Faulty market research, tricky regulations, and a bad location helped drive Brew Doctors, a brew-your-own-beer store, into bankruptcy. A business obit.
THE BUSINESS: Brew-your-own-beer store
OPENED: June 1997
CLOSED: June 1998
CAUSES OF DEATH: Limited Florida market for customized beer; regulatory restrictions in setting volume and price of product
The last bottles of Tampa Bay Special Lager and Pelican Breath Stout are all gone now, and Christopher van Dijk's beer kettles have been carted away. "It was great while it lasted," says van Dijk with a sigh, speaking of his defunct brew-your-own-beer business in Tampa.
From the day in 1995 when he read a magazine story about the so-called brewing-on-premises craze, van Dijk dreamed big--of first opening three stores of his own, then franchising out another eight, and finally, selling the entire company for a handsome return. But Brew Doctors, the business van Dijk started in June 1997, would quickly go flat, quashing his ambitions.
Van Dijk, 35, a former navy helicopter pilot, located Brew Doctors in Tampa mainly because he wanted to live on Florida's Gulf Coast. But he also factored into his business plan that he'd be the first in the area to offer local beer connoisseurs the chance to make custom brews (30 recipes in all). And he figured that Tampa and its surrounding area, with a population of more than 2 million, would allow ample room to expand.
Van Dijk saved thousands of dollars by buying secondhand beer kettles and other used start-up supplies in Canada, where the brew-your-own fad took off in the late 1980s. Early media buzz about Brew Doctors helped fuel his optimism.
Despite the brisk sale of gift certificates at Christmas, however, business lagged, and van Dijk fell far short of the 800 regular customers he needed to be viable. He speculates that some Tampa residents may have thought his beer was too exotic for their taste. A bigger problem, he now believes, was that customers had to buy a minimum of five and a half cases of the beers they brewed, plus pay a onetime $35 fee for the bottles. "By the time you were out the door, you could easily drop $150," says van Dijk, who now thinks renting the bottles to customers would have been smarter.
Under Florida law, Brew Doctors was barred from selling individual six-packs and cases. But van Dijk was able to start a "brew club," through which cost-conscious customers could legally buy just one case of the beer they'd made and let other club members purchase the rest.
The club, founded last March, was an immediate hit, says van Dijk. But by then Brew Doctors had racked up debt of more than $100,000. The extra business the brew club brought in was too little too late, and van Dijk had to file for Chapter 7 in June.
That's a fate not unknown among brew meisters like van Dijk. Roughly a third of the almost 90 brew-your-own-beer businesses that sprang up in the United States in the mid 1990s have already gone under, says Diana Shellenberger, associate editor of The New Brewer Magazine, a trade magazine based in Boulder, Colo. "People are throwing their hands up," she says, noting that the high alcohol taxes that made brew-your-own beers a relative bargain in Canada are much less of a problem in the United States.
Van Dijk, now an executive recruiter, agrees that his business was probably doomed from the start, despite the fierce loyalty of some former customers. One of them, David Owen, says that he's so distraught over Brew Doctors' demise that he's considering drastic measures: "I'll probably go back to scotch."