BBC interview with István Kapitány, Executive VP of Shell Retail

Duration: 5:29 minutes

[In vision] Ben Thompson and Sally Bundock

Ben Thompson: But before that, in a world of falling oil prices and squeezed profit margins, the companies that are selling it are increasingly looking for other ways to boost revenue.

Sally Bundock: And that's clear, isn't it, when you go to a petrol station forecourt?

Sally Bundock: Shell runs the biggest single chain of petrol stations. It's got around 43,000 all over the world.

[Graphic]

[Text] Fuel convenience

Image of Shell forecourt partnered with Sainsbury’s Local. Shell Pecten to left.

Text flies in: 43,000 sites worldwide (source: Shell)

Ben Thompson: Well, close behind are China's state-owned SINOPEC, ExxonMobil and BP.

[Graphic]

SINOPEC, Mobil and BP logos fly in replacing previous text.

Ben Thompson: But Shell is increasingly using those sites to sell things other than petrol. Just last year it got through 250 million cups of coffee - no surprise there -but also 350 million cold drinks.

[Graphic]

[Text] Fuel convenience

Image of Shell-branded petrol pumps with Shell Pecten to right

To left, a graphic shows rows of small coffee cup images to illustrate the 250m cups of coffee sold (source: Shell)and rows of small bottled drinks images illustrating the 350 million cold drinks sold (source: Shell).

Sally BundockK: In fact, in the US, it's come full circle and the stores now dominate. Around 80% of all motor fuel bought in the US is sold in a convenience store.

[Graphic]

Image of a customer filling her car at a US forecourt offering ‘Slurp &Gulp’ at $1.99. A red text circle displays over the image.

[Text] 80% of US fuel sales in convenience stores source: NACS

[In vision]Ben Thompson, Sally Bundock and István Kapitány

Ben Thompson: Well, István Kapitány...did I get that right?

[In vision] István Kapitány

István Kapitány: That's right, you did!

Ben Thompson:...is the Executive Vice President at Shell Retail. Very good morning to you. Nice to see you.

[In vision]Ben Thompson, Sally Bundock and István Kapitány

István Kapitány: Good morning. Thanks very much for the invitation.

Ben Thompson: So good start, I got your name right!

István Kapitány: Ah, very good. You've practiced it a while.

Ben Thompson: You were smiling when we talked about how much coffee you got through and how many drinks you sell. But it's a really important point. It's a really important source of revenue for you. Tell me how that's changed over the past decade.

[In vision] István Kapitány

István Kapitány, Executive Vice President Shell: Well, it's a rapid change. In the last ten years you see a massive change. 35% of the customers who are coming to the 44,000 service stations around the world are buying fuels only, and 50% of them are buying convenience retail items like coffee.

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The inside track

Shell Retail operates in 70 countries worldwide

Licensed to Royal Dutch Shell. For display until 23 May 2017 on company website and intranet only

István Kapitány: We have, for example, in the United Kingdom, the biggest Costa Coffee chain at Shell service stations. Almost every Shell service station in the UK has Costa. And that is really growing. We are introducing in more and more and more countries with global partners.

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The inside track

Shell Retail handles 20 million transactions a day

For display until 23 May 2017 on company website and intranet only

[In vision] Ben Thompson, Sally Bundock and István Kapitány

Ben Thompson: I can see how coffee, drinks, food are a really useful fit, because people want to get that food on the go, they're doing other things. But you can also pick up what I consider to be quite strange things.

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The inside track

Shell Retail serves 250m cups of coffee a year

[In vision] Ben Thompson

Ben Thompson: Coals for your fire, logs for your fire.

[In vision] Ben Thompson, Sally Bundock and István Kapitány

Ben Thompson: Flowers, maybe, for your loved one - although anyone buying flowers at a petrol station may get it in the neck!

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The inside track

Shell Retail has more sites than McDonalds or Starbucks

[In vision] Ben Thompson

Ben Thompson: All these things that you wouldn't necessarily expect. They're not so much convenience things, are they?

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[In vision] István Kapitány

István Kapitány: Well, it is growing. It's quite interesting how the customers' habits are changing. So in many, many, many countries now we are starting to sell what you would say we should have been selling for a long time. So bubble tea in Asia, döner in Turkey, steak and kidney pie in the United Kingdom. We are still working on the fish and chips programme!

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The inside track

Shell Retail operates in 70 countries worldwide

István Kapitány: So we really need to be becoming significantly more a convenience outlet all around the world for our consumers, because that is what they tell us.

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The inside track

Shell Retail handles 20 million transactions a day

István Kapitány: The reason we're doing this is essentially not just because the oil price is low, because that is what the consumers and the customers would like to get from these locations.

[Strapline text]

The inside track

Shell Retail serves 250m cups of coffee a year

[In vision]Sally Bundock

Sally Bundock: But you as an organisation, you've had a very challenging recent couple of years because of lower oil prices…

[In vision]Ben Thompson, Sally Bundock and István Kapitány

…and many are talking about lower oil forever now. So that's a world you have to get very, very used to

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The inside track

Shell Retail has more sites than McDonalds or Starbucks

Sally Bundock: But also as well, how we are moving around is changing…

[In vision] István Kapitány

Sally Bundock: …So the driverless vehicles conversation…

Sally Bundock:…electric vehicles conversation, all that kind of thing.

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Sally Bundock: So how will your forecourts be changing?

[In vision] Ben Thompson, Sally Bundock and István Kapitány

Sally Bundock: What are you going to do to accommodate all those significant changes in the future?

[In vision] István Kapitány

István Kapitány: So these changes are not entirely new. I mean, some of the elements are new, of course, but if you look around the world, we are selling LPG, we are selling CNG, we are selling biofuels.

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The inside track

Shell Retail operates in 70 countries worldwide

István Kapitány: In biofuels, we are the number one in the world. And we are the only company producing now 2nd generation biofuels which are from the non-edible part of the sugar cane, so it's very environmentally friendly.

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The inside track

Shell Retail handles 20 million transactions a day

István Kapitány: Clearly we are selling petrol and diesel, but more and more, of course, with all the changes, we really need to adapt. So we are in the forefront of building hydrogen service station networks in Germany, in the US, and I'm very happy to say that we're starting in the UK as well next year.

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The inside track

Shell Retail serves 250m cups of coffee a year

István Kapitány: And hydrogen is for fuel cell cars. By the way, the range is 700 km, one fill up is around three minutes, so it's a really good proposition for electric vehicles.

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The inside track

Shell Retail has more sites than McDonalds or Starbucks

[In vision]Ben Thompson, Sally Bundock and István Kapitány

Sally Bundock: As you move into that realm, though -whether it be hydrogen, whether it be biofuel, or whether it be a battery change in an electric car -trust is really important, isn't it, from that point of view?

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Sally Bundock: And from that point of view, I assume Shell is in a position of strength. It's a brand we all know, wherever we are in the world.

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The inside track

Shell Retail operates in 70 countries worldwide

[In vision] István Kapitány

István Kapitány: It's more than 100 years. I mean, this is a very, very trusted brand. We have a global brand share of preference of 23%. In other words, almost a quarter of the motorists in the world out of the 900 million motorists are saying, 'We would prefer Shell.'

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The inside track

Shell Retail handles 20 million transactions a day

István Kapitány: And so whenever we go and start with electric charging, with electric battery changes as you mentioned, there is a trust, because they know when we're doing this we put research and technology behind it.

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The inside track

Shell Retail serves 250m cups of coffee a year

István Kapitány: We are spending $1.1 billion on research and development in the company. This is the essence of the company technically.

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The inside track

Shell Retail has more sites than McDonalds or Starbucks

István Kapitány: So I think we are really well prepared, and we are trying to be participating in shaping this. So in hydrogen...electric charging we have in Norway, we have in Russia, we have in Spain already, and we will start also in the UK.

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[In vision]Ben Thompson, Sally Bundock and István Kapitány

Ben Thompson: In one word, what's the one thing I'll be able to buy at a Shell forecourt that I can't buy now? So in future will be...

[Strapline text]

The inside track

Shell Retail operates in 70 countries worldwide

[In vision] István Kapitány

István Kapitány: Well, as I mentioned to you, there's going to be the fish and chips so that can be for you, if you are here. But it's a global programme, so we have the fish and chips that we want to have everywhere in the world.

[Strapline text]

The inside track

Shell Retail handles 20 million transactions a day

[In vision]Ben Thompson, Sally Bundock and István Kapitány

Ben Thompson: I will hold you to that. István Kapitány, thank you very much, the Executive Vice President at Shell.

[In vision]Ben Thompson, Sally Bundock

Sally Bundock: Just to say, if you're wondering...Hungarian - hence the name.

[In vision] István Kapitány

István Kapitány: Ah, that's right.