Starbucks Coffee has named Laxman Narasimhan as its next CEO, replacing interim chief executive Howard Schultz effective April 1, 2023.
Narasimhan has previously served as the CEO of health and nutrition multinational Reckitt. Currently based in London, Narasimhan will relocate to Seattle for the role and will join the company full time as its “incoming CEO” on October 1 to work alongside Schultz and to visit company stores, manufacturing plants and coffee farms before taking the reins next year. He will also join the coffee giant’s board of directors beginning in April.
“Laxman is an inspiring leader. His deep, hands-on experience driving strategic transformations at global consumer-facing businesses makes him the ideal choice to accelerate Starbucks growth and capture the opportunities ahead of us,” said Mellody Hobson, independent Starbucks board of directors chair, in a press release. “His understanding of our culture and values, coupled with his expertise as a brand builder, innovation champion, and operational leader will be true differentiators as we position Starbucks for the next 50 years, generating value for all our stakeholders.”
Schultz, who on-and-off has been Starbucks’ longest serving CEO, returned to the role on an interim basis in April after the resignation of his successor, Kevin Johnson. He previously held the CEO role from 1986 to 2000 and again from 2008 to 2017. During this interim period, Schultz has taken a symbolic salary of just $1.
“Starbucks commitment to uplift humanity through connection and compassion has long distinguished the company, building an unrivaled, globally admired brand that has transformed the way we connect over coffee,” Narasimhan said in the release. “I am humbled to be joining this iconic company at such a pivotal time, as the Reinvention and investments in the partner and customer experiences position us to meet the changing demands we face today and set us up for an even stronger future.”
Prior to working at Reckitt, Narasimhan held a variety of roles at PepsiCo, including global chief commercial officer and as CEO of the company’s Latin America, Europe and Sub-Saharan Africa operations. He also previously was a senior partner at McKinsey & Company.
According to the release, “Narasimhan is also a trustee of the Brookings Institution, a member of the Council on Foreign Relations, served as a member of the UK Prime Minister’s Build Back Better Council, and is a member of Verizon’s Board of Directors.”
Stepping into the role, Narasimhan faces a number of challenges at Starbucks as the company continues to face unionization efforts at its U.S. stores. Schultz has not shied away from publicly opposing union campaigns, offering raises and benefits only to non-unionized employees and stating that he sees the unions as a “third party.” However, these statements and actions have attracted scrutiny from federal regulators, the National Labor Relations Board (NLRB) and investors.
As well, the company continues to face pressure from inflation – raising menu prices at its U.S. stores – as well as the pandemic, as the Chinese market lags under lockdowns.
Another area Narasimhan may focus on is web3. In May, Schultz announced Starbucks’ intent to embrace web3 innovations like NFTs and blockchain and said the next CEO should have an interest in continuing to adopt the technology.