Starbucks Names Ex-PepsiCo Exec Laxman Narasimhan as CEO

Starbucks’ new CEO will be consumer products executive Laxman Narasimhan, previously CEO of the maker of Lysol, The Wall Street Journal (WSJ) wrote.

Narasimhan, 55, has been CEO of U.K.-based Reckitt Benckiser Group for the last three years. He said he was stepping down from that job as of Sept. 30 this year.

He’ll take the place of temporary CEO Howard Schultz, the ex-head of the coffee giant, who took over when previous CEO Kevin Johnson stepped down in March.

Narasimhan has also worked in leadership roles with PepsiCo Inc, which has had a longstanding relationship with Starbucks, through the chain’s ready-to-drink coffee. That relationship included a deal struck when Narasimhan was CEO of PepsiCo Latin America.

Schultz had taken back over the leadership role because of his perception that the company had made mistakes and “needs to change.” One of the issues he wanted to try and change included how baristas were paid.

Starbucks board chairwoman Mellody Hobson said Narasimhan would be independent, but Schultz would still play a “special role” at the company. She said Schultz has a “a deep knowledge of the business in ways none of us has and we want that.”

Starbucks has seen economic troubles like many companies, but its loyalty members have given it some relief, PYMNTS wrote.

Read more: Starbucks Invests in New Rewards as Loyalty Members Help Inflation-Proof the Brand

The company said loyalty program 90-day active membership in the U.S. was up 13% in the quarter, to 27.4 million members.

Schultz told analysts at the time that the rewards program members had driven a record 53% of U.S. company-operated revenue.

PYMNTS data from its study “Digital Divide: The Move to the Metaverse,” done in partnership with Paytronix, had shown previously that 37% of customers were interested in using loyalty and rewards programs to make restaurant purchases.

Schultz said there wasn’t any big reduction in customer spending or evidence of trading down, which showed loyalty to the company even as many people had cut their spending.