Brian Niccol

Brian Niccol has begun brewing a new refreshing beverage to revive Starbucks. Early last month, Mr Niccol took over as the CEO of the battered US coffee chain, replacing Laxman Narasimhan. The choice of Mr Niccol seems to be appropriate, given his previous excellent track record of reviving Chipotle Mexican Grill, which he headed until recently.

Mr Niccol, who has an engineering degree from Miami University, had joined Chipotle Mexican Grill in 2018 from Taco Bell and helped the company overcome salmonella and E.coli outbreaks at several outlets. He is only the sixth CEO of Starbucks over its 50-plus-year history, with founder Howard Schultz leading the company for 23 years in three separate stints.

Mr Niccol, who also has an MBA degree from University of Chicago Booth School of Business, has been hired on terms that are highly favourable to him. The 50-year-old chief executive has been offered roughly $113 million in total compensation, including a $10-million sign-on bonus and a $75-million equity grant. That lucrative pay is on top of Mr Niccol’s annual $1.6-million salary and an annual cash bonus, ranging from $3.6 million to $7.2 million, depending on his performance.

Much of Mr Niccol’s compensation from Starbucks is intended to replace the pay he is leaving behind at Chipotle, the burrito-bowl restaurant empire he has led for the past six years. At Chipotle, Mr Niccol drove the company’s stock price growth of 800 per cent and saw its profits increase nearly sevenfold. The coffee chain is hoping that Mr Niccol can bring the same growth to struggling Starbucks.

The Starbucks chief has spent a greater part of his executive career in the food industry. Before his six-year stint at Chipotle since 2018, Mr Niccol was at Taco Bell from 2011 to early 2018, where he held roles such as chief marketing and innovation officer, president and CEO. There, he introduced new menu items, sold off stores to franchisees and focused on digital efforts like mobile ordering, an approach he later carried over to Chipotle. Before Taco Bell, he had served in various executive positions at Pizza Hut between 2005 and 2011. His career had begun with a decade at Procter & Gamble.

The new Starbucks chief inherits several challenges at the coffee giant. The Seattle, Washington-based beverages company has been under pressure from activist investor Elliott Investment Management to improve its business. It has also been suffering from increased competition and weakening demand in the United States and China.

Starbucks has recently tweaked its model to focus on mobile pickup and delivery orders rather than cafes set up for long visits. With Mr Niccol at the helm, Starbucks would soon perhaps see many more new and necessary changes. Mr Niccol’s rich experience in the food industry for so many years may bring the sweet aroma of success back at Starbucks.