From Guac to Latte!

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FAST CASUAL
Trading Beans for… Beans

Brian Niccol, the mastermind behind Chipotle’s remarkable turnaround, is leaving his burritos and guac behind as he takes on a venti-sized challenge at Starbucks.

The news, which broke on Tuesday, has everyone talking about America’s favorite biggest coffee chain (😬 sorry, Dunkin!) — investors, industry insiders, and yes, even that girl you sat next to in your Tuesday/Thursday humanities lecture.

A Rather Shocking Departure

After six successful years at Chipotle, Niccol will step into the role of CEO and executive chairman at Starbucks on September 9. This transition comes after Laxman Narasimhan’s rocky 16-month tenure, marked by declining sales, a lagging share price, and that whole thing where he said he doesn’t work past 6:00pm (Fortune). The news of Niccol’s appointment sent Starbucks’ stock soaring 24.5% in a single day, erasing its year-to-date losses. Meanwhile, Chipotle’s stock took a 7.5% hit.

The Chipotle Legacy

Niccol’s time at Chipotle is defined by more than just debate-worthy portion sizes, which is likely why most of you know Brian by name. When he took over in 2018, Chipotle was reeling from a damaging E. coli outbreak. Niccol flipped the script, turning Chipotle into a digital ordering powerhouse long before the pandemic made it cool. By the time he stepped down, Chipotle’s market value had exploded from $8.9 billion to a staggering $76.5 billion.

Watch: Inside Starbucks’s New CEO’s Daily Routine While He Was Running Chipotle, (YouTube) 👀

The Road Ahead for Starbucks

Now, Niccol faces the daunting task of leading Starbucks, the world’s largest coffee chain. The chain's been battling declining sales both stateside and abroad, with China's numbers looking particularly bitter. To make matters worse, Starbucks’ share price took a 22% dive during Narasimhan’s short tenure, a stark contrast to broader market gains. Ooch!

Despite these challenges, Niccol’s track record has sparked hope. With Elliott Management, an activist investor firm, breathing down Starbucks' neck, many believe Niccol’s expertise in brand revitalization could work wonders at Starbucks. His knack for digital transformation and strategic leadership is expected to help turn things around.

Niccol’s Starbucks Pay Package

As Niccol transitions from burritos to beans, Starbucks is betting big on his success. His new compensation package includes a $1.6 million annual base salary and a $10 million cash signing bonus. On top of that, he’ll receive equity grants worth quity grants totaling a whopping $98 million, compensating him for giving up his Chipotle shares (CNBC). The deal is a considerable step up from his previous compensation at Chipotle, where he earned $22.5 million in 2023.

But hey, when you've doubled sales and tripled stock value in five years, you've earned a sweet treat, right?

Oh, and the best part? Niccol won’t be relocating to Starbucks’ Seattle headquarters. They’re building him an office in Newport Beach, California. And, of course, they’ll be footing the bill for his travel and accommodations when he needs to meet with the team in Seattle.

The food and beverage world is watching closely. If Niccol can work his magic at Starbucks, he might just set a new standard for leadership.

🥑 Pssst!! Chipotle, we want free guac!

SNACK FOOD ACQUISITION
Mars Takes a Colossal Bite

Mars is about to shake up the snack aisle in a major way.

🍿 Get your popcorn ready! Mars has announced its acquisition of Kellanova, the powerhouse behind Pringles and Cheez-Its, in a whopping $35.9 billion deal (Mars). For context, that’s one of the year’s biggest M&A deals, period.

Kellanova raked in $13 billion in sales last year. The company’s snack-heavy lineup aligns well with Mars’s expanding grocery footprint but isn’t expected to raise significant antitrust concerns.

Mars, traditionally known for its chocolate confections, has been on a mission to diversify its portfolio for years. With purchases of Dove ice cream, Wrigley chewing gum, and, more recently, healthier snack brands like Kind, Mars has been slowly but surely conquering every aisle of the grocery store. This Kellanova deal? It's a strategic move to bolster its presence in the savory snack sector — like Mars just hit the savory snack jackpot.

Despite the excitement, the scale of the deal means it could face regulatory scrutiny. Analysts anticipate that regulators may flag the merger due to its size, and Kellanova has indicated that it expects hopes the deal to close by early 2025.

As consumer sensitivity to high prices continues to influence buying behavior, we may see more consolidation in the snack industry as major players strive to stay competitive. Mars’s bold acquisition of Kellanova could be a defining moment in this evolving landscape, reshaping how snacks are positioned on store shelves and potentially setting the stage for further industry shifts.

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LISTEN
🎙 Dave’s Hot Chicken: Arman Oganesyan

How I Built This with Guy Raz

Dave’s Hot Chicken began as a tiny pop-up, selling spicy chicken tenders and fries from a tent in East Hollywood. Their homemade take on Nashville Hot Chicken was an overnight sensation in a city that had barely heard of it, and within days, co-founder Arman Oganesyan and his partners were working frantically to serve the long lines out front. Since launching seven years ago, the pop-up has grown into a chain of 200 stores, with franchises across the country, and a beloved rubber chicken mascot.

Listen: Apple Podcasts, Spotify 🎧

OTHER
Self-Checkout

• Ace Hardware is rolling out a new experiential store concept to put popular brands, such as Craftsman and DeWalt at the forefront of its merchandising.

• Olipop launches new Ridge Rush flavor, a new shelf-stable version of their most popular flavors, and becomes the first-ever Official Functional Beverage partner of the Los Angeles Clippers and their new Intuit Dome.

• Wally Amos, the creator of Famous Amos cookies, passed away at the age of 88. Have a cookie for Amos today.

• Liquid Death and Van Leeuwen Ice Cream have partnered to release a hot fudge sundae-flavored sparkling water on Amazon and Van Leeuwen’s Scoop Shops.

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