TOPLINE
Starbucks announced Thursday that former PepsiCo executive Laxman Narasimhan will succeed Howard Schultz as its CEO, as the company wrangles with issues from a massive unionization push at its stores to declining sales in China.
KEY FACTS
Narasimhan, 55, will take over Starbucks’ day-to-day operations from Schultz on April 1, the company said in a news release.
Narasimhan said earlier Thursday that he planned to step down at the end of September as CEO of the U.K.-based cleaning and health products manufacturer Reckitt Benckiser, the maker of Lysol and Clearasil, a role he’s served in for three years.
The Indian-born Narasimhan worked in various executive roles at PepsiCo from 2012 to 2019, rising to chief commercial officer, and at one point struck a deal with Starbucks to partner to sell the coffee brand’s pre-packaged beverages, according to the Wall Street Journal.
Narasimhan spent 19 years at McKinsey & Co. prior to joining PepsiCo.
Narasimhan was credited by analysts with executing an effective turnaround strategy at Reckitt, selling underperforming units and capitalizing on a surge in demand for Lysol amid the pandemic.
His two grown children live in the U.S. and he had been looking to return to the country, according to the New York Times.
CRUCIAL QUOTE
“He’s a true operator and has the DNA of an entrepreneur,” Schultz told the Times, asserting that Narasimhan’s strengths in technology and supply chain management would be an asset to Starbucks.
KEY BACKGROUND
Schultz has served as interim CEO since March—marking his third stint as head of the company—after former company head Kevin Johnson stepped down. Schultz’s tenure has been tumultuous, with the CEO pushing back against a rapidly expanding unionization effort at the company’s stores. Unions have formed at more than 200 Starbucks locations over the past few months, while organization efforts are in the works at many more stores. Schultz has also pushed for a major company overhaul, which includes rethinking how baristas make drinks.
FURTHER READING
Starbucks Names Laxman Narasimhan New CEO (Wall Street Journal)
Starbucks Is Rethinking Almost Everything, Including How to Make Frappuccinos (Wall Street Journal)
By Nicholas Reimann, Forbes Staff