FROM PASTURE TO PRESTIGE:

How a Trailblazing Cattle Ranch's First Beef Auction Won Over Consumers & Skeptics and Set the Bar High

Interview & Artwork by Derek Sample, Derek@ABPmag.com

Capitol Angus & Texas Beefhouse.

Tyler and Samantha Duvall, Whitehouse, Texas

CapitolAngus.com

TexasBeefhouse.com

Hey Tyler, recently you had 2 incredibly successful auctions for your Texas BeefHouse brand. Can you tell us more about it?

Chris Earl from CK6 Consulting had a bold idea a year ago: Why not have an auction for steaks and hamburgers from our Texas Beefhouse brand, be fore our annual Capitol Angus Ranch bull sale in November? It was a new concept for us, what Chris calls "price discovery," where we find out how much people are willing to pay for our beef. My dad and I were initially unsure—putting our business out there felt risky, especially since we've had challenges with cattle auctions. But Chris has helped us avoid those pitfalls in the past, and we trusted him. We've built a strong customer base selling our beef online for five years, so it made sense to go for it. As Chris says, the market’s never wrong.

That's so true. Sounds like you were all in. Yeah, we treated it like our Capitol Angus bull sale, capturing all the dynamics of professionally getting your product to the market. We're two months before the steak sale, and every call I get is for the steak sale, not even for my bulls. Now I’m nervous how it's going to go. But our bull sale went great. Everything was mind-blowing: the steaks, the hamburger, and the public response. So that ignited a spark in all of us here.

Our customers went after our product and raised their hands because they found the whole experience worthwhile. They put a value on our product that day, around $20 a pound over what we had been selling it for in the past Later that evening, he explained, "Price discovery, you had families sit down and bid on your beef, and the value is about $67 a pound for steaks. But at the end of the day, that's not surprising. When you order a good steak at a nice restaurant, you'll quickly pay $67 per pound. So why won't they do that in an auction setting and buy 20 or 30 pounds of steak, bring it home, and feed their family for a month or two on high-quality meat, which we know they already want? This way, they connect straight to the rancher, see the quality, know

precisely where it came from, and want to do it again. All of that proved that Chris Earl was spot on.

Since 2017, we’ve had several thousand customers of our Texas Beefhouse brand. When we started to get more of a following, we learned how to handle the growth and daily shipping schedules. It was time to have this auction for all our customers, but it also recruited many new ones. But it also opened a new can of worms for us because we were looking to open a store in South Tyler last summer. But we also had to consider all the headaches that come with owning a building, and trying to figure out how we would staff it.

It was a blessing to have this auction and sell a few weeks’ worth of beef in one day. We can repeat and grow with this model to keep building both compa nies. Soon, we’ll build it up to where we can hold these multiple times a month, and our customers can plan when they want to participate. They've already had our beef before; they would say, "I find this product valued at $25, $35, $45 a pound.” Then, this way, they get to pick the quantity and price, and whether it comes home with them. So, this puts the buying power back in their court, which wouldn't happen if we didn't have a quality product.

This took a lot of time on our end. With Capitol Angus, we trusted what Chris Earl told us regarding genetics. We've made many friends with other ranchers, looking at marbling, tenderness, growth genetics, building an animal, and a steak. So, we want to keep learning and paying more attention to our cow families. We know what animals are doing their job, bringing an excellent steak to the plate.

I had a meeting this morning with some advertising consultants. They had a lot of questions about that, and basically, it boiled down to how we explain to our customers what we're trying to do here. We don’t want to intimidate them and think this isn't easy. A lot of that'll come down to how we build a new platform where it's easy to bid on beef and complete this process in person

But an interesting story also comes to mind; I had some customers who were mad at me about Christmas time, mainly because we held a Christmas auction. It was only 12 lots at maybe six or seven hundred pounds of steak. It was just last minute, and we had mad customers because they wanted their steaks or needed to get their Christmas presents out. For example, I had a customer in Fort Worth who’s done a lot of business with us. Every Christmas, he ships his clients about $150 worth of steak, which he would do for 40 to 50 people. In fact, in this last auction, he bought almost every single tomahawk we had and over half of the ribeyes. That was just one customer!

I want our product in people's homes. They've got Texas Beefhouse Wagyu or Angus beef, and they're pulling it out of the fridge and want more of it. That’s how we've grown this business, with more and more return customers.

We're working both companies side by side, Capitol Angus and Texas Beefhouse. If our sale catalog says we're auctioning off Angus, it's a registered Angus animal. If it says Wagyu, it's half Angus, half Wagyu. I've got plenty of both on this ranch. Wagyu has a higher demand, and there’s no doubt that it’s a trendy item in the market. It does marble a little bit better since it's a natural marbling gene. It also has a natural tenderness gene that's more dominant. So, we're pushing both envelopes. I hope in 10 years, people see Texas Beef house, and they don't see Angus or Wagyu; they just see that that's the best steak they've ever had.

Are you just using a regular bull auction platform?

Yeah, it worked just fine, but we are working on a bet ter version now. I don't want to blow the lid off it quiet yet, but CK6 and Texas BeefHouse are working together to put together a new online bidding platform. It will

I would also like to create a special online place where more ranchers can sell their beef directly to customers. Right now, there isn't a good way for them to do this. These middlemen often take a big cut, leaving ranchers with less, even though they do all the hard work. It's all about making sure the ranchers get a fair deal, and customers get great beef straight from the source.

We can do 20 or 30 animals a month with future auctions. My rate-limiting step has always been how fast I can sell them, not how quickly I can grow them. I can grow and prepare them, but I need a place to go with them. My butcher's easy to work with, and it’s all USDA stamped and approved. I can take 10-12 at a time, and they can handle that within 24 hours.

When that first sale happened, I was looking around; steaks were going for over a hundred dollars a pound. Everybody in the room smiled, raising their hands. The bidding online was blowing up, and customers were happy. Even after delivery, customers sent us thumbs up and pictures of how they cooked their beef. Everybody’s thrilled.

"the market is never wrong" -Chris Earl

When will you be hosting your next auction?

April 25th is our next auction. With breeding and AI season for Capitol Angus, then building a whole new catalog, we have plenty to do. But I want to ensure that anybody who reads this understands we're selling beef daily—hamburger, briskets, stew meat, roast, and all the sausages. How are your Bulls coming along this year? We always look forward to seeing what you offer in your November bull sale.

I'm so excited about the November sale coming up this year. We're going to have about 140 bulls. I love how they're gaining weight. I'm not pushing them real hard, but we sell 2-year-olds. If I were selling year-olds, I'd push them a little harder, but they're gaining a little over three pounds daily.

Note: I called Chris Earl, while on his way to the Pine View Angus auction, and asked him to tell us more:

For years, we've been on the lookout for the perfect opportunity and the right team to bring this bold idea to life. Changing how we market our product meant stepping into the unknown and being fearless.. We leaned into our belief in our product and our strategy, and we made it work - not just once, but twice.

Like Tyler, I was pretty nervous as well. I had to pace for an hour after the first day . With 70 people in the seats and over 800 bidding online, it was a tremendous success.

“The market is never wrong”, and “competition's good for every product”. Those 2 quotes are what I keep telling people and it’s all true. It encompasses the free will to decide at that given moment in time what they want to pay, or don't want to pay.

The success we've seen proves we're on the right track. That's why I believe in the power of auctions, it's the best marketing tool out there.

Our aim is to showcase the marketplace in a way that's straightforward and connects directly to the producers. We're diving into the market with the hope of creating a system where anyone, anywhere, can meet their need for premium beef. This shift towards a market that values quality over quantity is at the heart of why we started this venture.

We're working to make everyone comfortable with the auction process, ensuring they understand it's a fair and transparent way to access the best beef. We've also brought on board a fantastic communicator, Amanda Radke, to help bridge the gap, making the auction world welcoming for everyone.

In essence, we're about more than just selling beef; we're creating a new way for people to access the quality they desire, directly from the source. It's an exciting time, and we're just getting started.

Above: CK6's Chris Earl, Amanda Radke, Wes Tiemann, & Kody Fleeman on far right, with Aaron Duvall 2nd in from right. Below: Tyler and Samantha Duvall