(Reuters) – Starbucks (NASDAQ:) tapped Chipotle Mexican Grill (NYSE:)’s head Brian Niccol on Tuesday to lead the coffee giant known for its pricey lattes amid pressure from activist investors and declining sales in the U.S. and China.
Here are some facts about the new CEO at Starbucks.
Who is Brian Niccol?
Niccol has been the CEO at Chipotle since March 2018 and took on the additional role of chairman from March 2020.
He was CEO of Taco Bell, a division of Yum Brands, from 2015 to early 2018 and before that had held positions at Pizza Hut, another banner under Yum.
Before his stint at Yum, Niccol spent 10 years at consumer goods giant Procter & Gamble (NYSE:).
Currently, he is on the board of big-box retailer Walmart (NYSE:) and has previously served on the boards of homebuilder KB Home (NYSE:) and bike maker Harley-Davidson (NYSE:).
How did Niccol turn around Chipotle Mexican Grill?
During Niccol’s tenure, Chipotle sales doubled to about $10 billion in fiscal 2023, while the burrito chain’s stock has more than tripled in value over the last five years.
He was also responsible in turning around Chipotle’s reputation after a series of food safety lapses in 2018, with steps such as re-training restaurant employees on safety and wellness protocols during working hours.
Under him, the burrito and rice bowl maker added nearly 1,000 new stores globally. The company also started the use of automated avocado processors that cut guacamole preparation time by 50% and robotic dual-sided grills to speed up cooking.
How has Wall Street reacted to Niccol’s appointment?
Shares of the coffee chain surged as much as 23.7%, while Chipotle Mexican Grill tumbled as much as 14%.
Thomas Hayes, chairman at Great Hill Capital:
“He (Niccol) is going to turn the company around. It will be a little bit of a heavy lift for the first few quarters, but Niccol has proven what he can do at Chipotle.”
David Palmer, analyst at Evercore ISI:
“Brian is likely the one restaurant executive that has the gravitas to address the Howard Schultz Founder ‘overhang’.”
Andrew Charles, analyst at TD Cowen:
“Starbucks picks up a hall-of-fame restaurant CEO, and his appointment … suggests a new era is under way. We see similarities between Chipotle’s 2018 turnaround for a premium brand, and what Starbucks needs in 2024 to improve traffic.”
Nancy Tengler, CEO of Laffer Tengler Investments, that owns shares of both companies:
“I cheered at the Starbucks news … the stock has been a colossal disappointment, as has Laxman … Brian Niccol just worked magic at Chipotle … he did all the right things and really drove the company using Chipotle lanes, through the use of digitization … Niccol will fix Starbucks.”
