Starbucks hires Hyatt, Yum Brands vet as CFO

Dive Brief:

Starbucks has tapped hospitality veteran Patrick Grismer as CFO, according to a company release. Grismer's experience includes more than 25 combined years at Hyatt Hotels, Yum Brands and The Walt Disney Company. He will work in tandem with retiring Scott Maw, who will remain a senior consultant through March 2019, before fully assuming his role as CFO and executive vice president on Nov. 30.
Grismer joins the coffee giant in the midst of corporate layoffs and executive restructuring that began in September.
In the company release, CEO Kevin Johnson said Grismer brings “tremendous finance expertise, a customer-centric mindset and a wealth of restaurant industry experience.”

Dive Insight:

Grismer joins Starbucks as same-store sales dipped to their lowest in nine years, according to Bloomberg News. With 28,000 locations worldwide, the coffee behemoth is looking to get back on track through targeted expansion in emerging markets such as China, where the chain expects to triple revenue over the next five years. It will also renew its focus on customer loyalty amid intensifying competition, especially in populous cities.

Grismer's expertise could help the chain broaden its footprint in high-growth areas. While at Hyatt, he helped the hotel chain expand internationally while selling off assets, leading to stock gains of nearly 60% in less than three years. Yum! Brands’ stock stagnated during his four-year tenure, but the popularity of its fast-food restaurants abroad — Yum! operates 43,000 restaurants in 135 countries, including 7,300 locations in China — could help Starbucks navigate rapidly growing Asian markets. By 2022, Starbucks hopes to open 6,000 stores in China.

During his first two years as Starbucks CFO, departing Scott Maw boosted comparable store sales growth and the company consistently exceeded Wall Street estimates. But the coffee chain's performance has declined in the the last five of six quarters under Maw, and Grismer will need overcome a volatile financial market and fickle consumer demands to get back to growth.

For example, growing consumer distrust of sugary beverages have resulted in sluggish sales of its signature frappuccino, despite the company's attempts to revive the menu item with new flavors. The coffee chain will also begin cutting back on limited-edition drinks by 30%, stepping away from its usual onslaught of seasonal and offerings and trend-chasing items such as its Unicorn Frappuccino.

The coffee giant is also fighting a booming McDonald’s, which advertises $2 iced coffees and now sells breakfast all day, and Dunkin’, which recently dropped “donut” from its branding in an effort to highlight its coffee and other menu items. Other fast-casual chains such as Panera and Pret A Manger have also gained ground, while independent roasters further saturate city blocks.

Grismer’s experience in customer loyalty could also boost Starbucks where it has managed to shine. In 2018, 23.4 million customers will use the Starbucks app for an in-store purchase at least once in six months, according to market research firm eMarketer. Only Apple Pay comes close to this level of adoption, with 22 million users. As demand for digital ordering increases, Grismer could blossom into a CFO for a handheld age, drawing on his rounded hospitality background to help the chain move forward.