Starbucks Appoints Former PepsiCo Executive as CEO | Your money

Starbucks has named a longtime PepsiCo executive as its new CEO.

The coffee giant said Thursday that Laxman Narasimhan will join Starbucks on October 1 after moving from London to Seattle, where Starbucks is based.

He will work closely with Starbucks interim CEO Howard Schultz until April 1, when he will assume the role of CEO and join the company’s board of directors.

Schultz said Narasimhan is “in a unique position” to lead the company, with a proven 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 for investing in humanity and our commitment to our partners, customers and communities,” said Schultz in a statement.

Narasimhan, 55, was most recently CEO of Reckitt, a British consumer health, hygiene and nutrition company that makes Lysol cleanser and Enfamil formula, among other products. Reckitt had announced Narasimhan’s surprise departure earlier on Thursday. Reckitt shares fell 5% after the announcement.

Prior to that, Narasimhan held various leadership positions at PepsiCo, including as Global Chief Commercial Officer. He also served as CEO of the company’s operations in Latin America, Europe and Sub-Saharan Africa.

Narasimhan was also a senior partner at consulting firm McKinsey & Co., where he focused on its consumer, retail and technology practices in the United States, Asia and India.

Schultz, a longtime CEO who helped shape Starbucks after buying it in 1987, has come out of retirement and assumed the position of interim CEO 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 office.

Schultz said he had no plans to return, but wanted to help reshape the business after the pandemic, which has upended Starbucks coffee shops and accelerated changes, including a heavier mix of orders at flying.

Narasimhan takes over a company with significant assets. Starbucks record demand reported from April to June, with strong sales in the United States offsetting continued shutdowns in China, the company’s second largest market.

But Starbucks also has challenges. Schultz has been working on a plan to redo store layouts, upgrade equipment and bolster employees, who have emerged from the pandemic feeling harassed and underappreciated. Starbucks announced a $1 billion investment in employee salaries and benefits last fall and added $200 million more for salary, worker training and other benefits in May.

However, the company is facing an unprecedented unionization effort, which he opposes. At least 233 US Starbucks stores have voted to unionize since late last year.

Narasimhan has 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 of the University of Pennsylvania. He also holds a master’s degree in business administration from the Wharton School of the University of Pennsylvania.

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