Starbucks Brews Bold Move by Poaching Chipotle CEO to Percolate Business
Guacamole with your frappuccino? It’ll now cost extra. Yesterday, Starbucks announced they’ve poached Chipotle’s CEO Brian Niccol to lead turnaround efforts. The announcement shook both stocks, sending dropping ~10% and rising ~25%. Shareholders have high expectations, banking on Niccol’s “proven track record” to revive the downtrodden coffee behemoth.
- During Niccol’s transformative six-year stint at Chipotle, he doubled the company’s revenue, increased profits sevenfold, and pumped the stock 800% — all while improving employee wages and benefits.
- Meanwhile, Starbucks has struggled with softening demand in the US and China — plummeting the stock by 21% under the existing CEO’s tenure (before yesterday’s announcement).
Change is brewing: As activist pressure mounts, Starbucks’ former Board Chair touted Niccol as having “been there done that — through all sorts of market environments, all sorts of cycles” (CNBC). Leveraging his Chipotle playbook, Niccol could enhance Starbucks’ mobile ordering system — a growth driver for but a performance scapegoat for. Additionally, his track record of menu innovation could spark renewed interest with new, exciting offerings. The coming months will reveal whether this bold move will percolate success or leave a bitter aftertaste.
