# Incoming Starbucks boss to bring consumer insight to coffee culture
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-02
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Laxman Narasimhan's Transition to Starbucks: A
Meta Description: Former Reckitt CEO Laxman Narasimhan transitions to Starbucks, bringing experience in corporate turnarounds and relationships with major retailers.
URL: https://financedigest.com/incoming-starbucks-boss-to-bring-consumer-insight-to-coffee-culturehtml

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By Richa Naidu

LONDON (Reuters) -Laxman Narasimhan may have no experience of running coffee shops, but the outgoing CEO of British packaged goods group Reckitt will bring insight into the changing habits of consumers when he takes over at Starbucks.

At Reckitt, maker of Strepsils throat lozenges and Dettol floor cleaner, the 55-year old Narasimhan spearheaded a sweeping, but unfinished, corporate turnaround, while honing relationships with retailers ranging from Walmart to Tesco.

When he joins Starbucks in October, Narasimhan will have to adapt his focus to serving the [millions of people who step into the coffee chain’s roughly 32,000 stores](https://www.financedigest.com/sainsburys-pays-524-million-for-full-ownership-of-store-investment-vehicles.html "Sainsbury’s pays 4 million for full ownership of store investment vehicles") every day.

But his background, including a stint of several months as PepsiCo’s [chief commercial officer](https://www.financedigest.com/iris-software-group-names-matt-tuson-as-chief-revenue-officer.html "IRIS Software Group names Matt Tuson as Chief Revenue Officer") in 2019, should ensure a smooth transition to Starbucks, analysts said.

I don’t think he’s had material exposure to direct-to-consumer businesses or in running retail networks,” [Credit Suisse](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout") analyst Eamonn Ferry said.

“He has no direct experience in coffee, so you could question that. However, he does hold a deep understanding of the [consumer and this is far more important,”](https://www.financedigest.com/u-s-inflation-outlook-brightens-as-import-prices-fall-consumer-sentiment-rises.html "U.S. inflation outlook brightens as import prices fall, consumer sentiment rises") Ferry added.

The [world’s biggest](https://www.financedigest.com/biggest-economy-in-the-world.html "Biggest Economy in the World") coffee chain is reworking its business model from a focus on cafes to mobile pickup and delivery, while facing higher costs for ingredients and labour.

Seattle-based [Starbucks also faces a labour](https://www.financedigest.com/norway-wealth-fund-to-vote-for-labour-rights-motion-at-starbucks-agm.html "Norway wealth fund to vote for labour rights motion at Starbucks AGM") union drive, with more than 200 of its U.S. [stores having unionized in the past year and staff pushing for improved benefits](https://www.financedigest.com/the-benefits-of-developing-online-stores-through-shopify.html "The Benefits of Developing Online Stores Through Shopify") and wages.

Narasimhan, who also spent nearly two decades at consultancy and well-known turnaround firm McKinsey & Co, will have six months after [joining to get to grips with the business](https://www.financedigest.com/dan-hodgson-joins-verasity-as-director-of-business-development.html "Dan Hodgson joins Verasity as Director of Business Development") before taking the helm as chief executive of Starbucks in April 2023.

His [track record and eye for detail suggests he will use that time to study every facet of the business](https://www.financedigest.com/5-fx-metrics-your-business-should-be-tracking.html "5 FX METRICS YOUR BUSINESS SHOULD BE TRACKING"), analysts and investors said.

Narasimhan was seen to have been doing a good job thus far,” Jack Martin, [fund manager at Reckitt shareholder](https://www.financedigest.com/intercos-fund-shareholders-l-catterton-otpp-sell-6-stake-at-7-discount.html "Intercos fund shareholders L Catterton, OTPP sell 6% stake at 7% discount") Oberon Investments, said, adding that he had “steadied the ship” following a relatively turbulent period under his predecessor.

REJUVENATION TO REINVENTION

At Starbuck’s, Narasimhan will oversee a “reinvention” plan, which the company says includes paying better wages for baristas, improving employee welfare and [customer experience](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience") and re-imagining stores.

His record at Reckitt suggests he is prepared to take painful decisions early.

Soon after becoming Reckitt CEO in 2019, he commissioned a strategic review, vowing to [spend 2 billion](https://www.financedigest.com/chipmaker-infineon-ready-to-spend-billions-on-acquisitions-ceo.html "Chipmaker Infineon ready to spend billions on acquisitions – CEO") pounds ($2.3 billion) over three years to “rejuvenate” it.

[Early in the plan](https://www.financedigest.com/are-the-over-55s-accessing-their-pensions-early-failing-to-plan-for-later-life.html "Are the over-55s accessing their pensions early failing to plan for later life?"), Reckitt took a hit to margins to fund new investments and refocus on hygiene, health and nutrition brands. That approach eventually [proved popular](https://www.financedigest.com/west-drayton-proves-popular-alternative-with-those-priced-out-of-london-market.html "West Drayton Proves Popular Alternative With Those Priced Out Of London Market") with shareholders.

Under Laxman, Reckitt has a newfound confidence – [investors seem to be convinced](https://www.financedigest.com/cryptocurrencies-yet-to-convince-the-savvy-investor.html "Cryptocurrencies yet to convince the savvy investor") that everything is going in the right direction,” Bernstein analyst Bruno Monteyne said.

“He radiates – oozes – confidence,” Monteyne added.

For Reckitt, Narasimhan’s [exit leaves a big](https://www.financedigest.com/at-europes-big-banks-women-make-some-gains-despite-rose-exit.html "At Europe’s big banks, women make some gains despite Rose exit") hole.

For now, longtime Reckitt [board member and former](https://www.financedigest.com/shareholder-group-iss-backs-barclays-board-over-former-ceo-staley.html "Shareholder group ISS backs Barclays board over former CEO Staley") British American Tobacco (BAT) chief Nicandro Durante will lead the maker of Lysol surface cleaner and Durex condoms.

When Laxman made his intention clear…they thought moving quickly was best,” said Patricia O’Hayer, Reckitt’s [global head](https://www.financedigest.com/new-york-catches-up-with-london-to-head-citys-global-centres-survey.html "New York catches up with London to head City’s global centres survey") of communications and government affairs. She noted that Durante steered BAT, a bigger company, through its own transformation.

($1 = 0.8654 pounds)

(Reporting by Richa Naidu; Editing by Matt Scuffham, Nick Zieminski, Alexander Smith and Louise Heavens)


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