On Tuesday, Starbucks (NASDAQ: SBUX) tapped Chipotle Mexican Grill’s (NYSE: CMG) head Brian Niccol 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 (NASDAQ: SBUX).
Who is Brian Niccol?
Niccol has been the CEO at Chipotle (NYSE: CMG) 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 (NYSE: YUM), 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: PG).
Currently, he is on the board of big-box retailer Walmart (NYSE: WMT) and has previously served on the boards of homebuilder KB Home (NYSE: KBH) and bike maker Harley-Davidson (NYSE: HOG).
Niccol graduated from Miami University and an MBA from the University of Chicago Booth School of Business.
How did Niccol turn around Chipotle Mexican Grill (NYSE: CMG)?
During Niccol’s tenure, Chipotle’s 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 for 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.
Niccol, who has focused on modernizing the burrito chain’s digital and mobile ordering platforms, is credited with introducing digital order pick-up lanes, called Chipotlanes.
Out of the 271 new restaurants opened by the company at the end of last year, 238 of them had a Chipotlane.
How has Wall Street reacted to Niccol’s appointment?
Shares of Starbucks (NASDAQ: SBUX) surged as much as 23.7%, while Chipotle Mexican Grill (NYSE: CMG) tumbled as much as 14%.
David Palmer, an analyst at Evercore ISI:
“Brian is likely the one restaurant executive that has the gravitas to address the Howard Schultz Founder ‘overhang’.”
Andrew Charles, an analyst at TD Cowen:
“Starbucks picks up a hall-of-fame restaurant CEO, and his appointment … suggests a new era is underway. 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, 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.”
(Source: ReutersReuters)
