Help is on the way for the burrito chain.
Taco Bell’s boss will become the new CEO of Chipotle Mexican Grill, the fast-casual restaurant chain announced Tuesday.
Brian Niccol will replace Chipotle founder and CEO Steve Ells, effective March 5.
Ells will serve as executive chairman.
Niccol is coming aboard as the brand is still reeling from a slew of food-safety issues in recent years and criticism the long-awaited queso it added to its menu last year, which fell flat.
Chipotle stock was up $30.27, or 12.04%, to $281.60 in after-hours trading Tuesday
“Brian is a proven world-class executive, who will bring fresh energy and leadership to drive excellence across every aspect of our business,” Ells said in a statement. “His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant.”
Niccol was responsible for turning Taco Bell around when he helmed that division of Yum! Brands, which also has KFC and Pizza Hut. Niccol transformed Taco Bell into a lifestyle brand, amped up the chain’s mobile ordering and payment platform and launched numerous product initiatives, including Taco Bell’s breakfast, according to Chipotle,
“I am very excited to be joining Chipotle at this pivotal time in its history. I have
tremendous respect for the Chipotle brand and its powerful purpose,” Niccol said in a statement. “At Chipotle’s core is delicious food, which I will look to pair up with consistently great customer experiences.”
Niccol joined Taco Bell in 2011 and served as president 2013-2014. Before that, he worked for Pizza Hut in several roles, including vice president of strategy, chief
marketing officer and general manager. He also spent 10 years doing brand management for Procter & Gamble.
In November, Chiptole announced that Ells, who founded the chain in 1993, was stepping down as CEO.
“The board is confident that Brian’s passion and skill set ideally position him to make the bold moves needed to improve operations and take the company to the next level,” Ells said.
The Denver-based chain was battered in 2015 when customers in several states were infected with E. coli. Then, last year saw a norovirus outbreak at one of its Virginia restaurants, rodent sightings temporarily shuttering a Dallas location and reports of sick workers and customers at a Los Angeles Chipotle.
More: After Chipotle’s queso-gate and food safety issues, can a new CEO help?
More: Chipotle is replacing its CEO, founder Steve Ells
The large jump in Chipotle’s stock price shows Wall Street is hopeful about Niccol’s hire.
“You’ve got a guy with tremendous credibility,” said Howard Penney, managing director at Stamford, Conn.-based research firm Hedgeye Risk Management. “He’s young. He brought a youthful vision to Taco Bell. He knows the industry and operations. He’s very creative. That’s what Chipotle needs. This is a great company and a great brand. They needed new blood.”
Niccol has an undergraduate degree from Miami University and an MBA from The
University of Chicago Booth School of Business. Ells is a graduate of the Culinary Institute of America.
According to Tuna Amobi, senior equity analyst at CFRA, it will take time for Chipotle to get completely back on track, but the choice of a new CEO bodes well.
“Attracting the right candidate to fill this role was always a worry for me, because of what the company’s been through,” he said. Someone with “a fairly cushy job at Yum! Brands accepting this challenge provides some semblance of closure. It fills a void in leadership.”
He added that among the challenges Chiptole faces are a sullied food-safety reputation and “anemic” sales at restaurants open at least 13 months, an industry measure that takes a chain’s unit growth into account.
Same-store sales went up 0.9% in the fourth quarter of 2017, Chipotle said earlier this month.
But the turnaround has begun. The chain’s net income jumped $16 million to $43.8 million in the quarter, ending Dec. 31.
Chipotle, which went public in 2006, has 2,400 restaurants.
Lousiville, Ky.-based Yum! Brands announced that with Niccol’s departure, Julie Felss Masino, president of Taco Bell North America, and Liz Williams, president of Taco Bell International, will lead the company in their respective roles and answer to Yum! Brands CEO Greg Creed.
Yum! Brands, which also owns Pizza Hut and KFC, declined to say whether the company will look for a replacement for Niccol’s or retain the new dual-leadership structure permanently.
Yum! Brands stock was $77.78, up 1 cent or 0.01%, in after-hours trading Tuesday.
After an unpopular roll out in September, Chipotle has tweaked its queso recipe and the reviews are in.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer
Read or Share this story: https://usat.ly/2nYOesu