The US Funeral Industry Today
How much is the U.S. Funeral
The U.S funeral market is currently
estimated to be worth around $20 billion annually, with 2.4 million funerals
taking place each year. Due to the increase in the U.S. senior population
in coming years, this death rate is set to rise. There are an estimated
19,000 funeral directors currently offering services in the U.S, but exact
numbers prove to be difficult to pinpoint as the profession is regulated
differently by each State. This does mean that it is wise to ensure
the funeral director you choose is reputable and appropriately licensed.
Funeral Industry declining profits
and changes in the funeral market
In 2009 senior industry analyst
Toon van Beeck, of research firm IBIS World, reported that the revenue
of the U.S. funeral industry will grow by 1.2% in 2009 to a $20.7 billion
dollar industry, which, in all fairness, was down from a 2% revenue gain
the previous year. Since the economic downturn the funeral industry
has continued to see a decline in profits as families economize on funeral
costs or choose cremation as a lower cost funeral alternative. In
2012 the funeral industry reported at its annual NFDA convention that the
average profit from a funeral was down by 37%.
Today 42% (2014) of Americans
are choosing cremation and this rate is increasing exponentially in all
states. It is anticipated that by 2020 over 60% of Americans will
be cremated. Some states such as Nevada, Washington and Hawaii have
cremation rates over 65%, whereas Mississippi, Alabama and Kentucky have
the lowest cremation rates in the U.S.
“Death and Taxes”: The inevitability
of a life cycle…
“The honest-to-goodness truth
of the matter is that everybody does die,” stated Arvin Starrett, a spokesman
for the National Funeral Directors Association and the owner of Starrett
Funeral Home in Paris, TX in a 4/18/09 N.Y. Times article.
‘Death and Taxes’ are, as
the cliché states, two unavoidable facts of life!! And, let’s
face it in an economic and political environment that changes with the
wind, it is the one absolute truth we all can accept. That is why
the funeral industry, had continued to boom when the global and domestic
economy around them was crumbling. It is now estimated that the real average
cost of a traditional funeral is over $8,000 and much nearer to $10,000
when cemetery fees are taken into account.
Funeral Prices: Why do they
vary so much?
Funeral prices can, and do,
vary enormously both within a local area and between funeral directors,
so comparing like for like quotes is strongly recommended to anyone requiring
funeral related services. I am often asked by families why
funeral prices can vary so much, and why funeral directors are sometimes
unwilling to disclose full pricing. The answer is that the funeral
industry has existed for decades as a business where families did not ask
the cost upfront but accepted the cost of a final funeral bill, sometimes
without question. Today that has all changed as families are demanding
simpler funeral services at less cost and with a clear disclosure of what
they are paying for.
Family-owned vs. Corporate Funeral
Funeral director businesses
range from part time, sideline ventures to family-run enterprises, from
small to medium groups through to international corporations. One
of the main criticisms of the industry by watchdogs and other groups is
that some funeral homes are not being totally clear as to their true ownership,
hence the reason many traditional family business names still exist even
though they may have been acquired by larger groups. Therefore, when
acquiring funeral services it is wise to establish exactly whom you are
dealing with, as many people opt to choose a trusted local family funeral
business, only to find they are dealing with a large corporation.
As already mentioned funeral prices can vary enormously, and as a contradiction
to current retail practice, it is not always the national corporations
with large buying power that offer the best value services! As a
$20.7 billion annual industry, the funeral trade has also attracted unscrupulous
traders who may appear to offer discounted services, but be sure to check
out any firm offering what seems unrealistically discounted services!
The funeral market in the
U.S can be largely viewed as a juxtaposition between the corporate industry
and the independent family-run business. Service Corporation International
(SCI) who's main brand is Dignity Memorial is the largest corporate
company in the funeral industry marketplace. SCI bought out the number
2 corporate company ‘Alderwoods’ in 2008 and in December 2013 acquired
the number 3 corporate company Stewart Enterprises. SCI also own
the National Cremation Service brand, The Neptune Society and Advantage
Funeral and Cremation Services. In 2012, SCI grossed $2.4 billion
in revenue, and currently sits on $7.4 billion in future revenue from their
preneed funeral and cemetery sales. SCI has funeral properties in 43 states,
8 Canadian provinces, and select parts of Germany. However, their
recent acquisition of Stewart Enterprises has led to them selling off and
consolidating properties in some states in order to comply with the monopolies
Be careful to check the identity
of the funeral home you choose, as many corporate funeral homes still trade
under a family name. If in doubt, it is wise to ask the question directly
as to whether they are independently owned or part of a corporate chain.
In some cases where SCI acquired funeral homes, they not only kept the
same family name, but also continued to employ the same staff!
There are also several privately
owned companies who are conducting large numbers of funerals in the US.
Northstar Memorial Group, Smart Cremations and Newcomer Funeral Service
Group offer services on a larger scale.
Licensing and Trade Associations
in the Funeral Market
The National Association of
Funeral Directors (NAFD) operates on a worldwide scale and has their own
strict “Code of Practice” by which their members are bound. It has
the broader membership as it caters for the whole funeral profession, from
independent through to national corporate companies. There are a
number of trade associations for the U.S, many of these operate at a State
level. The majority of funeral homes are members of one or more of these
associations and schemes; however there is no regulation or law to insist
on membership of any. It would be worth considering whether the funeral
director you are selecting to handle your needs is a member of one of these
There is also Selected Independent
Funeral Homes – a member association solely for independent funeral homes.
CANA (Cremation Association of North America) devotes itself to the furtherance
of cremation training and the collation of cremation-related data.
ICCFA (International Cemetery, Cremation and Funeral Association) is an
||Expert Author: Sara
Sara is the Editor in Chief
for US Funerals Online and has been researching and writing about the death
care industry in the US for the last 5 years.
Revised: July 18th 2014