Starbucks says Narasimhan is ‘uniquely prepared’ to lead its next phase of growth as the world's largest coffee chain seeks to reach 50,000 stores globally and achieve its ambitious sustainability goals by 2030
Narasimhan earned his barista certification after completing Starbucks’ four-week training programme | Photo credit: Starbucks
Laxman Narasimhan has assumed the role of Starbucks CEO two weeks earlier than originally planned.
Narasimhan, who was named as incoming CEO in September 2022, said he was ‘humbled’ to officially step into the leadership position and will kickstart his tenure by leading Starbucks’ Annual Shareholder Meeting on 23 March 2023.
Since joining Starbucks last year, the former CEO of UK-based health and hygiene company Reckitt Benckiser has visited 30 Starbucks stores, manufacturing plants and support centres globally. He has also become a certified barista after completing the coffee chain’s four-week training programme.
Mellody Hobson, Chair of the Independent Starbucks Board of Directors, said Narasimhan’s ‘intensive immersion into the business’ has ‘uniquely prepared him to lead Starbucks into its next phase of growth’.
Narasimhan’s priorities will include fulfilling the coffee chain’s goal of reaching 50,000 stores globally by 2030, driven by expansion in its key growth market, China, where it faces increasing competition from a resurgent Luckin Coffee, alongside realising Starbucks’ ambitious 2030 sustainability targets.
In its flagship US market, Narasimhan will oversee the modernisation of its approximately 16,000 outlets and the development of convenience store formats, such as drive-thru, delivery and pickup.
He will also need to navigate a small but growing unionisation movement in the US.
Narasimhan succeeds Howard Schultz, who is stepping down from his role as Starbucks Interim CEO after returning to the coffee chain in April 2022.
In September 2022, Schultz began implementing the coffee chain’s ‘Reinvention Strategy' to improve in-store efficiency and lower employee turnover rates.
The strategy’s key pledges include improving working conditions for staff, implementing the company’s ambitious sustainability goals and driving innovation in customer experience.
Following a formative trip to Milan in 1983, Schultz was instrumental in pioneering Italian café culture and espresso in the US while popularising second wave café culture and ‘third-place’ coffee shop experiences.
He first took on the role of Starbucks CEO in 1987 and stepped down in 2000, when the coffee chain operated 2,500 stores globally. He returned to the helm as CEO in 2008 as the company navigated the financial crisis before Kevin Johnson took up the post in 2017.
“The board wants to express our sincerest thanks to our founder, Howard Schultz, for selflessly picking up the leadership mantle when asked – forgoing compensation and putting aside his own pursuits – for the love of our company and its partners. We would not be where we are without him,” said Hobson added.
Starbucks’ full-year 2022 revenues grew 11% to reach $32.25bn. In March 2023, Starbucks reiterated its full-year 2023 targets of 11% revenue growth and 7% outlet growth globally.