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| Photo Credit: AP. |
(AP) - Starbucks has named a longtime PepsiCo executive as its new CEO.
The coffee
giant said Thursday that Laxman Narasimhan will join Starbucks on Oct. 1 after
relocating from London to Seattle, where Starbucks is based.
He will work
closely with Starbucks’ interim CEO Howard Schultz through April 1, when he
will assume the CEO role and join the company’s board.
Schultz said
Narasimhan is “uniquely positioned” to lead the company, with a demonstrated
track record of growth in both mature and emerging markets.
“As I have
had the opportunity to get to know him, it has become clear that he shares our
passion of investing in humanity and in our commitment to our partners,
customers, and communities,” Schultz said in a statement.
Narasimhan,
55, was most recently CEO of Reckitt, a U.K.-based consumer health, hygiene and
nutrition company that makes Lysol cleaner and Enfamil formula, among other
products. Reckitt had announced Narasimhan’s surprise departure earlier
Thursday. Reckitt’s shares dropped 5% following the announcement.
Prior to
that, Narasimhan held various leadership roles at PepsiCo, including as global
chief commercial officer. He also served as CEO of the company’s Latin America,
Europe and Sub-Saharan Africa operations.
Narasimhan
has also served as a senior partner at the consulting firm McKinsey & Co.,
where he focused on its consumer, retail and technology practices in the U.S.,
Asia and India.
Schultz, a
longtime CEO who helped shape Starbucks after buying it in 1987, came out of
retirement and assumed the interim CEO job in March after the company’s former CEO,
Kevin Johnson, announced his retirement. Schultz also returned to the company’s
board, and will remain there even after Narasimhan takes over.
Schultz said
he had not planned to return, but wanted to help reshape the company after the
pandemic, which upended Starbucks’ coffee shops and sped changes including a
heavier mix of drive-thru orders.
Narasimhan
takes over a company with significant strengths. Starbucks reported record
demand in the April-June period as strong U.S. sales made up for continuing
closures in China, the company’s second-largest market.
But
Starbucks also has challenges. Schultz has been working on a plan to remake
store layouts, upgrade equipment and bolster employees, who came out of the
pandemic feeling harassed and underappreciated. Starbucks announced a $1
billion investment in employee wages and benefits last fall and added $200
million more for pay, worker training and other benefits in May.
Still, the
company faces an unprecedented unionization effort, which it opposes. At least
233 U.S. Starbucks stores have voted to unionize since late last year.
Narasimhan
worked with unions at Reckitt, where 23% of employees were unionized at the end
of last year.
He holds a
degree in mechanical engineering from the University of Pune in India and a
master’s degree in German and international studies from The Lauder Institute
at the University of Pennsylvania. He also has a master’s in business
administration from the University of Pennsylvania’s Wharton School.