Maggie's Farm Rum Distillery closes Upper St. Clair restaurant
A popular Pittsburgh-area distillery got into the restaurant business last year and is already pulling out.
Maggie's Farm Rum closed up the restaurant side of the business earlier this month.
According to the president of the company that owns Maggie's Farm, because of the economic uncertainty and the rise in food costs, they've had to stop operating the restaurant part of this industry.
It was just last March when Maggie's Farm celebrated opening its restaurant at its Upper St. Clair building. In a post made three weeks ago, they announced the restaurant will stop running indefinitely. A letter on the entrance to their facility said more of the same.
"Starting any new business is a challenge. In the restaurant industry, estimates are about 20% of restaurants fail within the first year," Point Park University's marketing and sales program director, Dr. Dorene Ciletti, said.
According to Dr. Ciletti, that number jumps to 40% that fail within the first five years.
Consumer behavior can play a role for businesses trying to get on their feet. Maggie's Farm's ownership said the unknown with the economy and rising food costs forced their hand.
"Right now, there isn't a lot of stability in the market. There's talk of interest rate changes. There's still talk of tariffs and tariff levels," Dr. Ciletti said.
Dr. Ciletti said there's no predicting when the economic uncertainty will end. The restaurant industry is known for having thin margins, so major changes can force a business to close up.
"So, even small increases in supply costs, whether that be food or other materials or additional investments, need in technology can quickly become a problem," Dr. Ciletti said.
Maggie's Farm said it will still run its distilling and bar business at its Strip District location.
It will continue its main production, tastings, and bottle sales in Upper St. Clair. They said all outstanding gift cards can be used at their Strip District location.