Incoming Starbucks boss to bring consumer insight to coffee culture

Incoming Starbucks boss to bring consumer insight to coffee culture

September 4, 2022 Off By administrator

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LONDON, Sept 2 (Reuters) – Laxman Narasimhan may have no experience of running coffee shops, but the outgoing CEO of British packaged goods group Reckitt will bring insight into the changing habits of consumers when he takes over at Starbucks.

At Reckitt (RKT.L), maker of Strepsils throat lozenges and Dettol floor cleaner, the 55-year-old Narasimhan spearheaded a sweeping, but unfinished, corporate turnaround, while honing relationships with retailers ranging from Walmart (WMT.N) to Tesco (TSCO.L).

When he joins Starbucks in October, Narasimhan will have to adapt his focus to serving the millions of people who step into the coffee chain’s roughly 32,000 stores every day.

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But his background, including a stint of several months as PepsiCo’s (PEP.O) chief commercial officer in 2019, should ensure a smooth transition to Starbucks, analysts said.

“I don’t think he’s had material exposure to direct-to-consumer businesses or in running retail networks,” Credit Suisse analyst Eamonn Ferry said.

“He has no direct experience in coffee, so you could question that. However, he does hold a deep understanding of the consumer and this is far more important,” Ferry added.

Narasimhan is succeeding interim CEO Howard Schultz, who re-joined the chain a third time after prior CEO Kevin Johnson retired this spring. read more

Starbucks identified Narasimhan as a potential successor to Johnson well over a year ago as they were strategizing the coffee chain’s future and evaluating both internal and external candidates, sources familiar with the matter said.

Charles Tribbett III, who co-leads Russell Reynolds Associates CEO and board advisory business, led the search for Johnson’s successor, said the sources.

The world’s biggest coffee chain is reworking its business model from a focus on cafes to mobile pickup and delivery, while facing higher costs for ingredients and labour. read more

Seattle-based Starbucks also faces a labour union drive, with more than 200 of its U.S. stores having unionized in the past year and staff pushing for improved benefits and wages.

Narasimhan, who also spent nearly two decades at consultancy and well-known turnaround firm McKinsey & Co, will have six months after joining to get to grips with the business before taking the helm as chief executive of Starbucks in April 2023.

His track record and eye for detail suggests he will use that time to study every facet of the business, analysts and investors said.

“Narasimhan was seen to have been doing a good job thus far,” Jack Martin, fund manager at Reckitt shareholder Oberon Investments, said, adding that he had “steadied the ship” following a relatively turbulent period under his predecessor.


At Starbuck’s, Narasimhan will oversee a “reinvention” plan, which the company says includes paying better wages for baristas, improving employee welfare and…

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