Brian Niccol, the
Incoming Starbucks C.E.O. Replaces Laxman Narasimhan
Mr.
Niccol, whom the coffee chain poached from Chipotle the burrito chain, has
emerged in recent years as a top leader in the restaurant industry.
Starbucks
unveiled an abrupt leadership change on Tuesday: Brian Niccol, a high-profile
name in the restaurant industry, is taking the reins, after months of weak
sales at the coffee giant and a falling stock price.
Mr.
Niccol will step in as chief executive next month, replacing Laxman Narasimhan,
whose relatively brief stint in the top job at Starbucks began in March last
year. The company’s chief financial officer, Rachel Ruggeri, will serve as
interim chief executive until Mr. Niccol officially joins the company on Sept.
9.
Starbucks’
shares soared on Tuesday after the announcement, rising about 20 percent as
investors — including activist investment groups that have pushed the company
to make changes — largely cheered the leadership pivot.
Here’s
what to know about the incoming Starbucks leader.
Chipotle
saw rapid growth during his tenure.
Mr.
Niccol is coming off of six years at the helm of Chipotle Mexican Grill — a
period that saw the fast-casual burrito chain nearly double its sales. The
company’s stock price has increased about 800 percent since he took over in
early 2018.
Much
of that growth has stemmed from Mr. Niccol’s focus on opening more
drive-through options and expanding the company’s loyalty program.
The
expansion was a notable comeback for the burrito giant. When Mr. Niccol took
over the company in 2018, he was immediately confronted with a test: a string
of food-borne illnesses among Chipotle’s customers from 2015 to 2018 that
resulted in the stock slump and distrust among consumers. As one of his first
moves as chief executive, Mr. Niccol retrained the restaurant staff in food
safety. About one year into the job, the chain’s stock price had surpassed its
value when the food safety crisis began.
But
some analysts are cautioning that Mr. Niccol faces even bigger hurdles as he
gears up to boost sales at Starbucks, which is grappling with weakening results
in some of its biggest markets, particularly the United States and China.
His
résumé is peppered with high-profile restaurant roles.
Before
joining Chipotle, Mr. Niccol spent three years as chief executive of Taco Bell,
part of the fast food giant Yum! Brands. There, he
introduced new menu items, sold off stores to franchisees and focused on
digital efforts like mobile ordering, an approach he later carried over to
Chipotle.
At
Taco Bell, he also showcased his ability to revamp a brand’s reputation. A
lawsuit filed in 2011 alleged that the company’s taco mixture was more filler
than beef. The suit was ultimately withdrawn, but not before hurting Taco
Bell’s sales and reputation. Mr. Niccol helped to revive Taco Bell in the
public eye, with social media initiatives like a Snapchat taco lens.
That
résumé stands in contrast to Mr. Narasimhan’s when he took over Starbucks last
year. The former chief executive of Reckitt, which owns brands like Lysol and
Air Wick, Mr. Narasimhan had little-to-no background in restaurant chains.
The
shadow of Howard Schultz, who had three stints as chief executive of Starbucks,
also continues to loom large over the chain. Mr. Schultz, who holds the title
of chairman emeritus, was quick to criticize the company’s performance and
leadership during its recent struggles.
“The
thing about Howard is that he has a big shadow,” said Sharon Zackfia, an analyst at the investment bank William Blair.
“He has been a big figure in Starbucks for such a long time, the only person I
can think of that’s out there who would be able to stay in the sun is Brian
Niccol. He’s done such a phenomenal job at Chipotle. So, other than Howard
coming back, there couldn’t be a better pick than Brian to lead Starbucks.”
He’s
been criticized for opposing union drives.
Labor relations are in the spotlight at
Starbucks, which has faced mounting pressure from union officials and activists
who accuse the company of illegally retaliating against workers and resisting
contract negotiations. This year, under Mr. Narasimhan, Starbucks made progress
toward bargaining a framework for a labor contract
with union stores, and the company said that it hoped to wrap up the bargaining
process with individual stores by the end of the year.
But
under Mr. Niccol’s leadership, Chipotle has received criticism for offering
what the Teamsters union called an “insulting” wage increase in contract
negotiations with a store in Lansing, Mich. In 2022, Mr. Niccol said at a Yahoo
Finance summit that “I really don’t think we need a third party to get between
our restaurant teams and our company,” but said he would work with the union.
That
same year, the National Labor Relations Board found
that Chipotle, with Mr. Niccol at the helm, violated federal labor law by closing a store in Augusta, Maine, that tried
to form a union and firing workers. The company agreed to pay $240,000 to the
former employees to settle the complaint.
In
a statement, Workers United — which is part of the Service Employees
International Union and represents workers at more than 400 of Starbucks’
roughly 10,000 company-owned stores in the United States — said it planned to
keep working with Starbucks to “reach fair collective bargaining agreements in
the coming months.”