  subsidiaries  to these  individuals
during the years December 31, 2001 through 2003.

                                       38

<PAGE>

                           SUMMARY COMPENSATION TABLE
================================================================================
                                ANNUAL COMPENSATION                Long Term
                                                                  Compensation
----------------------------------------- --------------------------------------
Name and                                                Other       Securities
Principal                                   Bonus(2)    Annual      underlying
Positions             Year     Salary ($)     ($)    Compensation   Options (#)
--------------------------------------------------------------------------------
Rodney C. Sacks       2003     225,833      35,000     19,333(3)       150,000
Chairman, CEO         2002     225,504        -        10,331(3)       150,000
and Director          2001     194,400       8,000      7,314(3)          -
--------------------------------------------------------------------------------
Hilton H. Schlosberg  2003     225,833      35,000      7,753(3)       150,000
Vice-Chairman, CFO,   2002     225,504         -        7,753(3)       150,000
COO,President,        2001     194,400       8,000      7,314(3)          -
Secretary and      
Director                                   
--------------------------------------------------------------------------------
Mark J. Hall          2003     175,000      70,000      9,554(3)          -
Senior Vice President 2002     160,000      10,000      7,733(3)        20,000
Single Serve Products 2001     160,000       8,000      7,349(3)          -
--------------------------------------------------------------------------------
Michael Schott        2003     140,000      50,000     24,572(4)
Vice President        2002      57,256      20,000      7,311(5)        72,000
National Sales        2001        -           -           -               - 
Single Serve Products
--------------------------------------------------------------------------------
Kirk S. Blower        2003     123,000      10,000      7,761(3)
Senior Vice President 2002     118,000       4,000      7,238(3)        12,500
Juice and             2001     115,000       3,000      7,364(3)          -
Non-Carbonated       
Products
================================================================================


1    SALARY - Pursuant to employment  agreements,  Messrs.  Sacks and Schlosberg
     were entitled to an annual base salary of $225,833,  $226,748, and $209,952
     for 2003, 2002 and 2001 respectively.

2    BONUS - Payments  made in 2004,  2003 and 2002 are for  bonuses  accrued in
     2003, 2002 and 2001 respectively.

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    Includes  $7,200  for  auto  reimbursement  expense,  $10,000  for  housing
     expenses,  $1,200 for travel expenses,  and $6,172 for other  miscellaneous
     perquisites.

5    Includes  $2,945  for  auto  reimbursement  expenses,  $4,090  for  housing
     expenses and $276 for other miscellaneous perquisites.

                                       39

<PAGE>

               OPTION GRANTS FOR THE YEAR ENDED DECEMBER 31, 2003

<TABLE>
<S>                        <C>                 <C>               <C>          <C>             <C>          <C>   
============================================================================================= ===========================
                                                                                                 Potential realizable
                                                                                               value at assumed annual
                                                                                                 rates of stock price
                                                                                               appreciation for option
                                     Individual Grants                                                  term(2)
--------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
                                Number of         Percent of
                               Securities        total Options    Exercise
                               underlying         granted to       or base
                             Options granted     employees in       price       Expiration         5%           10%
           Name                    (#)               2003         ($/Share)        Date            ($)          ($)
--------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Rodney C. Sacks                 150,000 (1)           42.3%          $4.20       5/28/2013      $396,204     $1,004,057
--------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Hilton H. Schlosberg            150,000 (1)           42.3%          $4.20       5/28/2013      $396,204     $1,004,057
--------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Mark J. Hall                         -                 -              -             -              -             -
--------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Michael Schott                       -                 -               -             -              -             -
--------------------------- ------------------ ----------------- ------------ --------------- ------------ --------------
Kirk S. Blower                       -                 -               -             -              -             -
=========================== ================== ================= ============ =============== ============ ==============
</TABLE>


1    Options to purchase the Company's common stock become  exercisable in equal
     annual increments over 5 years beginning January 1, 2004.
     
2    The 5% and 10%  assumed  annual  rates  of  appreciation  are  provided  in
     accordance  with the rules and  regulations of the SEC and do not represent
     our estimates or projections of our future common stock price growth.


                AGGREGATED OPTION EXERCISES DURING THE YEAR ENDED
            DECEMBER 31, 2003 AND OPTION VALUES AT DECEMBER 31, 2003

<TABLE>
================================================================================
<CAPTION>
<S>                  <C>          <C>        <C>                 <C>
                                               Number of             Value of
                                               underlying            unexercised
                                               unexercised           in-the-money
                                                Options at           options at
                                             December 31, 2003     December 31, 2003
                       Shares                        (#)                 ($) 
                       aquired      Value    --------------------------------------
                     on exercise   Realized      Exercisable/        Exercisable/
      Name               (#)         ($)        Unexercisable       Unexercisable
-------------------- ------------ ---------- ------------------- ------------------
Rodney C.Sacks            -            -      167,500/270,000(1)  818,625/1,215,000
-------------------- ------------ ---------- ------------------- ------------------
Hilton H.Schlosberg       -            -      167,500/270,000(1)  818,625/1,215,000
-------------------- ------------ ---------- ------------------- ------------------
Mark J. Hall          116,000 (2)  $371,040     4,000/16,000(2)     19,400/77,600
-------------------- ------------ ---------- ------------------- ------------------
Michael Schott            -            -       12,000/60,000(3)    54,840/274,200
-------------------- ------------ ---------- ------------------- ------------------
Kirk S. Blower            -            -       12,500/12,500(4)     53,825/58,925
==================== ============ ========== =================== ================
</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, 2003,  granted  pursuant
     to Stock Option  Agreements  dated January 30, 1998 between the Company and
     Messrs.  Sacks and Schlosberg,  respectively;  options to purchase  100,000
     shares of common stock at $4.25 per share which are exercisable at December
     31, 2003,  granted  pursuant to Stock Option  Agreements  dated February 2,
     1999 between the Company and Messrs.  Sacks and  Schlosberg,  respectively;
     options to purchase  150,000  shares of common  stock at $3.57 per share of
     which 30,000 are  exercisable  at December 31,  2003,  granted  pursuant to
     Stock Option Agreements dated July 12, 2002 between the Company and Messrs.
     Sacks and Schlosberg,  respectively; and options to purchase 150,000 shares
     of  common  stock at $4.20  per  share of  which  none are  exercisable  at
     December 31, 2003 granted pursuant to Stock Option Agreements dated May 28,
     2003 between the Company and Messrs. Sacks and Schlosberg, respectively.

2    Includes  options to purchase  20,000  shares of common  stock at $3.57 per
     share of which 4,000 are exercisable at December 31, 2003, granted pursuant
     to a Stock Option Agreement dated July 12, 2002 between the Company and Mr.
     Hall.

                                       40

<PAGE>

3    Includes  options to purchase  72,000  shares of common  stock at $3.85 per
     share of which  12,000  are  exercisable  at  December  31,  2003,  granted
     pursuant  to a Stock  Option  Agreement  dated  August 9, 2002  between the
     Company and Mr. Schott.

4    Includes  options to purchase  12,500  shares of common  stock at $4.25 per
     share of which  10,000  are  exercisable  at  December  31,  2003,  granted
     pursuant to a Stock  Option  Agreement  dated  February 2, 1999 between the
     Company and Mr.  Blower;  and options to purchase  12,500  shares of common
     stock at $3.57 per share of which 2,500 are  exercisable  at  December  31,
     2003,  granted  pursuant to a stock  Option  Agreement  dated July 12, 2002
     between the Company and Mr. Blower.

Performance Graph

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

                           TOTAL SHAREHOLDER RETURNS

                           ANNUAL RETURN PERCENTAGES

For the years ended December 31,

Company Name/Index                1999      2000      2001      2002      2003
----------------------          --------  --------  --------  --------  --------
HANSEN NAT CORP                  (19.77)   (10.14)     8.39      0.50     99.43
S&P SMALLCAP 600 INDEX            12.40     11.80      6.54    (14.63)    38.79
PEER GROUP                         8.47     17.06     47.07     14.40     41.59

                                INDEXED RETURNS

For the years ended December 31,

                         Base
                        Period
Company Name/Index       1998      1999      2000      2001      2002     2003
----------------------  ------  --------  --------  --------  --------  --------
HANSEN NAT CORP           100     80.23     72.09     78.14     78.53    156.65
S&P SMALLCAP 600 INDEX    100    112.40    125.67    133.88    114.30    158.63
PEER GROUP                100    108.47    126.98    186.75    213.64    302.49
               


1    Annual return assumes  reinvestment of dividends.  Cumulative  total return
     assumes an initial  investment of $100 on December 31, 1998.  The Company's
     self-selected  peer group is  comprised of National  Beverage  Corporation,
     Clearly Canadian Beverage Company, Triarc Companies,  Inc., Leading Brands,
     Inc., Cott Corporation, Northland Cranberries and Jones Soda Co. All of the
     companies in the peer group traded during the entire  five-year period with
     the exception of Triarc Companies, Inc., which sold their beverage business
     in October 2000 and Jones Soda Co., which started trading in August 2000.

Employment Agreements

     The Company  entered into an employment  agreement dated as of June 1, 2003
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
$230,000 for the 7-months  ended  December  31,  2003,  $245,000 for 2004,  with
subsequent increases of a minimum of 5% for each subsequent year, 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 June 1, 2003 and
ends on December 31, 2008.

     The Company also entered into an employment  agreement  dated as of June 1,
2003 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 $230,000 for the
7-months ended December 31, 2003,  $245,000 for 2004, with subsequent  increases
of a minimum of 5% for each  subsequent  year, 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 June 1, 2003 and ends on December
31, 2008.

                                       41

<PAGE>

     The employment  agreements for Messrs. Sacks and Schlosberg, and the terms
and  conditions  thereof,  were  discussed  and  approved  by  the  Compensation
Committee of the Board of Directors.

     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

     In 2003,  outside  directors were entitled to an annual fee of $10,000 plus
$1,000 for each meeting of the Board of Directors  attended.  Outside  directors
were also  entitled to $500 for each  committee  meeting  attended in person and
$250 for each committee meeting attended by telephone.

Compensation  Committee  Interlocks and Insider  Participation  in  Compensation
Decisions

     The  Company's  Compensation  Committee is composed of Mr.  Epstein and Mr.
Vindergauz.  No  interlocking  relationships  exist  between  any  member of the
Company's  Board of Directors or  Compensation  Committee  and any member of the
board of directors or compensation  committee of any other company,  nor has any
such  interlocking   relationship   existed  in  the  past.  No  member  of  the
Compensation  Committee  is or was  formerly  an officer or an  employee  of the
Company.

Employee Stock Option Plan

     The Company has a stock  option plan (the  "Plan")  that  provided  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, or for shares of common stock valued at fair market value
on the date of purchase.  Under the Plan, no  additional  options may be granted
after July 1, 2001.

     During 2001, the Company adopted the Hansen Natural  Corporation 2001 Stock
Option Plan ("2001 Option Plan"). The 2001 Option Plan provides for the grant of
options to purchase up to 2,000,000 shares of the common stock of the Company to
certain key employees of the Company and its subsidiaries. Options granted under
the 2001 Stock Option Plan may be incentive  stock  options under Section 422 of
the Internal Revenue Code, as amended (the "Code"),  nonqualified stock options,
or stock appreciation rights.

     The Plan and the 2001  Option  Plan are  administered  by the  Compensation
Committee of the Board of Directors of the Company,  comprised of directors  who
satisfy  the  "non-employee"  director  requirements  of Rule  16b-3  under  the
Securities  Exchange Act of 1934 and the "outside director" provision of Section
162(m) of the Code.  Grants  under  the Plan and the 2001  Option  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 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).

                                       42

<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The disclosure set forth in Item 5 of this report is incorporated herein.

(a)  The following  table sets forth  information,  as of March 11, 2004, in
respect of the only persons known to the Company who  beneficially own more than
5% of the outstanding common stock of the Company:

                                                         Amount
 Title             Name and Address                   and Nature of
Of Class         of Beneficial Owner                    Beneficial       Percent
                                                        Ownership       of Class
------------------------ --------------------------- ----------------- ---------
Common Stock  Brandon Limited Partnership No. 1 (1)      654,822            5.9%
              Brandon Limited Partnership No. 2 (2)    2,831,667           25.5%
              Rodney C. Sacks (3)                      4,071,489(4)        36.7%
              Hilton H. Schlosberg (5)                 4,032,586(6)        36.4%
              Kevin Douglas, Douglas Family Trust      
              and James Douglas and Jean Douglas
              Irrevocable Descendants' Trust (7)       1,053,561(8)         9.5%
              Fidelity Low Priced Stock Fund (9)         888,675            8.0%

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; options to purchase 100,000 shares of common stock exercisable at
     $4.25  per  share,  granted  pursuant  to a Stock  Option  Agreement  dated
     February  2, 1999  between the Company  and Mr.  Sacks;  options  presently
     exercisable  to purchase  30,000 shares of common stock,  out of options to
     purchase a total of 150,000 shares, exercisable at $3.57 per share, granted
     pursuant  to a Stock  Option  Agreement  dated July 12,  2002  between  the
     Company and Mr. Sacks; and options presently exercisable to purchase 30,000
     shares of common  stock,  out of  options  to  purchase  a total of 150,000
     shares,  exercisable at $4.20 per share, granted pursuant to a Stock Option
     Agreement dated May 28, 2003 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
     197,500 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,  a limited
     partnership of which Mr. Sacks is the general  partner and his children and
     he are the limited  partners,  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,  a
     limited  partnership  of which Mr.  Sacks is the  general  partner  and his
     children  and he are the limited  partners,  and a trust for the benefit of
     his children.

                                       43

<PAGE>

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;  options to
     purchase  100,000  shares of common stock  exercisable  at $4.25 per share,
     granted pursuant to a Stock Option Agreement dated February 2, 1999 between
     the Company and Mr. Schlosberg;  options presently  exercisable to purchase
     30,000  shares of common  stock,  out of  options  to  purchase  a total of
     150,000 shares, exercisable at $3.57 per share, granted pursuant to a Stock
     Option   Agreement  dated  July  12,  2002  between  the  Company  and  Mr.
     Schlosberg;  and options presently exercisable to purchase 30,000 shares of
     common  stock,  out of  options  to  purchase  a total of  150,000  shares,
     exercisable  at  $4.20  per  share,  granted  pursuant  to a  Stock  Option
     Agreement dated May 28, 2003 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 197,500 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.

7    The mailing  address of this reporting  person is 1101 Fifth Avenue,  Suite
     360, San Rafael, California 94906.

8    Includes  404,036  shares  of  common  stock  owned by Kevin  and  Michelle
     Douglas;  306,499  shares of common  stock owned by James  Douglas and Jean
     Douglas  Irrevocable  Descendants'  Trust;  322,306  shares of common stock
     owned by Douglas  Family Trust;  and 20,720 shares of common stock owned by
     James E. Douglas III. Kevin Douglas, James E. Douglas, Douglas Family Trust
     and James  Douglas  and Jean  Douglas  Irrevocable  Descendants'  Trust are
     deemed members of a group that shares voting and dispositive power over the
     shares.

9    The  mailing  address of this  reporting  person is 82  Devonshire  Street,
     Boston, Massachusetts, 02109.


(b) The following table sets forth information as to the beneficial ownership of
shares of common stock,  as of March 11, 2004, held by persons who are directors
of the Company and certain executive officers,  naming them, and as to directors
and all executive officers of the Company as a group, without naming them:

Title of Class   Name                   Amount Owned    Percent of Class
-------------------------------------- --------------- ------------------
Common Stock     Rodney C. Sacks         4,071,489(1)        36.7%
                 Hilton H. Schlosberg    4,032,586(2)        36.4%
                 Mark J. Hall               72,000(3)           *%
                 Michael Schott             24,384(4)           *%  
                 Kirk S. Blower             26,809(5)           *% 
                 Harold C. Taber, Jr.       97,119(6)           *%
                 Mark S. Vidergauz          12,000(7)           *% 
                 Benjamin M. Polk              -
                 Norman C. Epstein             -

     Executive  Officers and Directors as a group: 10 members;  4,864,013 shares
or 43.9% in aggregate (8)

*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; options to purchase 100,000 shares of common stock exercisable at
     $4.25  per  share,  granted  pursuant  to a Stock  Option  Agreement  dated
     February  2, 1999  between the Company  and Mr.  Sacks;  options  presently
     exercisable  to purchase  30,000 shares of common stock,  out of options to
     purchase a total of 150,000 shares, exercisable at $3.57 per share, granted
     pursuant  to a Stock  Option  Agreement  dated July 12,  2002  between  the
     Company and Mr. Sacks; and options presently exercisable to purchase 30,000
     shares of common  stock,  out of  options  to  purchase  a total of 150,000
     shares,  exercisable at $4.20 per share, granted pursuant to a Stock Option
     Agreement dated May 28, 2003 between the Company and Mr. Sacks.

                                       44

<PAGE>

     Mr. Sacks disclaims  beneficial ownership of all shares deemed beneficially
     owned by him hereunder except: (i) 387,500 shares of common stock; (ii) the
     197,500 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,  a limited
     partnership of which Mr. Sacks is the general  partner and his children and
     he are the limited  partners,  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,  a
     limited  partnership  of which Mr.  Sacks is the  general  partner  and his
     children  and he are the limited  partners,  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;  options to
     purchase  100,000  shares of common stock  exercisable  at $4.25 per share,
     granted pursuant to a Stock Option Agreement dated February 2, 1999 between
     the Company and Mr. Schlosberg;  options presently  exercisable to purchase
     30,000  shares of common  stock,  out of  options  to  purchase  a total of
     150,000 shares, exercisable at $3.57 per share, granted pursuant to a Stock
     Option   Agreement  dated  July  12,  2002  between  the  Company  and  Mr.
     Schlosberg;  and options presently exercisable to purchase 30,000 shares of
     common  stock,  out of  options  to  purchase  a total of  150,000  shares,
     exercisable  at  $4.20  per  share,  granted  pursuant  to a  Stock  Option
     Agreement dated May 28, 2003 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 197,500 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  68,000  shares  of common  stock  owned by Mr.  Hall and  options
     presently  exercisable  to purchase  4,000 shares of common  stock,  out of
     options to  purchase  a total of 20,000  shares,  exercisable  at $3.57 per
     share,  granted  pursuant to a Stock Option  Agreement  dated July 12, 2002
     between the Company and Mr. Hall.

4    Includes  12,384  shares of common stock owned by Mr. Schott of which 2,500
     shares  are owned  jointly  by Mr.  Schott  and his  children  and  options
     presently  exercisable  to purchase  12,000 shares of common stock,  out of
     options to  purchase  a total of 72,000  shares,  exercisable  at $3.85 per
     share,  granted  pursuant to a Stock Option  Agreement dated August 9, 2002
     between the Company and Mr. Schott.

5    Includes  11,809  shares of common  stock  owned by Mr.  Blower and options
     presently  exercisable  to purchase  12,500  shares of common  stock out of
     options to purchase a total of 12,500 shares of common stock exercisable at
     $4.25  per  share,  granted  pursuant  to a Stock  Option  Agreement  dated
     February 2, 1999  between the Company  and Mr.  Blower;  options  presently
     exercisable  to purchase 2,500 shares of common stock and out of options to
     purchase a total of 12,500 shares,  exercisable at $3.57 per share, granted
     pursuant  to a Stock  Option  Agreement  dated July 12,  2002  between  the
     Company and Mr. Blower.

6    Includes  61,137  shares of common stock owned by Mr.  Taber;  and 35,981.7
     shares of common  stock owned by the Taber  Family Trust of which Mr. Taber
     and his wife are trustees.

7    Includes options presently  exercisable to purchase 12,000 shares of common
     stock  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.

8    Includes  securites  beneficially  owned  by all  directors  and  executive
     officers of the Company including those listed above.

     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.

                                       45

<PAGE>


  ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

     Rodney C. Sacks is  currently  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 2003, 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 2003,  2002 and 2001 were  $331,478,  $164,199 and
$164,638, respectively. The Company continues to purchase promotional items from
IFM Group, Inc. in 2004.

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


ITEM 14.           PRINCIPAL ACCOUNTANT FEES AND SERVICES

Accounting Fees

     Aggregate fees billed and unbilled to the company for service  provided for
the  years  ended  December  31,  2003,  and  2002  by the  Company's  principal
accounting  firm,  Deloitte & Touche LLP,  the member  firms of Deloitte  Touche
Tohmatsu, and their respective affiliates (collectively, "Deloitte & Touche"):

                                           Year ended December 31,
                                             2003            2002
                                         -----------     -----------
     Audit Fees                            $132,500        $105,325
     Audit-Related Fees (1)                   5,000
                                         -----------     -----------
     Total audit and audit-related fees     137,500         105,325
     Tax Fees (2)                                            15,679
     All other Fees
                                         -----------     -----------
       Total Fees (3)                      $137,500        $121,004
                                         ===========     ===========

1    Audit   related  fees   consist  of   consultation   services   related  to
     Sarbanes-Oxley Section 404 Implementation.

2    Tax fees consisted of fees for tax consultation services including advisory
     services for state tax analysis and tax audit assistance.

3    For years ended December 31, 2003 and 2002,  all of the services  performed
     by Deloitte & Touche have been pre-approved by the Audit Committee.

     The Audit Committee has considered whether Deloitte & Touche's provision of
the non-audit  services covered above is compatible with maintaining  Deloitte &
Touche's independence and has determined that it is.

Audit  Committee  Pre-Approval of Audit and  Permissible  Non-Audit  Services of

Independent Auditors

     The Audit  Committee  pre-approves  the  retention  of the auditors and the
auditor's fees for all audit and non-audit services provided by the auditor, and
determines  whether the  provision  of  non-audit  services is  compatible  with
maintaining the independence of the auditor.  All services provided to us by our
auditors were pre-approved by the Audit Committee.

                                       46

<PAGE>


PART IV


ITEM 15. 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                              55

            Consolidated Balance Sheets
            as of December 31, 2003 and 2002                          56

            Consolidated Statements of Income for
            the years ended December 31, 2003, 2002 and 2001          57

            Consolidated Statements of Shareholders' 
            Equity for the years ended December 31, 2003,
            2002 and 2001                                             58

            Consolidated Statements of Cash Flows for
            the years ended December 31, 2003, 2002 and 2001          59

            Notes to Consolidated Financial Statements for
            the years ended December 31, 2003, 2002 and 2001          61
                                                                        

 (b)     Financial Statement Schedule
         Valuation and Qualifying Accounts for
         the years ended December 31, 2003, 2002 and 2001             75

 (c)     Reports on From 8-K
         None  

                                       47

<PAGE>



SIGNATURES

     Pursuant to the  requirements  of  Sections  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

HANSEN NATURAL CORPORATION


/s/ RODNEY C. SACKS   Rodney C. Sacks         Date:   March 30, 2004
-------------------   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, 2004
------------------------    and Chief Executive Officer
Rodney C. Sacks             (principal executive officer)



/s/ HILTON H. SCHLOSBERG   Vice Chairman of the Board of          March 30, 2004
------------------------   Directors, President, Chief
Hilton H. Schlosberg       Operating Officer, Chief Financial
                           Officer and Secretary (principal
                           financial officer, controller and
                           principal accounting officer)
                          
/s/ BENJAMIN M. POLK       Director                               March 30, 2004
--------------------
Benjamin M. Polk



/s/ NORMAN C. EPSTEIN      Director                               March 30, 2004
-----------------------
Norman C. Epstein



/s/ HAROLD C. TABER, JR.   Director                               March 30, 2004
-----------------------
Harold C. Taber, Jr.



/s/ MARK S. VIDERGAUZ      Director                               March 30, 2004
-----------------------
Mark S. Vidergauz

                                       48

<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
----------------- ----------------------------------------------------------------------------------------------------
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
----------------- ----------------------------------------------------------------------------------------------------

                                       49

<PAGE>

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
----------------- ----------------------------------------------------------------------------------------------------
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
----------------- ----------------------------------------------------------------------------------------------------

                                       50

<PAGE>

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, 1999 by and between Hansen Natural Corporation and Rodney C.
                  Sacks.13
----------------- ----------------------------------------------------------------------------------------------------
10 (ggg)          Employment  Agreement as of January 1, 1999 by and between Hansen Natural Corporation and Hilton S.
                  Schlosberg.13
----------------- ----------------------------------------------------------------------------------------------------
10 (hhh)          Stock Option  Agreement dated as of February 2, 1999 by and between Hansen Natural  Corporation and
                  Rodney C. Sacks.  (A version of this  agreement  containing a  typographical  error was  previously
                  filed as an Exhibit to Form 10-k for the year ended December 31, 1998.
----------------- ----------------------------------------------------------------------------------------------------
10 (iii)          Stock Option  Agreement dated as of February 2, 1999 by and between Hansen Natural  Corporation and
                  Hilton  S.  Schlosberg.  (A  version  of  this  agreement  containing  a  typographical  error  was
                  previously filed as an Exhibit to Form 10-k for the year ended December 31, 1998.
----------------- ----------------------------------------------------------------------------------------------------
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 Hanse'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
----------------- ----------------------------------------------------------------------------------------------------
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
----------------- ----------------------------------------------------------------------------------------------------

                                       51

<PAGE>

10.2              Asset Purchase Agreement among Hansen Junior Juice Company,  as Purchaser and Pasco Juices, Inc. as
                  Seller and Hansen Beverage Company dated as of May 25, 2001.21
----------------- ----------------------------------------------------------------------------------------------------
10.3              Letter Agreement by and between Hansen Beverage Company and Hi-Country Corona,  Inc. dated July 28,
                  2000.22
----------------- ----------------------------------------------------------------------------------------------------
10.4              Packing  Agreement  Between Hansen  Beverage  Company and U.S.  Continental  Marketing,  Inc. dated
                  August 14, 200022
----------------- ----------------------------------------------------------------------------------------------------
10.5              Packaging Material Supply Agreement by and between Hansen Beverage Company and International  Paper
                  Company dated November 30, 2000;  First Addendum to the Packaging  Material Supply  Agreement dated
                  September 26, 2001;  Second Addendum to the Packaging  Material Supply Agreement dated February 19,
                  2002. 22
----------------- ----------------------------------------------------------------------------------------------------
10.6              Aseptic  Packaging  Agreement  by and between  Hansen  Beverage  Company  and  Johanna  Foods dated
                  December 7, 2000. 22
----------------- ----------------------------------------------------------------------------------------------------
10.7              Standard  Industrial  Lease Agreement dated as of July 25, 2002 between Hansen Beverage Company and
                  555 South Promenade Partnership L.P. with addendum dated January 21, 2003. 22
----------------- ----------------------------------------------------------------------------------------------------
10.8              Letter Agreement by and between Hansen Beverage Company and McKinley  Equipment  Corporation  dated
                  January 16, 2003. 22
----------------- ----------------------------------------------------------------------------------------------------
10.9              Advertising  Display  Agreement dated as of March 17, 2003 by and between Hansen  Beverage  Company
                  and the Las Vegas Monorail Company. 22
----------------- ----------------------------------------------------------------------------------------------------
10.10             Sponsorship  Agreement  dated  as of March 7,  2003 by and  between  Hansen  Beverage  Company  and
                  C.C.R.L. 22
----------------- ----------------------------------------------------------------------------------------------------
10.11             Public  Relations  Agreement dated as of March 18, 2003 by and between Hansen Beverage  Company and
                  Reach Group Communications, LLC. 22
----------------- ----------------------------------------------------------------------------------------------------
10.12             Stock Option  Agreement dated as of February 1, 1999 by and between Hansen Natural  Corporation and
                  Timothy M. Welch. 22
----------------- ----------------------------------------------------------------------------------------------------
10.13             Stock Option  Agreement dated as of February 2, 1999 by and between Hansen Natural  Corporation and
                  Kirk S. Blower. 22
----------------- ----------------------------------------------------------------------------------------------------
10.14             Stock Option  Agreement  dated as of July 12, 2002 by and between  Hansen Natural  Corporation  and
                  Rodney C. Sacks22
----------------- ----------------------------------------------------------------------------------------------------
10.15             Stock Option  Agreement  dated as of July 12, 2002 by and between  Hansen Natural  Corporation  and
                  Hilton H. Schlosberg22
----------------- ----------------------------------------------------------------------------------------------------
10.16             Stock Option  Agreement  dated as of July 12, 2002 by and between  Hansen Natural  Corporation  and
                  Mark J. Hall 22
----------------- ----------------------------------------------------------------------------------------------------
10.17             Stock Option  Agreement  dated as of July 12, 2002 by and between  Hansen Natural  Corporation  and
                  Kirk S. Blower 22
----------------- ----------------------------------------------------------------------------------------------------
10.18             Employment agreement between the Company and Rodney C. Sacks, dated as of June 1, 2003. 23
----------------- ----------------------------------------------------------------------------------------------------
10.19             Employment agreement between the Company and Hilton H. Schlosberg, dated as of June 1, 2003. 23
----------------- ----------------------------------------------------------------------------------------------------
10.20             2001 Stock Option Plan dated as of July 1, 2001. 24
----------------- ----------------------------------------------------------------------------------------------------
10.21             Stock Option  Agreement  dated as of May 20, 2003 by and between  Hansen  Natural  Corporation  and
                  Rodney C. Sacks
----------------- ----------------------------------------------------------------------------------------------------
10.22             Stock Option  Agreement  dated as of May 20, 2003 by and between  Hansen  Natural  Corporation  and
                  Hilton H. Schlosberg
----------------- ----------------------------------------------------------------------------------------------------
21                Subsidiaries  5
----------------- ----------------------------------------------------------------------------------------------------
23                Independent Auditors' Consent
----------------- ----------------------------------------------------------------------------------------------------
31.1              Certification  by CEO pursuant to Rule  13A-14(a) or  15D-14(a) of the  Securities  Exchange Act of
                  1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
----------------- ----------------------------------------------------------------------------------------------------
31.2              Certification  by CFO pursuant to Rule  13A-14(a) or  15D-14(a) of the  Securities  Exchange Act of
                  1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
----------------- ----------------------------------------------------------------------------------------------------
32.1              Certification by CEO pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002
----------------- ----------------------------------------------------------------------------------------------------
32.2              Certification by CFO pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002
----------------- ----------------------------------------------------------------------------------------------------

                                       52

<PAGE>

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.

     21   Filed  previously  as an  exhibit  to Form  10-K  for the  year  ended
          December 31, 2001.

     22   Filed  previously  as an  exhibit  to Form  10-K  for the  year  ended
          December 31, 2002.

     23   Filed previously as an exhibit to Form 8-K dated September 17, 2003.

     24   Filed previously as an exhibit to Form S-8 dated February 4, 2004.

                                       53

<PAGE>


         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE


                                                                    Page
                                                              ________________
HANSEN NATURAL CORPORATION AND SUBSIDIARIES                       

Independent Auditors' Report                                         55

Consolidated Balance Sheets as of December 31, 2003 and 2002         56

Consolidated Statements of Income for the years ended
December 31, 2003, 2002 and 2001                                     57

Consolidated Statements of Shareholders' Equity for the
years ended December 31, 2003, 2002 and 2001                         58

Consolidated Statements of Cash Flows for the years ended
December 31, 2003, 2002 and 2001                                     59

Notes to  Consolidated  Financial  Statements for the

years ended December 31, 2003,  2002 and 2001                        61

Financial  Statement Schedule - Valuation and Qualifying 
Accounts for the years ended December 31, 2003, 2002 and 2001        75


                                       54

<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, 2003 and 2002,
and the related consolidated statements of income, shareholders' equity and cash
flows for the years ended  December  31,  2003,  2002 and 2001.  Our audits also
included  the  financial   statement   schedule  listed  in  Item  15(b).  These
consolidated  financial statements and this financial statement schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated  financial statements and this 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,  2003  and  2002,  and the  results  of their
operations and their cash flows for the years ended December 31, 2003,  2002 and
2001 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 basic consolidated financial statements taken as a
whole,  presents  fairly,  in all material  respects,  the information set forth
therein.

As discussed in Note 1 to the  consolidated  financial  statements,  the Company
changed its method of accounting for goodwill and other  intangible  assets as a
result of adopting Statement of Financial Accounting Standards No. 142, Goodwill
and Other  Intangible  Assets,  effective  January 1, 2002. As also discussed in
Note 1, effective January 1, 2002, the Company adopted the consensus in Emerging
Issues Task Force ("EITF") Issue No. 01-9,  "Accounting for Consideration  Given
by a Vendor to a  Customer  (Including  a  Reseller  of a  Vendor's  Products),"
resulting in the  presentation of certain sales promotion  expenses and customer
allowances as a reduction of net sales and increase of cost of sales rather than
operating  expenses.  The consolidated  financial  statements for the year ended
December 31, 2001 have been revised to reclassify  such expenses and  allowances
as a reduction  of net sales and increase of cost of sales  consistent  with the
2003 and 2002 presentation, in accordance with EITF 01-9.


/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California
March 26, 2004



                                       55

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------

<TABLE>
<S>                                                                        <C>                    <C>                     
                                                                                  2003                   2002
                                                                           -------------------    -------------------
                                ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                         $ 1,098,785            $   537,920
Accounts receivable (net of allowance for doubtful accounts,        
     sales returns and cash discounts of $875,351 in 2003 and
     $1,098,645 in 2002 and promotional allowances of
     $4,666,770 in 2003 and $3,170,171 in 2002                                      5,372,983              5,949,402
Inventories, net (Note 3)                                                          17,643,786             11,643,734
Prepaid expenses and other current assets                                             481,777              1,627,685
Deferred income tax asset (Note 7)                                                  2,080,609              1,145,133
                                                                           -------------------    -------------------
     Total current assets                                                          26,677,940             20,903,874

PROPERTY AND EQUIPMENT, net (Note 4)                                                2,803,282              1,862,807

INTANGIBLE AND OTHER ASSETS:
Trademark license and trademarks (net of accumulated
     amortization of $146,218 in 2003 and $84,330 in 2002)
     (Note 1)                                                                      18,293,704             17,360,455
Deposits and other assets                                                             222,102                336,369
                                                                           -------------------    -------------------
                                                                                   18,515,806             17,696,824
                                                                           -------------------    -------------------
                                                                                  $47,997,028            $40,463,505
                                                                           ===================    ===================

                 LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                                                  $ 6,521,402            $ 4,732,261
Accrued liabilities                                                                 1,185,342                680,959
Accrued compensation                                                                  883,459                310,064
Current portion of long-term debt (Note 5)                                            244,271                230,740
Income taxes payable                                                                  647,263
                                                                           -------------------    -------------------
     Total current liabilities                                                      9,481,737              5,954,024

LONG-TERM DEBT, less current portion (Note 5)                                         358,064              3,606,040

DEFERRED INCOME TAX LIABILITY (Note 7)                                              3,107,649              2,532,697

COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS' EQUITY (Note 8):
Common stock - $0.005 par value; 30,000,000 shares       
     authorized; 10,624,864 shares issued, 10,418,103
     outstanding in 2003; 10,259,764 shares issued, 10,053,003
     outstanding in 2002                                                               53,124                 51,299
Additional paid-in capital                                                         12,681,169             11,934,564
Retained earnings                                                                  23,129,830             17,199,426
Common stock in treasury, at cost; 206,761 in 2003 and 2002                          (814,545)              (814,545)
                                                                           -------------------    -------------------
     Total shareholders' equity                                                    35,049,578             28,370,744
                                                                           -------------------    -------------------
                                                                                  $47,997,028            $40,463,505
                                                                           ===================    ===================
</TABLE>

                           

          See accompanying notes to consolidated financial statements.

                                       56

<PAGE>

HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
--------------------------------------------------------------------------------

<TABLE>
<S>                                          <C>                   <C>                    <C>
                                                     2003                  2002                  2001
                                             -------------------   --------------------   ------------------

GROSS SALES                                       $ 138,454,345          $ 115,490,019         $ 99,693,390

LESS:  Discounts, allowances and
     promotional payments                            28,102,149             23,443,657           19,035,073
                                             -------------------   --------------------   ------------------

NET SALES                                           110,352,196             92,046,362           80,658,317

COST OF SALES                                        66,577,168             58,802,669           51,796,539
                                             -------------------   --------------------   ------------------

GROSS PROFIT                                         43,775,028             33,243,693           28,861,778

OPERATING EXPENSES:
Selling, general and administrative                  33,887,045             27,896,202           22,803,433
Amortization of trademark license and
     trademarks                                          61,888                 54,558              507,488
                                             -------------------   --------------------   ------------------

     Total operating expenses                        33,948,933             27,950,760           23,310,921
                                             -------------------   --------------------   ------------------

OPERATING INCOME                                      9,826,095              5,292,933            5,550,857

NONOPERATING EXPENSE (INCOME):
Interest and financing expense                           72,592                230,732              527,594
Interest and royalty income                              (5,579)                (2,974)              (8,992)
                                             -------------------   --------------------   ------------------

     Net nonoperating expense                            67,013                227,758              518,602
                                             -------------------   --------------------   ------------------

INCOME BEFORE PROVISION FOR
     INCOME TAXES                                     9,759,082              5,065,175            5,032,255

PROVISION FOR INCOME TAXES
     (Note 7)                                         3,828,678              2,035,980            2,012,902
                                             -------------------   --------------------   ------------------

NET INCOME                                          $ 5,930,404            $ 3,029,195          $ 3,019,353
                                             ===================   ====================   ==================

NET INCOME PER COMMON SHARE:
     Basic                                          $      0.58            $      0.30          $      0.30
                                             ===================   ====================   ==================
     Diluted                                        $      0.55            $      0.29          $      0.29
                                             ===================   ====================   ==================

WEIGHTED AVERAGE SHARES
  OUTSTANDING:
     Basic                                           10,278,710             10,052,499           10,036,547
                                             ===================   ====================   ==================
     Diluted                                         10,762,157             10,339,604           10,314,904
                                             ===================   ====================   ==================
</TABLE>


                             
          See accompanying notes to consolidated financial statements.

                                       57

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
--------------------------------------------------------------------------------

<TABLE>
<S>                     <C>            <C>            <C>              <C>              <C>          <C>           <C>         
                                                                                                                        
                                Common stock             Additional                          Treasury stock             Total
                        ----------------------------      paid-in          Retained     -------------------------   shareholders'
                            Shares        Amount          capital          earnings        Shares       Amount         equity
                        -------------- -------------  ---------------- ---------------- ------------ ------------  -----------------
 Balance,
      January 1, 2001      10,148,882      $ 50,744      $ 11,667,619     $ 11,150,878     (206,761)   $(814,545)      $ 22,054,696

 Issuance of common
  stock                       102,882           515           258,985                                                       259,500

 Net income                                                                  3,019,353                                    3,019,353
                        -------------- -------------  ---------------- ---------------- ------------ ------------  -----------------

 Balance,
      December 31, 2001    10,251,764        51,259        11,926,604       14,170,231     (206,761)    (814,545)        25,333,549

 Issuance of common
  stock                         8,000            40             7,960                                                         8,000

 Net income                                                                  3,029,195                                    3,029,195
                        -------------- -------------  ---------------- ---------------- ------------ ------------  -----------------

 Balance,
      December 31, 2002    10,259,764        51,299        11,934,564       17,199,426     (206,761)    (814,545)        28,370,744

 Issuance of common
  stock                       365,100         1,825           746,605                                                       748,430

 Net income                                                                  5,930,404                                    5,930,404
                        -------------- -------------  ---------------- ---------------- ------------ ------------  -----------------

 Balance,
      December 31, 2003    10,624,864      $ 53,124      $ 12,681,169     $ 23,129,830     (206,761)   $(814,545)      $ 35,049,578
                        ============== =============  ================ ================ ============ ============  =================

</TABLE>

                               
          See accompanying notes to consolidated financial statements.

                                       58

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
--------------------------------------------------------------------------------

<TABLE>
<S>                                                               <C>                 <C>                  <C>
                                                                       2003                 2002                 2001
                                                                  ---------------     ---------------      ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                           $ 5,930,404         $ 3,029,195          $ 3,019,353
Adjustments to reconcile net income to
     net cash provided by operating activities:
     Amortization of trademark license and trademarks                     61,888              54,558              507,488
     Depreciation and other amortization                                 584,197             493,894              436,459
     Loss (gain) on disposal of plant and equipment                       31,992               5,318              (15,072)
     Compensation expense related to the exercise
         of stock options                                                                                         230,879
     Deferred income taxes                                              (360,524)            522,462              472,581
     Effect on cash of changes in operating assets
         and liabilities:
         Accounts receivable                                             576,419          (1,536,980)           2,384,892
         Inventories                                                  (6,000,052)            312,946           (1,048,785)
         Prepaid expenses and other current assets                       500,713             (35,704)            (150,768)
         Accounts payable                                              1,789,141             812,520               24,957
         Accrued liabilities                                             504,383            (190,882)              67,721
         Accrued compensation                                            573,395            (122,832)             151,267
         Income taxes payable/receivable                               1,292,458            (617,826)            (878,266)
                                                                  ---------------     ---------------      ---------------
            Net cash provided by operating activities                  5,484,414           2,726,669            5,202,706

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                   (1,627,490)           (416,873)            (529,905)
Proceeds from sale of property and equipment                              70,826                                   26,416
Additions to trademark license and trademarks                           (995,137)            (64,792)            (118,651)
Decrease (increase) in deposits and other assets                         114,267             389,456              (60,094)
                                                                  ---------------     ---------------      ---------------
            Net cash used in investing activities                     (2,437,534)            (92,209)            (682,234)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt                                  (3,234,445)         (2,352,197)          (4,432,101)
Proceeds from issuance of common stock                                   748,430               8,000               28,621
                                                                  ---------------     ---------------      ---------------
            Net cash used in financing activities                     (2,486,015)         (2,344,197)          (4,403,480)
                                                                  ---------------     ---------------      ---------------

NET INCREASE IN CASH AND
     CASH EQUIVALENTS                                                    560,865             290,263              116,992
CASH AND CASH EQUIVALENTS, beginning
     of year                                                             537,920             247,657              130,665
                                                                  ---------------     ---------------      ---------------
CASH AND CASH EQUIVALENTS, end of year                               $ 1,098,785         $   537,920          $   247,657
                                                                  ===============     ===============      ===============

SUPPLEMENTAL INFORMATION:
  Cash paid during the year for:
     Interest                                                        $    76,306         $   235,779          $   573,029
                                                                  ===============     ===============      ===============
     Income taxes                                                    $ 2,896,743         $ 2,131,344          $ 2,445,957
                                                                  ===============     ===============      ===============

</TABLE>


          See accompanying notes to consolidated financial statements.

                                       59

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
-------------------------------------------------------------------------------
NONCASH TRANSACTIONS:

     During  2001,  the  Company  assumed  long-term  debt of  $654,467,  net of
discount of $95,533,  and accrued liabilities of $196,677 in connection with the
acquisition of the Junior Juice trademark.



          See accompanying notes to consolidated financial statements.

                                       60

<PAGE>


HANSEN NATURAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
--------------------------------------------------------------------------------

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
has 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.
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  subsidiaries,  Blue Sky Natural
Beverage Co. ("Blue Sky") and Hansen Junior Juice Company  ("Junior Juice") owns
and operates the natural soda business  under the Blue Sky(R)  trademark and the
Junior Juice beverage business under the Junior Juice trademarks, respectively.

     Nature of Operations -- Hansen markets and distributes  Hansen's(R) Natural
Sodas,   Signature  Sodas,  fruit  juice  and  soy  Smoothies,   Energy  drinks,
Energade(R)  energy  sports  drinks,  E20 Energy  Water(R),  functional  drinks,
Sparkling  Lemonades  and  Orangeades,  multi-vitamin  juice  drinks in  aseptic
packaging,  Junior Juice(R)  juice,  iced teas,  lemonades and juice  cocktails,
apple juice,  cider and juice  blends,  as well as nutrition  bars,  Blue Sky(R)
brand  carbonated  beverages,  Monster  EnergyTM brand energy drinks and Lost(R)
Energy  brand  energy  drinks.  The  Company's  subsidiary,   HEB,  markets  and
distributes Hard e malt beverages.

     Basis of Presentation - The accompanying  consolidated financial statements
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America ("generally accepted accounting principles").

     Principles  of  Consolidation  - The  accompanying  consolidated  financial
statements  include the  accounts of Hansen and its wholly  owned  subsidiaries,
HBC,  HEB,  Blue  Sky  and  Junior  Juice  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 2003 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.  The Company  maintains  cash  deposits with major banks which from
time to time may exceed  federally  insured  limits.  The  Company  periodically
assesses the financial  condition of the institutions and believes that the risk
of any loss is minimal.

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

                                       61

<PAGE>

     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 ten 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.

     Trademark  License  and  Trademarks  -  Trademark  license  and  trademarks
represents the Company's  exclusive  ownership of the  Hansen's(R)  trademark in
connection with the  manufacture,  sale and  distribution of beverages and water
and non-beverage  products.  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 also owns the Blue Sky(R)  trademark,  which was acquired
in September 2000, and the Junior Juice(R) trademark,  which was acquired in May
2001. The Company  amortizes its trademark  license and trademarks  over 1 to 25
years. Upon the adoption of Statement of Financial  Standards  ("SFAS") No. 142,
the Company ceased the amortization of indefinite life assets.

     Long-Lived Assets - Management regularly reviews property and equipment and
other  long-lived  assets,  including  certain  identifiable  intangibles,   for
possible impairment.  This review occurs annually,  or more frequently if events
or changes in circumstances indicate the carrying amount of the asset may not be
recoverable.  If there is  indication of impairment of property and equipment or
amortizable  intangible assets,  then management  prepares an estimate of future
cash flows  (undiscounted  and without interest charges) expected to result from
the use of the asset and its eventual disposition.  If these cash flows are less
than the carrying amount of the asset, an impairment loss is recognized to write
down the asset to its estimated  fair value.  The fair value is estimated at the
present value of the future cash flows  discounted at a rate  commensurate  with
management's  estimates of the business risks. Annually, or earlier, if there is
indication  of  impairment  of  identified  intangible  assets  not  subject  to
amortization,  management  compares the  estimated  fair value with the carrying
amount  of the  asset.  An  impairment  loss is  recognized  to  write  down the
intangible  asset to its  fair  value if it is less  than the  carrying  amount.
Preparation of estimated expected future cash flows is inherently subjective and
is based on management's best estimate of assumptions concerning expected future
conditions. No impairments were identified as of December 31, 2003.

     Revenue  Recognition - The Company  records revenue at the time the related
products are shipped and the risk of ownership has passed.  Management  believes
an adequate  provision  against net sales has been made for  estimated  returns,
allowances and cash discounts based on the Company's historical experience.

     Freight  Costs and  Reimbursement  of Freight  Costs - In  accordance  with
Emerging  Issues Task Force  ("EITF") 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, 2003,  2002 and 2001,  freight-out  costs amounted to $7.0 million,
$5.8 million and $4.2 million,  respectively, and have been recorded in selling,
general and administrative expenses in the accompanying  consolidated statements
of income.

     Advertising  and  Promotional   Allowances  -  The  Company   accounts  for
advertising  production  costs by expensing such production costs the first time
the related  advertising  takes  place.  Advertising  expenses  amounted to $8.8
million,  $7.3 million and $4.3  million for the years ended  December 31, 2003,
2002 and 2001,  respectively.  Advertising  expenses  were  included in selling,
general and administrative  expenses with the exception of coupon expenses which
were included as a reduction of net sales. In addition, the Company supports its
customers,  including distributors,  with promotional  allowances,  a portion of
which  is  utilized  for  marketing  and  indirect  advertising  by  them.  Such
promotional  allowances  amounted  to $17.2  million,  $13.5  million  and $12.2
million for the years ended December 31, 2003, 2002 and 2001, respectively.

                                       62

<PAGE>

     Change  in  Accounting  for  Promotional  Allowances  - Prior to 2002,  the
Company   included  its   promotional   allowances   in  selling,   general  and
administrative  expenses.  Effective  the first  quarter  of 2002,  the  Company
adopted the consensus of the Financial  Accounting  Standards  Board's  ("FASB")
EITF No. 01-9,  "Accounting for Consideration Given by a Vendor to a Customer or
a Reseller of the Vendor's  Products," which addresses various issues related to
the income statement  classification of certain promotional payments,  including
consideration  from a vendor to a reseller or another  party that  purchases the
vendor's  products.  EITF No.  01-9 was  issued in  November  2001 and  codified
earlier  pronouncements.  The consensus  requires  certain sales  promotions and
customer allowances previously classified as selling, general and administrative
expenses to be  classified as a reduction of net sales or as cost of goods sold.
The Company  adopted EITF No. 01-9 on January 1, 2002.  The effect of the change
in  accounting  related  to the  adoption  of EITF No.  01-9 for the year  ended
December 31, 2003 was to decrease  net sales by  $19,452,566,  increase  cost of
goods sold by $80,530 and decrease selling, general, and administrative expenses
by  $19,533,096  and for the year ended  December  31, 2002 was to decrease  net
sales by  $14,846,875,  increase  cost of goods sold by  $220,394  and  decrease
selling,  general and administrative  expenses by $15,067,269.  The consolidated
financial  statements  for the year ended December 31, 2001 have been revised to
reclassify such expenses and allowances as a reduction of net sales and increase
of cost of sales in accordance  with EITF 01-9.  For the year ended December 31,
2001, $11,621,396 has been reclassified as a reduction to net sales and $341,332
as an  increase  in cost of sales,  both of which were  previously  reported  as
selling, general and administrative expenses.

     Income Taxes - The Company  accounts for income taxes under the  provisions
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.

     Stock-Based  Compensation - The Company accounts for its stock option plans
in  accordance  with  Accounting   Principles  Board  ("APB")  Opinion  No.  25,
"Accounting for Stock Issued to Employees," and related  Interpretations.  Under
APB Opinion No. 25, no compensation  expense is recognized  because the exercise
price of the Company's  employee  stock  options  equals the market price of the
underlying  stock at the date of the grant.  In December  2002,  the FASB issued
SFAS  No.  148,   "Accounting   for  Stock-Based   Compensation-Transition   and
Disclosure."  SFAS No. 148  amends  SFAS No.  123,  Accounting  for  Stock-based
Compensation,  and is effective immediately upon issuance. SFAS No. 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based  employee  compensation as well as amending
the  disclosure  requirements  of SFAS No.  123 to  require  interim  and annual
disclosures about the method of accounting for stock-based  compensation and the
effect  of the  method  used  on  reported  results.  The  Company  follows  the
requirements of APB Opinion No. 25 and the disclosure-only provision of SFAS No.
123, as amended by SFAS No. 148. 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 2001 through 2003  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:

                                       63

<PAGE>
                                      2003              2002           2001
                                      ----              ----           ----
Net income, as reported            $5,930,404        $3,029,195      $3,019,353
Less: total stock-based employee
     compensation expense
     determined under fair value
     based method for all awards,
     net of related tax effects       216,250           212,363         201,825
                                  ------------      ------------    ------------
Net income, pro forma              $5,714,154        $2,816,832      $2,817,528
                                  ============      ============    ============

Net income per common share, 
     as reported:
        Basic                           $0.58             $0.30           $0.30
        Diluted                         $0.55             $0.29           $0.29

Net income per common share, 
     pro forma:
        Basic                           $0.56             $0.28           $0.28
        Diluted                         $0.53             $0.27           $0.27

     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:

                                                   Risk-Free
        Dividend Yield   Expected Volatility    Interest Rate   Expected Lives
        --------------   -------------------    -------------   --------------
  2003      0%                   12%                 3.5%           8 years
  2002      0%                    8%                 4.6%           8 years
  2001      0%                   30%                 4.6%           6 years

     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
(raw materials and/or co-packing  services) from a limited number of sources.  A
disruption  in the  supply 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.

     One customer  accounted for approximately 15%, 18% and 18% of the Company's
sales for the years ended  December 31,  2003,  2002 and 2001,  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.

     During 2003, 2002 and 2001,  sales outside of California  represented  47%,
42% and 39% of the aggregate sales of the Company, respectively.

     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 estimated credit losses,  and historically,  such
losses have been within management's expectations.

                                       64

<PAGE>

     Fair Value of Financial  Instruments  - At December 31, 2003 and 2002,  the
carrying values 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, 2003 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.

     Segment Information - The Company's operating segments have been aggregated
into one reportable segment due to similarities of the economic  characteristics
and nature of  operations  among the  operations  represented  by the  Company's
various product lines.

     Change in Accounting for Goodwill and Other  Intangible  Assets - Effective
January 1, 2002, the Company  adopted the provisions of SFAS No. 142,  "Goodwill
and Other  Intangible  Assets." This statement  discontinued the amortization of
goodwill and indefinite-lived  intangible assets, subject to periodic impairment
testing.  Upon adoption of SFAS No. 142, the Company  evaluated the useful lives
of its various  trademark  licenses and trademarks and concluded that certain of
the  trademark  licenses  and  trademarks  have  indefinite  lives.  Unamortized
trademark  licenses and trademarks  deemed to have indefinite lives ceased to be
amortized  effective  January  1,  2002 and are  subject  to  annual  impairment
analysis. Had the non-amortization  provision of SFAS No. 142 been adopted as of
January  1,  2001,  net  income  and net  income  per share for the years  ended
December 31, 2003, 2002, and 2001 would have been adjusted as follows:

                                        For the years ended December 31,
                                     2003             2002              2001
                                 ------------     ------------      ------------
  Net income, as reported         $5,930,404       $3,029,195        $3,019,353
  Add back:  Amortization of 
    trademark licenses and
    trademarks (net of
    tax effect)                       -                 -               292,241
                                 ------------     ------------      ------------
  Adjusted net income             $5,930,404       $3,029,195        $3,311,594
                                 ============     ============      ============

  Net income per common share -
    basic, as reported            $     0.58       $     0.30        $     0.30

  Amortization of trademark 
    licenses and trademarks
    (net of tax effect)                -                  -                0.03
                                 ------------     ------------      ------------
  Adjusted net income per 
    common share - basic          $     0.58       $     0.30        $     0.33
                                 ============     ============      ============

  Net income per common share -
    diluted, as reported          $     0.55       $     0.29        $     0.29
  Amortization of trademark 
    licenses and trademarks
    (net of tax effect)               -                  -                 0.03
                                 ------------     ------------      ------------
  Adjusted net income per
    common share - diluted        $     0.55       $     0.29        $     0.32
                                 ============     ============      ============

                                       65

<PAGE>

     Upon  adoption  of SFAS No. 142 and as of December  31, 2002 and 2003,  the
trademark  licenses and trademarks were tested for impairment in accordance with
the  provisions  of SFAS  No.  142.  Fair  values  were  estimated  based on the
Company's best estimate of the expected  present value of future cash flows.  No
amounts were impaired at those times. In addition, the remaining useful lives of
trademark licenses and trademarks being amortized were reviewed and deemed to be
appropriate.  The  following  provides  additional  information  concerning  the
Company's trademark licenses and trademarks as of December 31:

                                           2003              2002
                                           ----              ----
     Amortizing trademark licenses
       and trademarks                 $  1,155,803      $  1,138,902
     Accumulated amortization             (146,218)          (84,330)
                                     ---------------   ---------------
                                         1,009,585         1,054,572
     Non-amortizing trademark
     licenses and trademarks            17,284,119        16,305,883
                                     ---------------   ---------------
                                      $ 18,293,704      $ 17,360,455
                                     ===============   ===============

     All  amortizing  trademark  licenses and  trademarks  have been assigned an
estimated  finite useful life, and are amortized on a  straight-line  basis over
the number of years that approximate  their respective useful lives ranging from
1 to 25 years (weighted average life of 19 years).  The straight-line  method of
amortization  allocates  the cost of the  trademark  licenses and  trademarks to
earnings  in  proportion  to the amount of  economic  benefits  obtained  by the
Company in that report period.  Total amortization expense during the year ended
December  31,  2003 was  $61,888.  As of December  31,  2003,  future  estimated
amortization  expense  related to amortizing  trademark  licenses and trademarks
through the year ended December 31, 2008 is:

                  2004                                  $60,416
                  2005                                  $59,281
                  2006                                  $55,971
                  2007                                  $53,587
                  2008                                  $53,438

     Newly Issued Accounting  Pronouncements - In November 2002, the FASB issued
FASB  Interpretation  No.  ("FIN") 45,  "Guarantor's  Accounting  and Disclosure
Requirements for Guarantees,  Including  Indirect  Guarantees of Indebtedness of
Others," an  interpretation  SFAS Nos. 5, 57 and 107, and  rescission of FIN 34,
"Disclosure of Indirect Guarantees of Indebtedness of Others." FIN 45 elaborates
on the  disclosures  to be made  by the  guarantor  in its  interim  and  annual
financial  statements about its obligations under certain guarantees that it has
issued.  It also  requires  that a guarantor  recognize,  at the  inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing the guarantee.  The initial  recognition and  measurement  provisions of
this  interpretation  are applicable on a prospective basis to guarantees issued
or modified  after  December 31, 2002,  while the  provisions of the  disclosure
requirements are effective for financial statements of interim or annual periods
ending after  December  15, 2002.  The Company  adopted such  interpretation  on
November  1,  2002  with  no  material  impact  to  the  consolidated  financial
statements.

     In January  2003,  the FASB  issued FIN 46(R),  "Consolidation  of Variable
Interest  Entities-an  interpretation  of ARB No.  51," and  revised in December
2003. FIN 46(R) requires certain variable  interest  entities to be consolidated
by the primary  beneficiary of the entity if the equity  investors in the entity
do not have the  characteristics  of a controlling  financial interest or do not
have sufficient equity at risk for the entity to finance its activities  without
additional  subordinated  financial  support  from other  parties.  FIN 46(R) is
effective  for all new  variable  interest  entities  created or acquired  after
December 31, 2003. For variable  interest  entities created or acquired prior to
December 31,  2003,  the  provisions  of FIN 46(R) must be applied for the first
interim or annual period  beginning  after March 15, 2004.  The Company does not
expect  that the  adoption  of FIN  46(R)  will  have a  material  impact on its
consolidated  financial  position,  results of operations or cash flows,  as the
Company has no interests in variable interest entities.

                                       66

<PAGE>

     In May  2003,  the  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Instruments with  Characteristics of Both Liabilities and Equity," as amended by
various  FASB  staff  positions  posted in  October  and  November  2003,  which
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 requires that an issuer  classify a financial  instrument that is within
its scope which may have previously been reported as equity,  as a liability (or
an asset in some  circumstances).  This  statement  is effective  for  financial
instruments  entered  into or  modified  after  May 31,  2003 and  otherwise  is
generally effective at the beginning of the first interim period beginning after
June 15,  2003,  except for  mandatorily  redeemable  financial  instruments  of
nonpublic entities, which are subject to the provision of this statement for the
first fiscal  period  beginning  after  December 15, 2004.  The Company does not
believe that the adoption of SFAS No. 150 will have a significant  impact on its
consolidated financial position, results of operations or cash flows.

 2.       ACQUISITIONS

     On May 25, 2001, the Company acquired, through its subsidiary Junior Juice,
the Junior Juice beverage business of Pasco Juices,  Inc.,  including the Junior
Juice(R)  trademarks and assumption of certain  liabilities for a purchase price
of $946,677.  The Junior Juice(R) products are comprised of 100% juices targeted
at toddlers.

     The  acquisition  has been  accounted  for  under  the  purchase  method of
accounting  in  accordance  with APB  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 for
the  acquisition  of Junior Juice was financed by the issuance of a note payable
to Pasco  Juice,  Inc.,  payable over five years and the  assumption  of certain
liabilities (Note 5).

     Trademarks acquired are evaluated and amortized in accordance with SFAS No.
142. The  operating  results of Junior Juice 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:

                                         2003             2002
                                         ----             ----
     Raw materials                  $  6,979,701      $  4,267,055
     Finished goods                   11,900,304         8,023,118
                                   --------------    --------------
                                      18,880,005        12,290,173
     Less inventory reserves          (1,236,219)         (646,439)
                                   --------------    --------------
                                    $ 17,643,786      $ 11,643,734
                                   ==============    ==============

4.   PROPERTY AND EQUIPMENT

     Property and equipment consist of the following at December 31:

                                              2003            2002
                                              ----            ----
     Leasehold improvements            $   230,027       $   194,965
     Furniture and office equipment        881,741           776,401
     Equipment                           2,481,917         1,703,855
     Vehicles                            1,636,878         1,104,633
                                      -------------     -------------
                                         5,230,563         3,779,854
     Less accumulated depreciation
       and amortization                 (2,427,281)       (1,917,047)
                                      -------------     -------------
                                       $ 2,803,282       $ 1,862,807    
                                      =============     =============

                                       67

<PAGE>

5.   LONG-TERM DEBT

     HBC has a  credit  facility  from  Comerica  Bank-California  ("Comerica"),
consisting of a revolving line of credit and a term loan. Such revolving line of
credit  and term  loan  were  secured  by  substantially  all of  HBC's  assets,
including accounts  receivable,  inventory,  trademarks,  trademark licenses and
certain equipment. In accordance with the provisions of the credit facility, HBC
can borrow up to $12.0 million under its revolving  line of credit,  reducing to
$6.0 million by September  2004.  The revolving  line of credit  remains in full
force and effect through  September 2005.  Interest on borrowings under the line
of  credit  is  based  on the  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. The Company had
no outstanding borrowings on the line of credit at December 31, 2003.

     The  terms  of the  Company's  line of  credit  contain  certain  financial
covenants including certain financial ratios and annual net income requirements.
The line of credit contains  provisions  under which  applicable  interest rates
will be adjusted in increments  based on the  achievement  of certain  financial
ratios.  The Company was in compliance with its financial  ratios and annual net
income  requirements  and  obtained a waiver from  Comerica  with regards to its
capital expenditure limitations at December 31, 2003.

     During 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, 2003 and 2002, the assets  acquired under
capital leases had a net book value of $121,178 and $285,085, net of accumulated
depreciation of $418,465 and $301,422, respectively.

    Long-term debt consists of the following
    at December 31:                                  2003              2002
                                                     ----              ----
    Line of credit from Comerica,  
    collateralized  by substantially all
    of HBC's assets,  at an effective 
    interest rate of LIBOR plus 2.5% 
    (3.6% as of December 31, 2003), due
    in September 2005                             $    -            $ 2,969,000
 
    Note  payable  to Pasco  Juices,  Inc.,
    collateralized  by the Junior Juice 
    trademark,  payable in quarterly 
    installments of varying amounts through
    May 2006,  net of  unamortized  discount
    (based  on  imputed interest  rate of
    4.5%) of $29,547 and  $77,976 at  
    December  31, 2003 and 2002, respectively        392,263            543,131

    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                    210,072            324,649
                                                 ------------      -------------
                                                     602,335          3,836,780
    Less: current portion of 
    long-term debt                                  (244,271)          (230,740)
                                                 ------------      -------------
                                                  $  358,064        $ 3,606,040
                                                 ============      =============

    Long-term debt is payable as follows:

            Year ending December 31:
       2004                                $ 244,271
       2005                                  211,484
       2006                                  146,580
                                          -----------
                                           $ 602,335
                                          ===========

     Interest expense  amounted to $66,592,  $224,748 and $520,160 for the years
ended December 31, 2003, 2002 and 2001, respectively.

                                       68

<PAGE>

6.       COMMITMENTS AND CONTINGENCIES

     Operating Leases - The Company leases its warehouse  facility and corporate
offices under a 10 year lease  beginning  October  2000,  when the Company first
occupied  the  facility.  The  facility  lease and certain  equipment  and other
noncancelable  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 $660,616,  $643,827,  and $644,454 for the
years ended December 31, 2003, 2002 and 2001, respectively. In January 2004, the
Company entered into a lease for additional  warehouse space. This lease expires
in March 2008 with an option to renew through 2010.

     Future  minimum  rental  payments  at  December  31,  2003 under the leases
referred to above are as follows:

        Year ending December 31:
        2004                                              $       893,359
        2005                                                      970,359
        2006                                                    1,017,128
        2007                                                    1,030,218
        2008                                                      773,997
        Thereafter                                              1,199,730
                                                         ------------------
                                                          $     5,884,791
                                                         ==================

     Purchase  Commitments  - The Company has purchase  commitments  aggregating
approximately  $22,711,000,  which represent commitments made by the Company and
its subsidiaries to various suppliers of raw materials for the manufacturing and
packaging of its products. These obligations vary in terms.

     Advertising  Commitment - In March 2003,  HBC entered  into an  advertising
display  agreement  ("Monorail  Agreement")  with the Las Vegas Monorail Company
("LVMC") in terms of which HBC was granted the right,  in  consideration  of the
payment by HBC to LVMC of the sum of $1,000,000 per year, payable quarterly,  to
advertise and promote its products on a designated four car monorail  vehicle as
well as the right to sell certain of its  products on all monorail  stations for
payment of additional consideration.

     It is  anticipated  that the initial  term will  commence in May 2004.  The
initial  term of the Monorail  Agreement  ends on the first  anniversary  of its
commencement  date.  Not less than 120 days before the expiration of the initial
term and each renewal  term,  as the case may be, HBC has the right to renew the
Monorail  Agreement  for a  further  one  year  term  up to a  maximum  of  nine
additional  one year  terms  and the LVMC has the  right,  notwithstanding  such
election by HBC, to terminate  the Monorail  Agreement at the  expiration of the
then current term.

     Employment and Consulting Agreements - On June 1, 2003, the Company entered
into an  employment  agreement  with  Rodney C. Sacks and  Hilton H.  Schlosberg
pursuant to which Mr. Sacks and Mr. Schlosberg render services to the Company as
its Chairman and Chief Executive Officer,  and its Vice Chairman,  President and
Chief Financial Officer, respectively. The agreements provide for an annual base
salary of $230,000 each for the 7 months ended December 31, 2003,  increasing to
$245,000 for the year ending December 31, 2004 and increasing by a minimum of 5%
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 as well as certain fringe benefits for the period commencing June
1, 2003 and ending December 31, 2008.

     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.

                                       69

<PAGE>

     During 2002,  in response to a cease and desist  letter to Skyy Spirits LLC
in which the Company alleged infringement by Skyy Spirits and/or its licensee of
the  Company's  Blue Sky(R)  trademark,  Skyy  Spirits  filed a complaint in the
United  States  District  Court for the Northern  District of  California  for a
declaratory  order and  additional  relief.  The  Company  filed a  counterclaim
against Skyy Spirits and joined Miller  Brewing  Company in the  proceedings  in
which the Company has sought an  injunction  and claimed  damages,  including an
accounting for profits  earned by both Skyy Spirits and Miller Brewing  Company,
from the sale of the infringing  beverage products and further relief. The trial
in this matter has been scheduled for hearing in April 2004.

     During 2003,  in response to a cease and desist  letter from the  Coca-Cola
Company and its subsidiary Odwalla,  Inc. in which they complained of the use by
us of the  Monster  trademark  and name,  the Company  filed a complaint  in the
United  States  District  Court for the Southern  District of  California  for a
declaratory  order and additional  relief.  The Company is engaged in settlement
discussions  with the  Coca-Cola  Company and Odwalla,  Inc. If no settlement is
reached,  the Company will vigorously  pursue the matter.  The Company  believes
that it has good prospects of success.

     Guarantees  - The Company  from time to time enters into  certain  types of
contracts that  contingently  require the Company to indemnify  parties  against
third party claims.  These contracts primarily relate to: (i) certain agreements
with the Company's officers, directors and employees under which the Company may
be required to  indemnify  such  persons  for  liabilities  arising out of their
employment relationship,  (ii) certain distribution or purchase agreements under
which the Company may have to indemnify the Company's  customers from any claim,
liability  or loss  arising  out of any  actual or  alleged  injury  or  damages
suffered  in  connection  with the  consumption  or  purchase  of the  Company's
products,  and (iii) certain real estate leases,  under which the Company may be
required to indemnify  property  owners for liabilities and other claims arising
from the Company's use of the applicable premises.

     The terms of such obligations vary. Generally,  a maximum obligation is not
explicitly  stated.  Because the obligated  amounts of these types of agreements
often are not explicitly  stated,  the overall maximum amount of the obligations
cannot be reasonably estimated. Further, the Company believes that its insurance
coverage  is  adequate to cover any  liabilities  or claims  arising out of such
instances referred to above. Historically, the Company has not been obligated to
make significant payments for these obligations and accordingly, the Company has
valued these obligations at $0 on its consolidated balance sheets as of December
31, 2003 and 2002.

7.       INCOME TAXES

     Components of the income tax provision are as follows:

                                             Year Ended December 31,
                                      2003            2002            2001
                                      ----            ----            ----
     Current income taxes:
       Federal                     $ 3,386,946     $ 1,173,693     $ 1,248,119
       State                           802,256         339,825         292,202
                                  ------------    -------------   -------------
                                     4,189,202       1,513,518       1,540,321

     Deferred income taxes:
       Federal                       (290,357)         448,239         373,217
       State                          (70,167)          74,223          99,364
                                 -------------    -------------   -------------
                                     (360,524)         522,462         472,581
                                 -------------    -------------   -------------
                                  $ 3,828,678      $ 2,035,980     $ 2,012,902
                                 =============    =============   =============

     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:

                                       70

<PAGE>
                                         Year Ended December 31,
                                    2003             2002              2001
                                    ----             ----              ----
Income tax provision
using the statutory rate        $ 3,318,088      $ 1,722,160      $ 1,710,967
                               
State taxes, net of federal
tax benefit                         521,475          267,440          293,602
Permanent differences                39,895           46,380           31,423
Other                               (50,780)                          (23,090)
                               -------------    -------------    -------------
                                $ 3,828,678      $ 2,035,980      $ 2,012,902
                               =============    =============    =============

     Major  components of the  Company's  deferred tax assets  (liabilities)  at
December 31 are as follows: 
                                                      2003               2002
                                                      ----               ----
Reserves for returns                            $    93,556         $    70,487
Reserves for bad debts                               93,623              86,484
Reserves for obsolescence                           519,212             271,504
Reserves for marketing development fund             754,517             326,760
Capitalization of inventory costs                   169,317             145,553
State franchise tax                                 348,351             214,209
Accrued compensation                                 47,433              30,956
Amortization of graphic design                      297,760             315,726
Other accrued expenses                               54,602
                                               -------------       -------------
          Total deferred tax asset                2,378,371           1,461,679

Amortization of trademark license                (3,160,401)         (2,617,097)
Depreciation                                       (245,010)           (232,146)
                                               -------------       -------------
Total deferred tax liability                     (3,405,411)         (2,849,243)
                                               -------------       -------------
Net deferred tax liability                      $(1,027,040)        $(1,387,564)
                                               =============       =============

8.       STOCK OPTIONS

     The Company has three stock option plans,  the Hansen  Natural  Corporation
2001 Stock Option Plan ("2001  Option  Plan"),  the  Employee  Stock Option Plan
(the "Plan") and the Outside Directors Stock Option Plan ("Directors Plan").

     During 2001,  the Company  adopted the 2001 Option Plan which  provides for
the grant of options to purchase up to  2,000,000  shares of the common stock of
the  Company to certain  key  employees  of the  Company  and its  subsidiaries.
Options  granted under the 2001 Option Plan may be incentive stock options under
Section 422 of the Internal Revenue Code, as amended (the "Code"),  nonqualified
stock options,  or stock appreciation  rights.  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.  As of December 31, 2003,  options to purchase  915,500  shares of Hansen
common stock had been granted under the 2001 Option Plan and options to purchase
1,084,500  shares of Hansen  common stock remain  available  for grant under the
2001 Option Plan.

     The Plan, as amended,  provided for the granting of options to purchase not
more than  3,000,000  shares  of Hansen  common  stock to key  employees  of the
Company and its subsidiaries through July 1, 2001. 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, 2003,  options to purchase  2,095,700 shares of Hansen common stock had been
granted under the Plan, net of options that have expired.

                                       71

<PAGE>

     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 (the  "Board")  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 nonemployee 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). As of December
31,  2003,  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.

     During the years  ended  December  31,  2003,  2002 and 2001,  the  Company
granted 355,000,  529,500 and 122,500 options to purchase shares under the Plan,
the 2001 Option Plan, and Directors Plan at a  weighted-average  grant date fair
value of $1.27, $1.12 and $1.36, respectively.  Additional information regarding
the plans is as follows:

                        2003                  2002                 2001
                -------------------- --------------------- ---------------------
                           Weighted-             Weighted-             Weighted-
                            average               average               average
                           exercise              exercise              exercise
                   Shares    price       Shares    price       Shares    price
                -------------------- --------------------- ---------------------
Options
 outstanding,     
 beginning
 of year         1,501,900   $3.29     1,053,400   $3.04     1,134,400   $2.84
Options granted    355,000   $4.43       529,500   $3.64       122,500   $3.49
Options
 exercised        (365,100)  $2.05        (8,000)  $1.00      (152,500)  $1.59
Options
 canceled
 or expired        (22,000)  $3.53       (73,000)  $2.54       (51,000)  $4.06
                -------------------- --------------------- ---------------------
Options                
 outstanding,
 end of year     1,469,800   $3.87     1,501,900   $3.29     1,053,400   $3.04
                ==================== ===================== =====================
Option                       $1.13                 $1.00                 $0.75
 price range                   to                    to                    to
 end of year                 $8.23                 $5.25                 $5.25


                                       72

<PAGE>

     The following table summarizes  information about fixed-price stock options
outstanding at December 31, 2003:

           -------------------------------------------- ------------------------
                              Options Outstanding           Options Exercisable
           -------------------------------------------- ------------------------
                                 Weighted-
                     Number       average                  Number
                  outstanding    remaining    Weighted-  exercisable   Weighted-
                      at        contractual    average       at         average
 Range of         December 31,     life       exercise   December 31,  exercise
 exercise            2003       (in years)     price        2003          price
 prices          -------------------------------------- ------------------------
 $1.13 to $1.59      81,000         4          $1.56        81,000       $1.56
 $3.02 to $3.95     669,600         7          $3.59       168,900       $3.57
 $4.05 to $4.25     591,400         6          $4.22       243,600       $4.25
 $4.31 to $5.25     107,800         3          $4.59        54,600       $4.62
 $8.23               20,000        10          $8.23          -            -
                 -----------                            -----------
                  1,469,800                                548,100
                 ===========                            ===========

9.       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 $70,518, $64,949 and $58,211 for the years
ended December 31, 2003, 2002 and 2001, respectively.

10.      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, 2003,  2002 and 2001
were $59,146, $79,843 and $193,350, respectively.

     Two directors and officers 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, 2003,  2002 and 2001 were  $331,478,  $164,199 and $164,638,
respectively.

11.      SUBSEQUENT EVENT

     Subsequent to year-end, the Company granted options to certain employees to
purchase  284,500  shares of Hansen  common  stock under the 2001 Option Plan at
exercise prices ranging from $8.11 to $10.32 per share.

                                       73

<PAGE>

12.      QUARTERLY FINANCIAL DATA (Unaudited)


<TABLE>
<S>                   <C>              <C>              <C>             <C>         <C>
                                                                            Net Income per
                                                                             Common Share
                                                                        ---------------------
                        Net Sales       Gross Profit      Net Income      Basic      Diluted
                      --------------   --------------   -------------   ---------   ---------
Quarter ended:
 March 31, 2003        $ 22,086,348     $  8,299,821     $   633,071     $  0.06     $  0.06
 June 30, 2003           28,409,138       11,448,565       1,977,184        0.19        0.19
 September 30, 2003      33,291,088       13,286,852       2,093,835        0.21        0.19
 December 31, 2003       26,565,622       10,739,790       1,226,314        0.12        0.11
                      --------------   --------------   -------------   ---------   ---------
                       $110,352,196     $ 43,775,028     $ 5,930,404     $  0.58     $  0.55
                      ==============   ==============   =============   =========   =========

Quarter ended:
 March 31, 2002        $ 18,592,394     $  6,810,081     $   410,645     $  0.04     $  0.04
 June 30, 2002           26,264,788        9,833,837       1,271,083        0.13        0.12
 September 30, 2002      26,985,256        9,677,851       1,270,225        0.12        0.12
 December 31, 2002       20,203,924        6,921,924          77,242        0.01        0.01
                      --------------   --------------  --------------  ----------  ----------
                       $ 92,046,362     $ 33,243,693     $ 3,029,195     $  0.30     $  0.29
                      ==============   ==============  ==============  ==========  ==========
</TABLE>


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


                                       74

<PAGE>
HANSEN NATURAL CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

                Balance at     Charged to
               beginning of    cost and                      Balance at end
Description      period        expenses       Deductions       of period
--------------------------------------------------------------------------------

Allowance for doubtful accounts, sales returns and cash discounts:

2003          $ 1,098,645      2,936,429      (3,159,723)     $   875,351
2002          $   625,270      3,108,031      (2,634,656)     $ 1,098,645
2001          $   486,462      3,187,101      (3,048,293)     $   625,270

Promotional allowances:

2003          $ 3,170,171     15,139,959     (13,643,360)     $ 4,666,770
2002          $ 2,981,556     12,660,386     (12,471,771)     $ 3,170,171
2001          $ 2,370,260     12,167,783     (11,556,487)     $ 2,981,556

Inventory reserves:

2003          $   646,439        589,780            -         $ 1,236,219
2002          $   400,767        269,530         (23,858)     $   646,439
2001          $   168,409        262,187         (29,829)     $   400,767


                                       75

<PAGE>
E
XHIBIT 23



INDEPENDENT AUDITORS' CONSENT


We consent to the  incorporation  by reference in  Registration  Statements  No.
33-92526,  No. 333-41333,  No.  333-89123,  and No. 333-112482 of Hansen Natural
Corporation  on Form S-8 of our  report  dated  March  26,  2004  (which  report
expresses an unqualified opinion and includes an explanatory paragraph referring
to changes in accounting), appearing in the Annual Report on Form 10-K of Hansen
Natural Corporation for the year ended December 31, 2003.



/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California
March 26, 2004


                                       76









                             STOCK OPTION AGREEMENT


     This Stock Option  Agreement  ("Agreement")  is made as of May 28, 2003, by
and between Hansen Natural Corporation,  a Delaware corporation (the "Company"),
and Rodney C. Sacks ("Holder").
                              Preliminary Recitals
     A.  Holder is an  employee  of the  Company or one of its  subsidiaries  or
affiliates.

     B. Pursuant to the Hansen Natural  Corporation  2001 Stock Option Plan (the
"Plan"),  the  Company  desires to grant  Holder an  incentive  stock  option to
purchase  shares of the Company's  common stock,  par value $.005 per share (the
"Common  Stock"),  subject to the terms and  conditions  of the Plan and subject
further to the terms and conditions set forth below.

     NOW, THEREFORE, the Company and Holder agree as follows:

     1. Grant of Incentive  Stock Option.  The Company  hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase up to 150,000 shares of Common Stock,  at the purchase price
of $4.20 per share,  such ISO to be  exercisable  and  exercised as  hereinafter
provided.

     2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's  employment with the Company and its subsidiaries and affiliates
(the "Hansen  Group")  unless the  employment  is  terminated by a member
 of the
Hansen Group for Cause (as defined below) or unless the employment is terminated
by reason of the death or Total Disability (as defined below) of Holder.  If the
Holder's employment is terminated by a member of the Hansen Group for Cause, the
ISO  shall  expire  as of  the  date  employment  terminates.  If  the  Holder's
employment terminates due to his death or Total Disability,  then the ISO may be
exercised by Holder or the person or persons to which Holder's rights under this
Agreement pass by will, or if no such person has such right, by his executors or
administrators,  within six months after the date of death or Total  Disability,
but no later than the expiration  date specified in Section 3(d) below.  "Cause"
means the  Holder's  act of fraud or  dishonesty,  knowing  material  failure to
comply with applicable laws or regulations, drug or alcohol abuse, as determined
by the  Committee  of the Hansen  Natural  Corporation  Stock  Option  Plan (the
"Committee").  "Total Disability" means the complete and permanent  inability of
Holder  to  perform  all of his  duties  of  employment  with  the  Company,  as
determined  by  the  Committee  upon  the  basis  of  such  evidence,  including
independent  medical  reports and data, as the Committee  deems  appropriate  or
necessary.

<PAGE>
        
3.      Exercise of Option

          (a)  Subject  to the  other  terms  of this  Agreement  regarding  the
     exercisability  of the ISO, the ISO may only be exercised in respect of the
     number of shares  listed  in  column A from and  after the  exercise  dates
     listed in column B,
                 
           Column "A"                        Column "B"
        Number of Shares                    Exercise Date
        ----------------                   ---------------
             30,000                        January 1, 2004
             30,000                        January 1, 2005
             30,000                        January 1, 2006
             30,000                        January 1, 2007
             30,000                        January 1, 2008

          (b) This ISO may be exercised, to the extent exercisable by its terms,
     from time to time in whole or in part at any time  prior to the  expiration
     thereof.  Any  exercise  shall be  accompanied  by a written  notice to the
     Company  specifying  the  number of  shares  as to which  this ISO is being
     exercised  (the  "Option  Shares").  Notations  of any partial  exercise or
     installment exercise, shall be made by the Company on Schedule A hereto.

<PAGE>

          (c)  Notwithstanding the above, this ISO shall be fully exercisable in
     the event Holder's employment with the Hansen Group is terminated by Holder
     for "Good  Reason"  (as  defined  below),  or a member of the Hansen  Group
     terminates his employment without "Cause" (as defined above). "Good Reason"
     means the Holder's  termination  of employment  with the Hansen Group on or
     after a  reduction  in his  compensation  or  benefits,  his removal as the
     Company's  Chairman of the Board or Chief Executive  Officer,  or his being
     assigned duties or responsibilities that are inconsistent with the dignity,
     importance or scope of his position with the Company.

          (d)  Notwithstanding  anything else herein to the  contrary,  this ISO
     shall expire ten years from the date of this agreement.

          (e) The Holder  hereby  agrees to notify the Company in writing in the
     event shares acquired pursuant to the exercise of this ISO are transferred,
     other than by will or by the laws of descent and  distribution,  within two
     years after the date indicated  above or within one year after the issuance
     of such shares pursuant to such exercise.

   4. Payment of Purchase Price Upon Exercise.  At the time of any exercise of
the ISO the  purchase  price of the ISO shall be paid in full to the  Company in
either of the following ways or in any combination of the following ways:

          (a) By check or other immediately available funds.

          (b) With property consisting of shares of Common Stock. (The shares of
     Common  Stock  to be used as  payment  shall  be  valued  as of the date of
     exercise of the ISO at the Closing Price as defined below. For example,  if
     Holder  exercises the option for 4,000 shares at a total  Exercise Price of
     $7,000,  assuming  exercise price of $1.75 per share, and the Closing Price
     is $5.00,  he may pay for the 4,000  Option  Shares by  transferring  1,400
     shares of Common Stock to the Company.)


<PAGE>

          (c) For purposes of this  Agreement,  the term "Closing  Price" means,
     with respect to the Company's Common Stock, the last sale price regular-way
     or, in case no such sale  takes  place on such  date,  the  average  of the
     closing  bid  and  asked  prices  regular-way  on  the  principal  national
     securities  exchange  on which the  securities  are listed or  admitted  to
     trading;  or, if they are not listed or admitted to trading on any national
     securities  exchange,  the  last  sale  price  of  the  securities  on  the
     consolidated  transaction  reporting system of the National  Association of
     Securities  Dealers  (NASD"),  if such last sale information is reported on
     such  system or, if not so  reported,  the  average of the  closing bid and
     asked prices of the  securities on the National  Association  of Securities
     Dealers Automatic  Quotation System ("NASDAQ") or any comparable system or,
     if the  securities  are not listed on NASDAQ or a  comparable  system,  the
     average of the closing bid and asked  prices as furnished by two members of
     NASD selected from time to time by the Company for that purpose.

     5.  Purchase for  Investment;  Resale  Restrictions.  Unless at the time of
exercise of the ISO there shall be a valid and effective  registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate  qualification  and
registration  under  applicable  state  securities  laws  relating to the Option
Shares  being   acquired,   Holder  shall  upon  exercise  of  the  ISO  give  a
representation  that  he is  acquiring  such  shares  for his  own  account  for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration  statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company,  of such investment intent.  Holder further agrees that he will not
sell or transfer any Option  Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such  proposed sale or transfer will not result in a violation o
the '33 Act, or a  registration  statement  covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action  letter from the Securities and Exchange  Commission with
respect to the proposed transfer.


<PAGE>

     6.  Nontransferability.  This ISO shall not be  transferable  other than by
will or by the laws of descent and distribution.  During the lifetime of Holder,
this ISO shall be exercisable only by Holder.

     7. Adjustments.

          (a) If the Company hereafter (i) declares a distribution on its shares
     in  shares,  (ii)  splits  its  outstanding  shares,   (iii)  combines  its
     outstanding  shares into a smaller  number of securities or (iv) issues any
     shares or other securities by reclassification of its shares (including any
     such reclassification in connection with a consolidation or merger in which
     the Company is the continuing entity),  the purchase price in effect at the
     time of the record date for such distribution or the effective date of such
     subdivision,  combination or reclassification  shall be adjusted so that it
     shall equal the price  determined by  multiplying  the purchase  price by a
     fraction,   the  denominator  of  which  shall  be  the  number  of  shares
     outstanding  immediately  after  giving  effect  to  such  action,  and the
     numerator  of which shall be the number of shares  outstanding  immediately
     prior to such action.  Whenever the purchase price payable upon exercise of
     the ISO is adjusted  pursuant to the preceding  sentence  above,  number of
     shares  purchasable  upon  exercise  of the  ISO  shall  simultaneously  be
     adjusted by multiplying  the number of shares issuable upon exercise of the
     ISO  immediately  prior to the event  which  causes the  adjustment  by the
     purchase  price in effect  immediately  prior to the event which causes the
     adjustment and dividing the product so obtained by the purchase  price,  as
     adjusted.  Such adjustments shall be made  successively  whenever any event
     listed above shall occur.

<PAGE>

          (b) If, at any time,  as a result of an  adjustment  made  pursuant to
     paragraph  7(a)  above,  the Holder  shall  become  entitled to receive any
     securities  of the  Company  other  than  shares,  the number of such other
     securities  so  receivable  upon  exercise of the ISO shall  thereafter  be
     subject to adjustment  from time to time in a manner and on terms as nearly
     equivalent  as  practicable  to the  provisions  with respect to the shares
     contained in paragraph 7(a) above.

          (c) If any  other  event  contemplated  in  Section  10(a) of the Plan
     occurs,  adjustments  to the number and kind of shares  subject to this ISO
     and/or to the purchase price for each share subject to this ISO may be made
     in accordance with Section 10(a) of the Plan.

          (d) No adjustments  shall be made under this Section 7 that would have
     the effect of modifying this ISO under Internal Revenue Code 422 or 424.

          (e) Whenever  the purchase  price or the number of shares is adjusted,
     as herein  provided,  Hansen  shall  within 10  business  days of the event
     causing such adjustment  give a notice setting forth the adjusted  purchase
     price and adjusted number of shares issuable upon exercise of the ISO to be
     mailed to the Holder.

          (f)  Notwithstanding  anything else herein to the  contrary,  upon the
     occurrence of a change in control (as defined in (g) below),  the option or
     any portion thereof not theretofore  exercisable,  shall immediately become
     exercisable  in its entirety  and the option  (being the option to purchase
     shares of Common Stock subject to the applicable provisions of the Plan and
     awarded in accordance  with the Plan in terms of section 1 above) may, with
     the  consent of Holder,  be  purchased  by the  Company for cash at a price
     equal to the fair market value (as defined in 7(g) below) less the purchase
     price  payable  by Holder to  exercise  the  option as set out in Article 1
     above for one (1) share of Common  Stock of the Company  multiplied  by the
     number of shares of Common Stock which Holder has the option to purchase in
     terms of Article 1 above.


<PAGE>

     (g) For the purposes of this agreement

          (i) "Change in Control" means;

                         (A) the  acquisition of  "Beneficial  Ownership" by any
                    person (as  defined in rule 13 (d) - 3 under the  Securities
                    Exchange Act 1934),  corporation  or other entity other than
                    the Company or a wholly owned  subsidiary  of the Company of
                    20% or more of the outstanding Stock,

                         (B) the sale or disposition of substantially all of the
                    assets of the Company, or

                         (C) the merger of the Company with another  corporation
                    in which  the  Common  Stock  of the  Company  is no  longer
                    outstanding after such merger.

          (ii) "Fair Market Value" means,  as of any date, the Closing Price for
     one share of the Common Stock of the Company on such date.

     8. The  provisions  of  Section  5(b)  (iii)  of the  Plan,  regarding  the
execution of a shareholder's agreement as a condition precedent to the Company's
obligation  to issue  shares  under the Plan,  shall not apply to the ISO or any
shares issued pursuant to the ISO.

     9. The  Company  represents  and  warrants  to Holder that (a) there are no
options  to  purchase  the  Company's  Common  Stock,  containing  the  same  or
substantially  the same  terms as the  ISO,  which  are  actively  traded  on an
established  market  within the  meaning  of  Internal  Revenue  Code 83 and the
regulations promulgated  thereunder;  and (b) the shares of the Company's Common
Stock issued upon exercise of the ISO, when issued in accordance  with the terms
hereof, will be duly authorized,  validly issued,  fully paid and nonassessable.
The Company  shall  reserve and keep  reserved out of its  authorized  shares of
Common Stock the number of shares of Common Stock that may be issuable from time
to time upon exercise of the ISO.

<PAGE>

     10. No Rights as Stockholder.  Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.

     11. No Right to Continue  Employment.  This Agreement shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen  Group nor shall it  interfere  in any way with the right of any such
member to terminate his employment at any time.

     12.  Compliance With Law and Regulation.  This Agreement and the obligation
of the Company to sell and deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.  The Company  agrees to use its reasonable
efforts to obtain any necessary listing, registration,  qualification,  consent,
approval or agreement  as  expeditiously  as possible,  and the term of this ISO
shall be extended until 30 days  following the date such listing,  registration,
qualification, consent, approval or agreement is effected or obtained. Moreover,
this ISO may not be exercised if its exercise or the receipt of shares of Common
Stock pursuant thereto would be contrary to applicable law.

<PAGE>

     13.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.

     14.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.

     15. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 1010 Railroad  Street,  Corona,  California  92882,  Attention:
Hilton  Schlosberg  with a copy to  Benjamin  Polk,  Winston & Strawn,  200 Park
Avenue,  New York, New York 10166,  and any notice  hereunder to Holder shall be
addressed to him at 14 Vienne, Irvine, California 92606, subject to the right of
either party to designate at any time hereafter in writing some other address.

     16.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.

     17. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.

     18.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute one and the same instrument.


<PAGE>


     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written.


                                                     HANSEN NATURAL CORPORATION


                                           By:/s/ HILTON H. SCHLOSBERG
                                              ------------------------  
                                           Title:  Vice Chairman

/s/ RODNEY C. SACKS
-----------------------------------
Rodney C. Sacks




                             STOCK OPTION AGREEMENT


          This Stock Option Agreement  ("Agreement") is made as of May 28, 2003,
     by and between  Hansen Natural  Corporation,  a Delaware  corporation  (the
     "Company"), and Hilton H. Schlosberg ("Holder").

                              Preliminary Recitals

          A. Holder is an employee of the Company or one of its  subsidiaries or
     affiliates.

          B. Pursuant to the Hansen Natural  Corporation  2001 Stock Option Plan
     (the "Plan"), the Company desires to grant Holder an incentive stock option
     to purchase shares of the Company's common stock, par value $.005 per share
     (the "Common  Stock"),  subject to the terms and conditions of the Plan and
     subject further to the terms and conditions set forth below.       


        NOW, THEREFORE, the Company and Holder agree as follows:

          1. Grant of  Incentive  Stock  Option.  The Company  hereby  grants to
     Holder, subject to the terms and conditions set forth herein, the incentive
     stock option ("ISO") to purchase up to 150,000  shares of Common Stock,  at
     the  purchase  price of $4.20 per  share,  such ISO to be  exercisable  and
     exercised as hereinafter provided.

          2.  Exercise  Period.  The ISO shall  expire  three  months  after the
     termination   of  the  Holder's   employment   with  the  Company  and  its
     subsidiaries  and affiliates  (the "Hansen Group") unless the employment is
     terminated
 by a member of the Hansen Group for Cause (as defined  below) or
     unless  the  employment  is  terminated  by  reason  of the  death or Total
     Disability  (as defined  below) of Holder.  If the Holder's  employment  is
     terminated by a member of the Hansen Group for Cause,  the ISO shall expire
     as of the date employment terminates. If the Holder's employment terminates
     due to his  death or Total  Disability,  then the ISO may be  exercised  by
     Holder  or the  person or  persons  to which  Holder's  rights  under  this
     Agreement  pass by  will,  or if no such  person  has  such  right,  by his
     executors or  administrators,  within six months after the date of death or
     Total  Disability,  but no later  than the  expiration  date  specified  in
     Section 3(d) below.  "Cause" means the Holder's act of fraud or dishonesty,
     knowing  material  failure to comply with  applicable  laws or regulations,
     drug or alcohol abuse, as determined by the Committee of the Hansen Natural
     Corporation Stock Option Plan (the  "Committee").  "Total Disability" means
     the complete and permanent inability of Holder to perform all of his duties
     of employment  with the Company,  as  determined by the Committee  upon the
     basis of such evidence,  including independent medical reports and data, as
     the Committee deems appropriate or necessary.

<PAGE>

        3.      Exercise of Option

               (a) Subject to the other terms of this  Agreement  regarding  the
          exercisability of the ISO, the ISO may only be exercised in respect of
          the  number of shares  listed in column A from and after the  exercise
          dates listed in column B,

                        Column "A"                       Column "B"
                    Number of Shares                   Exercise Date
                    ----------------                   ---------------
                         30,000                        January 1, 2004
                         30,000                        January 1, 2005
                         30,000                        January 1, 2006
                         30,000                        January 1, 2007
                         30,000                        January 1, 2008


               (b) This ISO may be exercised,  to the extent  exercisable by its
          terms,  from time to time in whole or in part at any time prior to the
          expiration  thereof.  Any exercise  shall be  accompanied by a written
          notice to the Company specifying the number of shares as to which this
          ISO is being exercised (the "Option Shares"). Notations of any partial
          exercise  or  installment  exercise,  shall be made by the  Company on
          Schedule A hereto.

<PAGE>

               (c)   Notwithstanding   the  above,   this  ISO  shall  be  fully
          exercisable in the event Holder's  employment with the Hansen Group is
          terminated by Holder for "Good Reason" (as defined below), or a member
          of the Hansen Group  terminates  his  employment  without  "Cause" (as
          defined  above).  "Good  Reason"  means the  Holder's  termination  of
          employment  with  the  Hansen  Group on or  after a  reduction  in his
          compensation  or benefits,  his removal as the Company's Vice Chairman
          of the Board of Directors,  President,  Chief Operating Officer, Chief
          Financial  Officer  or  Secretary,  or his  being  assigned  duties or
          responsibilities that are inconsistent with the dignity, importance or
          scope of his position with the Company.

               (d)  Notwithstanding  anything else herein to the contrary,  this
          ISO shall expire ten years from the date of this agreement.

               (e) The Holder  hereby agrees to notify the Company in writing in
          the event  shares  acquired  pursuant to the  exercise of this ISO are
          transferred,  other  than  by  will  or by the  laws  of  descent  and
          distribution,  within  two  years  after the date  indicated  above or
          within one year after the  issuance  of such  shares  pursuant to such
          exercise.

          4.  Payment  of  Purchase  Price  Upon  Exercise.  At the  time of any
     exercise of the ISO the purchase  price of the ISO shall be paid in full to
     the Company in either of the following  ways or in any  combination  of the
     following ways:

               (a) By check or other immediately available funds.

               (b) With  property  consisting  of shares of Common  Stock.  (The
          shares of Common Stock to be used as payment shall be valued as of the
          date of exercise of the ISO at the Closing Price as defined below. For
          example,  if Holder  exercises  the option for 4,000 shares at a total
          Exercise Price of $7,000,  assuming exercise price of $1.75 per share,
          and the Closing Price is $5.00, he may pay for the 4,000 Option Shares
          by transferring 1,400 shares of Common Stock to the Company.)

<PAGE>

               (c) For  purposes of this  Agreement,  the term  "Closing  Price"
          means, with respect to the Company's Common Stock, the last sale price
          regular-way  or, in case no such sale takes  place on such  date,  the
          average  of the  closing  bid  and  asked  prices  regular-way  on the
          principal  national  securities  exchange on which the  securities are
          listed or admitted to trading;  or, if they are not listed or admitted
          to trading on any national securities exchange, the last sale price of
          the securities on the consolidated transaction reporting system of the
          National  Association of Securities Dealers (NASD"), if such last sale
          information  is reported on such  system or, if not so  reported,  the
          average of the closing bid and asked prices of the  securities  on the
          National  Association of Securities Dealers Automatic Quotation System
          ("NASDAQ")  or any  comparable  system or, if the  securities  are not
          listed on NASDAQ or a  comparable  system,  the average of the closing
          bid and asked prices as furnished by two members of NASD selected from
          time to time by the Company for that purpose.

          5. Purchase for Investment; Resale Restrictions. Unless at the time of
     exercise  of the ISO  there  shall be a valid  and  effective  registration
     statement  under the  Securities  Act of 1933 ("'33  Act") and  appropriate
     qualification  and  registration  under  applicable  state  securities laws
     relating to the Option Shares being acquired, Holder shall upon exercise of
     the ISO give a representation  that he is acquiring such shares for his own
     account for  investment  and not with a view to, or for sale in  connection
     with, the resale or distribution of any such shares. In the absence of such
     registration  statement,  Holder shall execute a written affirmation,  in a
     form  reasonably  satisfactory to the Company,  of such investment  intent.
     Holder  further  agrees that he will not sell or transfer any Option Shares
     until he requests and receives an opinion of the Company's counsel or other
     counsel  reasonably  satisfactory  to the  Company to the effect  that such
     proposed  sale or transfer will not result in a violation o the '33 Act, or
     a  registration  statement  covering the sale or transfer of the shares has
     been declared  effective by the Securities and Exchange  Commission,  or he
     obtains a no-action letter from the Securities and Exchange Commission with
     respect to the proposed transfer.

<PAGE>

          6.  Nontransferability.  This ISO shall not be transferable other than
     by will or by the laws of descent and distribution.  During the lifetime of
     Holder, this ISO shall be exercisable only by Holder.
     
          7. Adjustments.

               (a) If the Company  hereafter (i) declares a distribution  on its
          shares in shares, (ii) splits its outstanding  shares,  (iii) combines
          its  outstanding  shares into a smaller  number of  securities or (iv)
          issues  any  shares or other  securities  by  reclassification  of its
          shares  (including  any such  reclassification  in  connection  with a
          consolidation  or  merger  in  which  the  Company  is the  continuing
          entity),  the purchase  price in effect at the time of the record date
          for  such  distribution  or the  effective  date of such  subdivision,
          combination  or  reclassification  shall be  adjusted so that it shall
          equal the price  determined  by  multiplying  the purchase  price by a
          fraction,  the  denominator  of which  shall be the  number  of shares
          outstanding  immediately  after giving effect to such action,  and the
          numerator  of  which  shall  be  the  number  of  shares   outstanding
          immediately prior to such action.  Whenever the purchase price payable
          upon  exercise  of  the  ISO is  adjusted  pursuant  to the  preceding
          sentence above,  number of shares purchasable upon exercise of the ISO
          shall  simultaneously  be adjusted by multiplying the number of shares
          issuable upon exercise of the ISO immediately prior to the event which
          causes the  adjustment  by the  purchase  price in effect  immediately
          prior to the event  which  causes  the  adjustment  and  dividing  the
          product  so  obtained  by  the  purchase  price,  as  adjusted.   Such
          adjustments shall be made successively whenever any event listed above
          shall occur.

               (b) If, at any time, as a result of an  adjustment  made pursuant
          to paragraph 7(a) above,  the Holder shall become  entitled to receive
          any  securities of the Company  other than shares,  the number of such
          other  securities  so  receivable  upon  exercise  of  the  ISO  shall
          thereafter be subject to adjustment  from time to time in a manner and
          on terms as nearly  equivalent as practicable  to the provisions  with
          respect to the shares contained in paragraph 7(a) above.

<PAGE>

               (c) If any other event  contemplated in Section 10(a) of the Plan
          occurs,  adjustments  to the number and kind of shares subject to this
          ISO and/or to the  purchase  price for each share  subject to this ISO
          may be made in accordance with Section 10(a) of the Plan.

               (d) No adjustments  shall be made under this Section 7 that would
          have the effect of modifying this ISO under Internal  Revenue Code 422
          or 424.

               (e)  Whenever  the  purchase  price or the  number  of  shares is
          adjusted, as herein provided,  Hansen shall within 10 business days of
          the event  causing such  adjustment  give a notice  setting  forth the
          adjusted  purchase price and adjusted  number of shares  issuable upon
          exercise of the ISO to be mailed to the Holder.

               (f)  Notwithstanding  anything else herein to the contrary,  upon
          the  occurrence of a change in control (as defined in (g) below),  the
          option or any  portion  thereof  not  theretofore  exercisable,  shall
          immediately  become  exercisable in its entirety and the option (being
          the  option  to  purchase  shares  of  Common  Stock  subject  to  the
          applicable  provisions of the Plan and awarded in accordance  with the
          Plan in terms of section 1 above) may, with the consent of Holder,  be
          purchased  by the Company for cash at a price equal to the fair market
          value (as defined in 7(g) below) less the  purchase  price  payable by
          Holder to  exercise  the  option as set out in Article 1 above for one
          (1) share of Common Stock of the Company  multiplied  by the number of
          shares of Common  Stock  which  Holder has the option to  purchase  in
          terms of Article 1 above.

               (g) For the purposes of this agreement

                    (i) "Change in Control" means;

                         (A) the  acquisition of  "Beneficial  Ownership" by any
                    person (as  defined in rule 13 (d) - 3 under the  Securities
                    Exchange Act 1934),  corporation  or other entity other than
                    the Company or a wholly owned  subsidiary  of the Company of
                    20% or more of the outstanding Stock,

<PAGE>

                         (B) the sale or disposition of substantially all of the
                    assets of the Company, or

                         (C) the merger of the Company with another  corporation
                    in which  the  Common  Stock  of the  Company  is no  longer
                    outstanding after such merger.

                    (ii) "Fair Market Value" means,  as of any date, the Closing
               Price for one share of the  Common  Stock of the  Company on such
               date.

     8. The  provisions  of  Section  5(b)  (iii)  of the  Plan,  regarding  the
execution of a shareholder's agreement as a condition precedent to the Company's
obligation  to issue  shares  under the Plan,  shall not apply to the ISO or any
shares issued pursuant to the ISO.

     9. The  Company  represents  and  warrants  to Holder that (a) there are no
options  to  purchase  the  Company's  Common  Stock,  containing  the  same  or
substantially  the same  terms as the  ISO,  which  are  actively  traded  on an
established  market  within the  meaning  of  Internal  Revenue  Code 83 and the
regulations promulgated  thereunder;  and (b) the shares of the Company's Common
Stock issued upon exercise of the ISO, when issued in accordance  with the terms
hereof, will be duly authorized,  validly issued,  fully paid and nonassessable.
The Company  shall  reserve and keep  reserved out of its  authorized  shares of
Common Stock the number of shares of Common Stock that may be issuable from time
to time upon exercise of the ISO.

     10. No Rights as Stockholder.  Holder shall have no rights as a stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.

     11. No Right to Continue  Employment.  This Agreement shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen  Group nor shall it  interfere  in any way with the right of any such
member to terminate his employment at any time.

<PAGE>

     12.  Compliance With Law and Regulation.  This Agreement and the obligation
of the Company to sell and deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.  The Company  agrees to use its reasonable
efforts to obtain any necessary listing, registration,  qualification,  consent,
approval or agreement  as  expeditiously  as possible,  and the term of this ISO
shall be extended until 30 days  following the date such listing,  registration,
qualification, consent, approval or agreement is effected or obtained. Moreover,
this ISO may not be exercised if its exercise or the receipt of shares of Common
Stock pursuant thereto would be contrary to applicable law.

     13.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.

<PAGE>

     14.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.

     15. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 1010 Railroad  Street,  Corona,  California  92882,  Attention:
Rodney Sacks with a copy to Benjamin  Polk,  Winston & Strawn,  200 Park Avenue,
New York, New York 10166,  and any notice hereunder to Holder shall be addressed
to him at 2 Nidden,  Irvine,  California  92715,  subject to the right of either
party to designate at any time hereafter in writing some other address.

     16.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.

     17. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.

     18.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute one and the same instrument.

     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written.

                                                   HANSEN  NATURAL  CORPORATION


                                            By:/s/ RODNEY C. SACKS
                                               -------------------
                                            Title: Chairman and CEO


/s/ HILTON H. SCHLOSBERG
-----------------------------------
Hilton H. Schlosberg


EXHIBIT 31.1


    CERTIFICATION PURSUANT TO RULE 13A-14(a) OR 15D-14(a) OF THE SECURITIES
        EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Rodney Sacks, certify that:

1.  I  have  reviewed  this  annual  report  on  Form  10-K  of  Hansen  Natural
Corporation;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The  registrant's  other  certifying  officer(s)  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules  13a-15(e) and  15d-15(e)) for the registrant and we have: 

     a.   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be
  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5. The registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

     a.   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.




Date:    March 30, 2004                       /s/ RODNEY C. SACKS
                                              -------------------------------
                                              Rodney C. Sacks
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer




EXHIBIT 31.2


    CERTIFICATION PURSUANT TO RULE 13A-14(a) OR 15D-14(a) OF THE SECURITIES
        EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Hilton Schlosberg, certify that:

1.  I  have  reviewed  this  annual  report  on  Form  10-K  of  Hansen  Natural
Corporation;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The  registrant's  other  certifying  officer(s)  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

     a.   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures
  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5. The registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

     a.   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.



Date:  March 30, 2004                                /s/ HILTON H. SCHLOSBERG
                                                     --------------------------
                                                     Hilton H. Schlosberg
                                                     Vice Chairman of the
                                                     Board of Directors, 
                                                     President, Chief Operating
                                                     Officer, Chief Financial
                                                     Officer and Secretary




EXHIBIT 32.1


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  annual  report  of  Hansen  Natural  Corporation  (the
"Company")  on Form 10-K for the year ended  December 31, 2003 as filed with the
Securities and Exchange  Commission (the "Report"),  the undersigned,  Rodney C.
Sacks,  Chairman of the Board of Directors  and Chief  Executive  Officer of the
Company,  certifies,  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.


Date:  March 30, 2004                         /s/ RODNEY C. SACKS
                                              ---------------------
                                              Rodney C. Sacks
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer














EXHIBIT 32.2


                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  annual  report  of  Hansen  Natural  Corporation  (the
"Company")  on Form 10-K for the year ended  December 31, 2003 as filed with the
Securities and Exchange  Commission (the "Report"),  the undersigned,  Hilton H.
Schlosberg, Vice Chairman of the Board of Directors,  President, Chief Operating
Officer,  Chief  Financial  Officer and  Secretary  of the  Company,  certifies,
pursuant  to 18  U.S.C.  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley  Act of  2002,  that:  

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.


Date:   March 30, 2004                          /s/ HILTON H. SCHLOSBERG
                                                ------------------------
                                                Hilton H. Schlosberg
                                                Vice Chairman of the Board of
                                                Directors, President, Chief 
                                                Operating Officer, Chief 
                                                Financial Officer and Secretary