Brian Niccol Reveals the Next Era of Starbucks

Ahead of Starbucks’ Q3 earnings call in July, CEO Brian Niccol’s grande Americano (with an extra shot) arrived with a message scrawled in Sharpie: “You got this.” The baristas near the company’s Seattle headquarters naturally know his name, but every now and then he gets a note, a gesture that skeptics might consider a nice touch for the big boss. “But I don’t think so,” Niccol told ADWEEK. Niccol has a history of successful turnarounds. He instead views it as a small sign that Back to Starbucks, the plan he launched in 2024 to restore the coffeehouse experience and get customers to return, is working. After 1,000 store refurbs, a leaner menu, a revamped loyalty program, a marketing reset, and more than $500 million spent on smarter shift scheduling and putting more staff on shop floors during peak hours, Niccol wrote an open letter to employees in September. “Starbucks is back,” he declared. “Now we raise the bar.” He had reason to be jubilant. Starbucks had just reported its fourth consecutive quarter of growth, with global comparable sales up 7.9%. While total revenue slipped 1% to $9.3 billion, after selling most of its China business, Starbucks stock is up 30% since Niccol joined, and it has raised its 2026 forecast. If his bet plays out, Starbucks’ next chapter will solidify its status as the so-called third place: “Somewhere you can be with your community, with friends,” he said. “It’s durable, sustaining, and highly human.” Of course, those who come in also need to spend more. During a January investor day, Niccol said he anticipates Starbucks can boost sales by at least 3% annually at its existing stores over the next three years. Standing in the way of that goal is a roster of aggressive competitors, each with a different thesis about how to sell coffee. Dunkin’ keeps expanding. 7 Brew and Dutch Bros are growing fast on convenience. Boutique brands Blue Bottle and Blank Street are chasing younger, premium customers. By contrast, Niccol’s vision for Starbucks is rooted in its ’90s heyday. Back then, he and his wife made a ritual of sitting in their then-local Cincinnati Starbucks, served by a barista who knew them as regulars. Having laid the foundation for a revival, the CEO now has to prove Starbucks can scale that feeling and drive growth for investors at the same time. “You’ve got to pivot on the way customers want to interact with your brand, but it can’t be at the expense of what truly defines Starbucks,” Niccol said. Niccol’s vision for a warmer, more welcoming Starbucks was rooted in its ’90s heyday. Back to Starbucks Niccol has a history of successful turnarounds. Sales at Taco Bell grew from $8.5 billion to $10 billion during his 2015-2018 tenure as CEO. His time leading Chipotle from 2018 to 2024 was also a business success, with revenue growing from about $5 billion to nearly $10 billion in 2023, his last full year. When he arrived at Starbucks in September 2024, the company had cycled through four CEOs in just over two years, and sales were declining. Niccol's pay package, valued at about $96 million for his first four months (largely to offset forfeited Chipotle shares), and his use of the company jet to commute from California to Seattle stoked criticism. But he would soon defy skeptics. Prior to starting, Niccol spent a month touring U.S. stores and speaking to employees. By then, the business had changed. Mobile and to-go ordering had turned interactions into fleeting moments, while customization options—former CEO Howard Schultz (who did not respond to a request for comment for this feature) claimed there were 100,000 variations of hot, iced, and blended drinks at one point—made it difficult for staff to keep up. The brand had become more transactional than the one Niccol felt nostalgic for. Getting back to it would require a different approach than the traditional QSR playbook of efficiency and cost-cutting that worked at Taco Bell and Chipotle. His rewrite for Starbucks (announced on his second day) was, he acknowledged, “a little bit counterintuitive” and based on delivering a premium experience: courtesies like handwriting on cups; amenities like comfortable seating, more power outlets, and free coffee refills; waiving charges for alternative milks; and more employees offering friendly, timely service. Along with rising coffee and tariff costs, that labor spend has eaten into operating margins, which have expanded for two straight quarters but were expected to land just above 11% in fiscal 2026, well short of the roughly 16% Starbucks hit in 2023. Starbucks' Q4 results, due Oct. 29, will show if the gap is closing. It’s a cost Niccol is willing to pay to become the “defining customer service brand,” which will get people to stay longer and order more. In total over 1,500 cafes are set to undergo the more inviting redesign by the end of fiscal 2026. Over half of Starbucks’ U.S. sales (roughly $12 billion annually) happen before 11 a.m. If those customers linger, Niccol can build a second post-2 p.m. peak, bolstered by cold drinks like Refreshers and matchas. When he first initiated Back to Starbucks, critics said customers just wanted the convenience of a drive-thru coffee pitstop, without the “kindness” he wanted to infuse into the brand again. Niccol didn’t buy it. “People ultimately value the totality of the experience,” he said. Habits may be shifting his way: 55% of U.S. adults made a drive-thru coffee purchase this summer, down from 59% a year earlier, according to a National Coffee Association survey. Niccol isn’t against the drive-thru, which generates almost $10 billion a year for Starbucks in the U.S. but he wants to make it more hospitable. He’s tossing around some ideas: swapping windows for sliding doors so baristas can walk out with coffees, or having order counters that can serve up personalized greetings. The Back to Starbucks strategy challenges assumptions that convenience has made the old coffeehouse experience obsolete, according to David Palmer, senior managing director at equity research firm Evercore ISI, who has recommended Starbucks stock to investors since Niccol’s hiring was announced. Palmer noted how chains like Chick-fil-A and McDonald’s were investing in customer service, with the latter retraining 2 million staff globally in face-to-face hospitality after years of investing in digital kiosks. Niccol is skeptical that the move will work for rivals. “I’m not sure it’s in their brand promise to do it,” he said. “It is in ours.” Back to Starbucks included putting more baristas on the floor during peak hours and bringing back writing on cups. Refocusing the business Upholding the Starbucks brand promise doesn’t come without casualties or, in business parlance, tough decisions. Starbucks is chasing $2 billion in cost savings by 2028. It closed 627 stores in 2025 and another 250 in September, and has cut around 2,000 white-collar jobs since early 2025. Niccol previously said a leaner corporate structure would help Starbucks "operate more efficiently." Meanwhile, it remains locked in an unresolved dispute with its unionized employees. Niccol told investors last autumn that the store closures give Starbucks a better base to build toward its new customer-centric ethos. The shuttered cafes lacked a path to profitability and didn’t provide the “warm, welcoming” experience he wanted for Starbucks. By the end of the 2026 fiscal year, the chain expected to open around 440 net new coffeehouses globally, down from its prior target of 600 to 650. Those cuts have also given Niccol the leeway to make investments in the areas needed to help Starbucks grow: staffing, tech, and of course marketing. Under him, Starbucks’ advertising spend jumped to $869 million in 2025, up 46% from $597 million the year before. “I’m not going to hold back our ability to invest in it,” he said. Over the last year, Starbucks’ marketing has sought to get people back into the coffeehouse by reclaiming its place in culture, from appearing in The Devil Wears Prada 2 to sending fans into a frenzy with merch drops like its Bearista cup. Product innovation has been high on the agenda too. This summer’s three-day return of the Unicorn Frappuccino, a blue and pink mango-flavored drink mined from the 2017 time capsule, marked the chain’s highest Saturday sales day ever in the U.S. and Canada, with more than 2 million sold over the weekend. And in September, Starbucks released the Aerocano, an aerated chilled espresso that is driving a lot of buzz, launching in South Korean stores before coming to North America on National Coffee Day. Leading the marketing efforts is Tressie Lieberman, who came on board as chief brand officer in November 2024, having spent decades working with Niccol at Pizza Hut, Taco Bell, and Chipotle. That familiarity means she doesn’t have to ask permission to execute. Where the CEO-CMO dynamic can be fraught, theirs is a “gift,” Lieberman told ADWEEK. “We have that inherent trust, and the shared mindset to take some big swings and go for it,” she said. “It helps drive transformation quickly.” As Starbucks chases speed and virality, Niccol is conscientious of executing without sacrificing operations. For instance, the initial launch of the Unicorn Frappuccino nine years ago was “chaotic,” Niccol said. “We ran out. It did not go well,” he revealed. “When I spoke to people who were around for it, they thought the idea was exciting but said the previous execution was brutal.” Before this summer’s limited-time relaunch, Starbucks asked employees how it could avoid disorder this time around. They suggested limiting customization, offering only one size, and pre-mixing the drinks—saving them from toying with syrups and powders. The suggestions worked. “That showed we can drive business, and do it in a way where it’s easy,” Niccol said. If Niccol's bet plays out, Starbucks’ next chapter will solidify its status as the so-called third place. Move fast, brew things Tech investment has always been a hallmark of a Niccol turnaround. But how that plays out in a company betting on human connection to drive foot traffic is different from Taco Bell and Chipotle, where the focus was on innovating during the early days of digital ordering. At Starbucks, Niccol likes to keep the tech mostly out of sight, making sure staff stay visible. For instance, Green Dot Assist, an AI-powered assistant, is being rolled out in coffeehouses to answer baristas’ work-related questions. For consumers, its app is currently the strongest link between its digital and physical experiences. It’s home to the Starbucks Rewards, which has 35.8 million active members, who drive nearly 60% of U.S. company-operated revenues. Lieberman said the recently revamped loyalty program—which now puts customers into tiers based on their spending—is only the beginning of a more personalized experience. Starbucks has also invested in taking cues from newer digital channels, including testing a ChatGPT integration that lets customers order a drink that fits their mood. Those signals are also leading to product innovation. Lieberman said Starbucks' marketing team now listens closely on social to spot when fan-created menu hacks, like the Cookies on Top Cold Brew, start gaining traction. The team can spotlight the drink in the app's Trending section, and when customers order it, the recipe prints on the cup label for the barista. If the drink gains enough traction, it graduates to the main menu, as the Iced Dubai Chocolate Mocha did last year. “We’re always listening. Our team has become wildly curious and obsessed with the customer,” Lieberman said, adding that she’s always “in the comments” looking for ideas. Niccol has one ear to the ground too, replying to customers’ emails whether they’re about cafes or a barista remembering a pet’s name for a Pup Cup. When he first arrived, there was a lot of “constructive” feedback in his inbox. Now it’s more positive. The work isn’t done, Niccol said. But pivots take time, especially when changes are being rolled out across 40,000 locations. “I probably underestimated the scale of the business that Starbucks is,” he said. “I wish we were going a little bit faster with digital. I wish we were going a little bit faster with the menu,” he added. “But culturally, we are so much better because we’re now focused on owning outcomes, not celebrating activity.”

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Brian Niccol Reveals the Next Era of Starbucks

The CEO's turnaround strategy is working. But the biggest test lies ahead

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Rebecca Stewart

Brand Marketing

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