WE ARE ENERGY THAT MOBILIZES PARTNERS....In this chapter
We inspire best practices in all links of the production chain. The goal is to guarantee the excellence of operations and increase, with each harvest, our value proposition to partners, customers and consumers.
... Sugarcane producers...
About 3,000 sugarcane suppliers account for almost half of our crushing volume. We work in partnership with this audience for the development of the properties and traceability of the raw material we acquire.
Cultivar, our value proposition for partner sugarcane producers, was created in the 2013/2014 harvest to strengthen relationships and build loyalty. To this end, the program had two initiatives: the Input Purchasing Pool, a tool in which we use our power of negotiation with input supply companies, on the strength of the large volume purchased for our own areas, to negotiate better commercial terms for the program's partner producers, adding their purchase volume to ours; and Crédito Rural, which consists of a partnership with financial institutions in which we act as guarantor for the operation, obtaining more attractive rates than those set by the market.
Over time the program has evolved and, together with our partners, we have built a more comprehensive portfolio, with agronomic and management initiatives that meet the main challenges of producers: cost reduction, increased productivity, cash and management solutions, and business growth and sustainability.
Every year we also hold the Cultivar Event, now in its fourth edition In 2019, this event brought together sugarcane producers, companies, and entities in the sector to discuss relevant topics, foster business, and recognize the best performance in crop productivity.
Formally created in 2014, in partnership with Solidaridad12 and Imaflora13, the ELO Program is unique in the global sugarcane production chain. It aims to promote the sustainable development of our suppliers by engaging them in progressively adopting measures that encourage and support economic sustainability and respect for the environment and human and labor rights. The initiative seeks to meet the following challenges:
- Continuous improvement of our sugarcane suppliers, addressing the improvement of economic, environmental, and social management techniques
- Ensure sustainable sugarcane supply, considering legal and regulatory requirements as well as best practices
- Economic, environmental, and social sustainability, recognizing that sustainability is a key factor for business success
- Market trend, anticipating requirements for a sustainable supply chain
- Risk reduction, addressing business continuity
The ELO structure was designed to support suppliers based on criteria that address the three pillars of sustainability: Environmental, Social, and Economic. In addition to promoting the continuous improvement of its participants, ELO is a program that is also constantly improving. Since its inception, learning has been absorbed by our teams and our partners, making the program increasingly robust.
Currently, the initiative covers 94% of the volume purchased from third parties, almost all sugarcane suppliers. This proportion shows inclusion as a priority factor, regardless of the volume delivered or the size of the properties, which range from less than ten to more than 1,000 hectares. This is because, as noted at the beginning of the program, the smaller the production system, the greater the challenges.
As a result, over the last five harvests, we can highlight initiatives dedicated to the implementation of best labor practices—still a major challenge for many producers—such as improvement in working conditions. An example is the increase in the number of properties that now have leisure and rest facilities for rural workers: 211 producers started offering this benefit in the last year of the program. Some of these areas were acquired by suppliers at more affordable prices, since they were previously ours.
From an environmental standpoint, ELO seeks to disseminate best practices for preservation, which includes proper handling of agrochemicals, correct disposal of the packaging of these products, and best management of solid waste, in order to avoid soil contamination and improve water quality. In the last year, 121 suppliers have stopped using agrochemical packaging. Another milestone was the fact that 100% of the program's members adopted measures to avoid contamination of water resources, such as not washing agrochemical packaging in waterways.
From an economic standpoint, the main impact is increased potential to obtain access to rural credit, since part of the risk analysis made by the financial institutions considers compliance with the legislation applicable to the activity, a topic that is widely covered by ELO.
In 2019, a case study on the ELO Program was considered to form an online repository that is published on the website of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), resulting from a public call for proposals to gather examples of Big Push for Sustainability, an approach developed by the institution.
12 International non-profit organization with more than 50 years of experience and operations in more than 40 countries in the development of socially inclusive, environmentally responsible, and economically profitable value chains in the fields of agriculture and artisanal mining. In Brazil, Solidaridad focuses on the sustainability of eight commodity chains, including sugarcane, contributing to food and climate security.
13 Brazilian organization that works to promote transformation in the forestry and agricultural sectors. Since 1995, the entity has been working on the development and implementation of innovative solutions for production chains and stimulated the development of sustainable businesses, demonstrating that it is possible to promote conservation and sustainable use of natural resources, generate social benefits, and reduce Greenhouse Gas (GHG) emissions.
We employ truck drivers for sugarcane and road transport. The relationship with this audience is guided by excellence and safety in operations.
In the sugarcane transport operation, more than 2,500 drivers compete in the Conduzir Program which, in its third edition, evaluated them based on safe driving and economic driving indicators. The individual profile of the drivers is outlined from a 24-hour monitoring cell. It is then monitored and developed in synergy with the managers and leadership of each unit. The top 15 drivers are awarded monthly and recognized at the end of each crop year.
In addition to the Conduzir Program, the Corporate Transport team is responsible for the TransMOV Program, which evaluates the carriers of the sugarcane operation based on performance and HSE indicators in semiannual audits. In all, there are 695 trucks, divided into six carriers, in addition to the Araraquara hub's own transport.
In distribution of fuels, sugar, and pellets in road transport, we rely on more than 4,000 trucks from 41 partner carriers, whose performance is monitored by HSE indicators, Service Level, and Productivity.
Based on these evaluations, we choose the best transport companies and branch managers, who are recognized annually at an event that brings together the Logistics Leadership and the Transport team, in addition to businessmen and executives of the carriers.
Another highlight of the motivational safety program in the road transport operation is the Truck Rodeo. In the last crop year, the ninth edition of the program engaged approximately 200 truck drivers with the best road safety indicators, most notably Zero Accident. Due to the pandemic, the final awards ceremony of the last edition for ranking the best drivers in Brazil was broadcast live online, with the participation of the organizers and announcement of the winners.
In partnership with Fundação Adolpho Bósio de Educação em Transporte (FABET), a non-profit institution whose goal is to train drivers and provide various training courses for defensive driving and economic driving, among others, we developed projects such as:
- Eco+: Over 700 trained drivers focused on improving the energy efficiency of the contracted fleet, while working on EHS aspects.
- Monitor Drivers: We conduct refresher courses for all monitor drivers of the contracted carriers. This is a comprehensive training course that should provide significant gains in safety and productivity for the operation.
- Property Security Workshop: Event that was attended by our property security team and involved law enforcement and carriers sharing experiences in cargo theft prevention.
The fleet at our service is monitored remotely 24/7 in order to determine distance traveled, vehicle speed, and sudden braking and accelerations, along with other information. Technological resources allow us to intervene in order to correct irregular behaviors.
We carry out annual inspections on contracted carriers with a focus on HSE. Only those with a performance higher than 85% can operate on our team. Based on these assessments, action plans are prepared, which are then monitored by our team of advisors and reviewed managerially by the EHS Committee of the Logistics Department. In addition, the team of advisors makes regular visits to the carriers' offices to monitor the evolution in management of HSE, Service Level, and Productivity topics.
We also developed actions under the Na Mão Certa Program, an initiative by Childhood Brasil, to which we subscribe, that brings together several companies through adherence to the Business Pact Against the Sexual Exploitation of Children and Adolescents on Brazilian Highways. The main objective of the pact is to protect children and youth through a comprehensive joint effort to end this serious violation of human rights.
Our fuel distribution network includes more than 6,500 service stations in Brazil and approximately 730 in Argentina. In order to carry the Shell brand, these operations undergo careful selection, which includes commercial feasibility studies and compliance with environmental aspects. Those approved also receive our Service Station Operation Guide, which describes the procedures to be adopted in daily activities.
We seek to develop this audience through consulting and training under the Oferta Integrada (Integrated Offer) program. Participation is voluntary; even so, 59% of eligible service stations are participating in the initiative, a percentage that grows with each harvest as a result of the continuous improvements in our value proposition.
Partnerships and Shell Box
In 2019/2020, for example, we strengthened the service offer for service stations through partnerships with Getnet and Santander. The package includes opportunities in the area of cards for financial products demanded by the fuel segment. Among the benefits to dealers, the technologies enable lower rates for obtaining card terminals (debit and credit); offering to receive credit and pre-set fees for banking products such as leasing, working capital, escrow accounts, and overdrafts; special conditions for cash collection; and smart safes, among others.
Shell Box is also full of innovations this crop year. There were a number of consumer-focused initiatives, such as campaigns and promotions to further increase digital engagement at Shell stations. The fueling experience underwent major changes in the period, thanks to new features in the Shell Box that enable customers to pay for products and services without physical interaction with POS/terminals, without having to get out of the car, or without even opening their wallet. Between April 2019 and March 2020, the number of monthly Shell Box customers tripled, as did the number of transactions made through the app, increasing the penetration of digital acquisitions in the physical fuel retail of Shell stations. Part of this evolution also involves offering the new digital consumer some products with higher value added, since the mix of premium fuels is almost double in Shell Box compared to the average in physical retail at service stations.
In addition to the traditional credit card option, this period Shell Box expanded the range of payment options offered to its customers through new partnerships with digital platforms such as PayPal, Mercado Pago, and PagSeguro, as well as a new partnership with the insurance company Porto Seguro, whose customers earn cash back every time they stop for fuel. More than 10 million new customers are now enjoying the digital experience of Shell Box, and the app is now accepted as a form of payment at Shell Select stores!
We also developed and expanded other partnerships with major brands and companies, such as MasterCard, 99, Smiles, GPA, and Waze, to enhance the user experience with Shell Box.
The strategy with Waze, for example, seeks to facilitate routes for drivers, who are notified about the nearest Shell stations. When they stop for fuel, they receive information about payment options and other conveniences.
With the ride-hailing app 99, owned by the Didi Chuxing company, we now include Cartão99 as a payment option in Shell Box for drivers paying with credit cards in this platform. Adherence also gives drivers in this platform a 5% discount whenever they fill up with gasoline or ethanol.
Shell Box is already present in more than 2,000 service stations in Brazil and is expanding to cover more than 4,000 in the second half of 2020, in addition to more than 1,000 Select stores in the same period.
Focusing on dealers, we are developing the Shell Box Portal, a platform that will allow us to monitor the main sales indicators, such as revenue, average ticket, total transactions, and product mix. It will also be possible to filter the searches by date and time, which facilitates the study of scenarios to increase performance so dealers can learn about and understand the value created by the evolution of digital solutions that are increasingly advancing in the Shell service station network.
We believe that a motivated and appreciated team is the foundation of business success. In this regard, we annually reward stations that reach their goals and achieve operational excellence, including Health, Safety and Environment (HSE) criteria, with an international trip. In 2019, the destination was Prague, in the Czech Republic, where the awarding ceremony was celebrated with an exclusive concert by singer Anitta.
Shell Helix Centro de Serviços (SHCS)
We modernized the design of the Shell Helix Centro de Serviço franchise with a cozy space, a high standard of service, CRM, and differentiated benefits for customers. In 2019/2020, we expanded the franchise network to 115 oil changes, with 57 new hires, boosting the offer to dealers, adapting the projects to the existing infrastructure at service stations, and reducing costs and implementation time. The share of the volume of lubricants in the stations that have the Shell Helix Centro de Serviço was 35% higher than other stations, reinforcing the pillars of operational standard and increased revenues.
We reviewed our commercial strategy during the crop year in order to reinforce sustainability as a value proposition for B2B customers. In this regard, the learning acquired with ELO (see more here) reinforces our performance as a model for relationships with suppliers and process guarantees. Currently, 93% of our production chain is covered by programs that guarantee the origin of the raw material, either our own or third parties', under sustainability criteria and attributes.
This work began through individualized studies of the 88 largest customers, conducted in order to identify synergies with these players. The diagnosis supported several approaches, resulting (in less than a year) in 18 relevant interactions such as benchmarking, training, collaborative development of tools, and strategic consulting.
The interactions include workshops on sustainable procurement and relationships with suppliers, in addition to new commercial and institutional partnerships on all business fronts—sugar, ethanol, energy, and fuels—fostering increasingly sustainable relationships in various sectors of the economy.
Throughout 2019/2020, we reinforced the Humanology concept of the Shell brand, which invests in technology for the service of people, so that customers leave the station feeling better than when they arrived.
To this end, the new Shell V-Power campaign aimed at highlighting the attributes of our premium gasoline and addressed situations where small ethical dilemmas are put to the test when filling up a car, to make it clear that Shell V-Power is the best option in any situation. The communication generates a fun reflection based on everyday situations. Since choices are at the center of this reflection, the campaign has interactive resources to let consumers choose the end of each story, which initiated public participation in digital social media, such as Instagram polls and YouTube movies with different endings. Watch:
The tagline “Shell V-Power: Que é melhor, não tem dúvida” (Undoubtedly Better) was also featured in productions for open TV and OOH. In addition, our Shell V-Power Ethanol, a pioneering fuel in the premium ethanol category, was first advertised in the media, in line with the Shell V-Power Gasoline campaign.
The results were impressive: the attributes remained in the memory of consumers after the campaign, and we achieved the best historical performance in engagement and brand strength, with the largest brand equity we have ever had and 37% in top-of-mind awareness.
In addition to the conveniences, by adhering to Shell Box, consumers participate in promotions and have exclusive advantages, such as points that can be redeemed for miles in the Smiles loyalty points program or discounts when they stop for fuel. A new initiative this year was the Shell na Caixa promotion, in which participants collect virtual shells to redeem for exclusive prizes, such as a wireless headset or a speaker.
Focusing on truck drivers, the Poetas da Estrada promotion printed famous truck slogans on caps, t-shirts, and toiletry bags. The promotion was part of the traditional Clube Irmão Caminhoneiro Shell relationship program, which has more than 350,000 members across the country and helps make their journeys more enjoyable, safe, and productive. For every R$ 400.00 spent on fuel at the service stations, drivers received a digital stamp. For every 10 stamps, they can redeem for one of the prizes. Fueling with Shell Evolux Diesel earns an additional stamp.
We are present at airports in 24 states in Brazil with a network of 68 aircraft fueling terminals, so we could not stay out of the biggest event in Latin America’s aviation industry, LABACE, which was held in São Paulo (SP) in 2019. Our sales team presented products, services, and initiatives that aim to build consumer loyalty for the Shell brand. Shell AeroClass, the first app in the business aviation fuel market, stands out in this regard. The platform already has more than 7,000 members and registers the anticipated request of about 60% of all fueling of business aviation in the country.
To ensure the quality of our products, we have strict operating procedures, established in the Raízen Quality Policy and reinforced by the 100% Quality project. Among the actions carried out within the scope of this initiative, we highlight Quality Day, which is featured in our calendar of corporate events. On this day, we open the doors of our terminals so that customers, partners, and authorities can see the standards and controls that we have adopted to deliver the best product.
As a result of our efforts, we have historically recorded high rates of compliance with the Fuel Quality Monitoring Program (PMQC), established by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).