Raise your Apple Crisp Oat Milk Macchiatos in a toast, Starbucks fans.
Starbucks is welcoming a new CEO two weeks ahead of schedule. Laxman Narasimhan will unseat the coffee chain’s founder and three-time CEO Howard Schultz, who returned to the company last year—earning a $1 salary—to help right the ship and mentor his successor.
- Narasimhan has spent the last five months integrating himself into the company, learning how stores operate, and even earning a barista certification.
Catch-up: Schultz had kicked off revamp plans last spring, committing US$450 million to modernize locations. This includes new barista-ing technology to increase efficiency and more drive-thru-only cafes and digital ordering options to cater to on-the-go customers.
Why it’s happening: Starbucks is taking a hard look in the mirror as a global economic slowdown, high coffee prices, and upset baristas weigh on the company. Shares slumped harder than this writer after a mid-day caffeine crash, dropping 15% last year alone.
- Narasimhan’s first order of business will be trying to beat back the unionization push happening at locations across the US and, increasingly, in Canada.
Bottom line: After finishing 2022 strong as consumers slurped up more pricey cold drinks (which will soon be easier to make thanks to new tech), Narasimhan is expected to keep up the momentum. We’ll get a clearer picture of what’s next after Thursday’s earnings call.