Today it has grown into Trail Journeys, a major Central Otago tourism business, which has 500 bikes for hire, 12 vans and buses and at the peak of the season employs 30 people, six of whom work fulltime and 24 who work between September and May.
When the rail trail was initially mooted, the mountain biker and adventure-race organiser was sceptical, but that attitude quickly changed with the growing interest from visitors wanting to hire bikes from his shop.
"I couldn't see the purpose of cycling a railway line that was flat but, the more I thought about it, I realised not everyone was a full-on cyclist. The merits of the trail were great in that it can be achieved by people of differing abilities."
Today he is a leading advocate, travelling to tourism fairs in New Zealand, Australia and London, selling the trail and his company's services.
He also soon realised cyclists viewed the trail as more than a 150km bike ride and, while the scenery was a major attraction, so was the chance to interact with locals and communities, spurring one client to comment it was a ride with a new adventure around the every corner.
"It offers a great deal more than just a cycle trail," Mr Grubb said.
Soon after the trail opened in 2000, Mr Grubb and employee Ritchie Bailey decided the trail could offer something more than casual business and that moving bags and gear along the trail and reuniting riders with vehicles could be the basis of a new business.
"It was just a natural progression. We pricked up our ears and listened," Mr Grubb said.
In 2004 Mr Grubb had a buyer for his Cycleworld retail business and so he and Mr Bayley took the plunge and set about developing Trail Journeys.
Mr Grubb said he saw similarities with the Otago Central Rail Trail and a kayaking business he visited in Golden Bay, where the operators had expanded the number of hire kayaks and developed a business shifting people and their belongings around.
They built a Skyline garage in Alexandra that doubled as an office and bike-storage facility for their 30 bikes, but the business outgrew it in its first year.
A large, empty railway goods shed at Clyde was a logical move, so they approached the owner, the Department of Conservation, about leasing it.
Mr Grubb said the building was far too big for the fledgling business, with Trail Journeys occupying a only corner of it with their two-person office, 30 bikes and a solitary van parked outside.
But as client numbers increased, they once again outgrew their premises and, in 2009, it was upgraded and expanded.
He describes those early trail customers as pioneers, cyclists who had few demands about the quality of accommodation and food available.
That has changed.
Today's rider wants a comfortable bed and shower, good food and drink, and communities along the trail had responded, Mr Grubb said.
"It is where we have got to go if we are to progress, but I'd hate to see it lose its local feel.
"The locals are friendly and they want to tell people about their area. People come back and comment that is what they like," he said.
That involvement, and locals' desire to tell visitors about the various communities together with the rural setting, had been the success of the trail, he said.
"They're not coming to a Queen St hotel; they're coming to a country area and a country experience."
Many of Trail Journeys staff were semi-retired local people, who were ideal because they had knowledge, a passion for the area and an interest in people, he said.
In hand with that growth, Trail Journeys has added new products, such as fully-guided tours and packages where riders are collected from Dunedin or Queenstown airports and taken to Alexandra, guided on the trail and then returned to the airports, along with side trips to St Bathans, Naseby and Macraes gold mine.
This has also led to other expansion. In 2008 they bought premises at Middlemarch, and in 2009 they bought Catch-A-Bus.
With the threat of an end to public fuel sales in Middlemarch, Trail Journeys established a card-operated fuel dispenser in the town.
It has also grown to the point where Trail Journeys is working with cycle-maker Avanti to make customised bikes which are designed to make riding more comfortable for clients, many of whom are not regular riders.
Financially, Trail Journeys has gone from strength to strength.
In its first full year of business, 2005-06, revenue grew 117% off a low base, but growth in 2008-09 was a healthy 22% and last year saw a further increase of 48%. Average growth from 2005-06 to 2009-10 has been a more-than-respectable 59%.
Trail Journeys also sees potential revenue stream from a new booking and logistics computer program it is developing, which will assist with the movement of bags and people along the trail.
The ownership structure has also changed in recent years.
Mr Bayley retired in 2007 so, to develop Trail Journeys further, Mr Grubb sold shares to strategic partners.
He became managing director and the day-to-day running shifted to son-in-law and shareholder Shayne O'Connor.
Mr Grubb said the development of other rail trails would only enhance New Zealand's reputation as a destination for international cyclists, who he believes will be the next influx of users.
If the attraction was promoted well, cycle tourists from the United States, Europe and the United Kingdom would travel to New Zealand to ride several trails, something which was affordable, rather than just ride the Otago Central Rail Trail.
"It makes it attractive," he said of the expanding trail network.
This was the message he received when visiting the UK recently, and he believed all trails would benefit from a joint international marketing push.
Mr Grubb hopes Trail Journeys will be able to expand and have a business involvement in other trails.
"The next challenge for our business is to be involved in more than just the Otago Central Rail Trail."
As for the Otago Central Rail Trail, Mr Grubb believes it will gain a status similar to that of the Milford Track in tramping circles, as New Zealand's original great cycle ride.
Trail Journeys, Alexandra
• 2010 Westpac Otago Chamber of Commerce Business Excellence Awards, winner Tourism Dunedin Tourism Award.
• Since 2004 has catered for cyclists riding the Otago Central Rail Trail.
• Grown from two people, 10 bikes and one van in 2004 to 500 bikes, 12 vans and buses and 30 people at the peak of the season.
