Chipotle CEO Brian Niccol will take over as CEO of Starbucks Sept. 9, and he has the support of Starbucks founder and Chairman Emeritus Howard Schultz.
“I know how excited [Schultz] is,” Starbucks board chair Mellody Hobson said during an interview with CNBC. “When I called him and told him what we were doing and what I have been working on and what the board had been pursuing, he said, ‘Mellody, that’s a home run.’”
Schultz’s seal of approval heralds what leadership hopes will be a new era that addresses challenges and drives future growth.
Niccol replaces Laxman Narasimhan. The transition comes after Elliott Management became one of Starbucks’ largest investors.
“We welcome the appointment of Brian Niccol, and we look forward to continuing our engagement with the board as it works toward the realization of Starbucks’ full potential,” the activist hedge fund, which has previously targeted major corporations for change, said in a statement.
Schultz was critical of Starbucks’ trajectory under Narasimhan, who relied on discounting and new products to revitalize the company after he became CEO in March 2023, CNBC reported. Starbucks struggled with declining sales over several quarters, including drops in China and softness in the U.S. market.
Industry analysts were positive in their assessment of Niccol’s appointment. In an interview with PYMNTS, Amanda Lai, a retail analyst and director for consultancy McMillan Doolittle, said it is “a logical choice to help revitalize the momentum behind the company and address the complex challenges facing the company as consumer preferences continue to evolve and competition continues to grow in the coffeehouse sector.”
Greg Zakowicz, senior eCommerce expert at Omnisend, told PYMNTS Niccol’s hire is promising.
“It’s surprising, but he may just be the perfect fit for the organization,” Zakowicz said. “He has an impressive background, especially in the food industry where products are nonessential items, and has successfully led companies like this during challenging economic times. With a continual increase of consumers trading down on items like groceries, I don’t think this should be understated. He knows how to appeal to consumers at times when their wallets are tight. That is one thing Starbucks desperately needs.”
Rachel Ruggeri will serve as Starbucks’ interim CEO until Niccol begins, Reuters reported. Niccol became CEO of Chipotle in 2018 and is credited with driving growth and innovation at the company. Chipotle’s stock has performed well, tripling over the last five years.
Scott Boatwright will step in as interim CEO following Niccol’s departure Aug. 31. Boatwright, who has been with Chipotle since 2017, has been instrumental in overseeing operations for more than 120,000 employees and over 3,500 stores, as well as integrating key technologies within the restaurants, according to a press release.
Niccol is no stranger to the QSR sector. During his tenure as CEO of Taco Bell from 2015 to 2018, Niccol implemented several strategies that improved the brand’s performance.
He introduced the Breakfast Menu, attracting new customers and enhancing the brand’s appeal, and the Doritos Locos Tacos, which drove an increase in sales. Niccol also spearheaded Taco Bell’s digital transformation by launching a user-friendly app that streamlined ordering and boosted customer engagement.
His focus on operational efficiency and cost management enhanced profitability and solidified Taco Bell’s position as a modern, innovative player in the fast-food industry. Additionally, his efforts to expand Taco Bell’s international footprint and accelerate store openings contributed to the chain’s global growth.
At Chipotle, Niccol led a turnaround from 2018 to 2024, nearly doubling the company’s revenue and achieving a stock surge of nearly 800%, Starbucks said in a press release.
Niccol introduced successful menu innovations and expanded digital capabilities, including online ordering, delivery services and the Chipotle Rewards program.
“Niccol’s previous experience at the helm of Chipotle will lend itself well to reinvigorating the Starbucks brand,” Lai said. “At Chipotle, Niccol’s focus on digital transformation, operational efficiency and customer engagement helped lead the fast-casual chain into a new phase of growth. Initiatives included re-envisioning its online ordering platform to grow digital sales, launching and growing Chipotle loyalty program to drive customer engagement, and simplifying the menu to improve in-store operations.”
She added that the Chipotle Rewards loyalty program “introduced personalized challenges and achievement rewards to gamify the experience and drive engagement with customers. He could similarly look to refresh the Starbucks Rewards program by emphasizing personalization and adding experiential elements to increase loyalty and drive retention.”
While Narasimhan’s tenure as CEO at Starbucks was marked by declining global sales, Niccol’s CEO trajectory at Taco Bell and Chipotle has ridden a wave of positive momentum.
During his tenure at Chipotle, Lai explained, Niccol created an environment centered on innovation and continuous improvement. His emphasis on learning and development empowered employees at all levels of the organization and drove improvements in operational excellence and service quality.
“This could translate well to bringing a new energy to Starbucks where morale has been challenged by multiple leadership changes and ongoing pressures from union campaigns over the years,” Lai said. “In the age of digital transformation, Starbucks needs a leader who can re-establish trust and loyalty among both its employees and customers while forging a path forward that positions the company as a digital-first leader in a crowded coffee landscape. With his experience driving digital initiatives, such as launching loyalty and expanding mobile ordering and delivery at Chipotle, Niccol is well-positioned to further refine and evolve Starbucks’ digital growth plans to help Starbucks navigate the evolving competitive landscape and drive sustainable growth.”
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