Death Care Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 14,500 death care service providers in the US prepare the dead for burial or interment, conduct funerals, and operate sites or facilities reserved for the interment of human or animal remains. Death care service providers include funeral homes, cemeteries, and crematories. Funeral homes account for about 74% of firms, while cemeteries and crematories account for the remainder. Some companies operate facilities that provide funeral services and cemeteries at the same location.

Pre-need Sales Dependent on Financial Markets

Because the proceeds from pre-need sales are typically invested in stocks, bonds and other instruments, death care service providers are vulnerable to declines in financial markets.

Government Regulation

Because the purchase of death care services occurs when families are especially vulnerable, sales are regulated at the federal, state, and local level.

Industry size & Structure

The average death care services provider operates out of a single location, employs 9-10 workers, and generates over $1.5 million annually.

    • The death care services industry consists of about 14,500 companies that employ 138,000 workers and generate about $23 billion annually.
    • Funeral homes account for about 74% of firms, while cemeteries and crematories account for the remainder.
    • The funeral home industry is fragmented; the top 50 firms account for about 22% of industry sales. The cemetery industry is less fragmented; the top 50 firms account for about 53% of industry revenue.
    • Traditionally, death care service providers have been small, family-owned businesses that are passed down for generations.
    • Large companies include Service Corporation International and Carriage Services.
                          Industry Forecast
                          Death Care Services Industry Growth
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          May 13, 2024 - Natural Organic Reduction Legalized in Arizona
                          • Arizona legalized the process of natural organic reduction in March 2024, making it the eighth state in the US to legalize the process since 2019, according to Connecting Directors. Delaware has also approved the process (awaiting the governor’s signature), and about a dozen other states have bills related to the natural organic reduction process introduced or in progress. Natural organic reduction is a process by which human remains are transformed into soil. In April 2024, the Cremation Association of North America announced a new training available in Natural Organic Reduction Operations Certification as demand increases for the method.
                          • US life expectancy rose to 77.5 years in 2022, an increase of 1.1 years from 2021, according to new data released by the Centers for Disease Control and Prevention. It was an improvement over 2021, when the projected lifespan was the lowest since 1996 and the second consecutive year of decline in average life expectancy. COVID-19 as an underlying cause of death decreased by 55% from 2021 to 2022 and dropped to the fourth leading cause of death from the third leading cause in 2021. The top three causes of death in 2022 were heart disease, cancer, and unintentional injuries. The age-adjusted death rate for the total population decreased by 9.2% in 2022 from 2021, totaling 3,279,857 resident deaths registered in the US in 2022.
                          • Following an undercover phone sweep, the Federal Trade Commission (FTC) found nearly 40 violations of pricing disclosures at funeral homes under the Funeral Rule, which requires funeral providers to disclose prices and other information to people arranging funerals, including itemized price information over the telephone. The FTC announced in January 2024 that it sent out warning letters to 39 funeral homes following its investigation, which involved undercover calls to more than 250 funeral homes in the US. Per the investigation, 38 funeral homes refused to answer questions about pricing or provided inconsistent pricing for identical services. The agency also noted that one funeral home misrepresented the local health code related to embalming and viewing of the remains. Failure to comply with the Funeral Rule can result in penalties of up to $51,744 per violation. Funeral homes that received the warning letter were asked to take prompt remedial action to ensure they are no longer in violation.
                          • A new study by the National Funeral Directors Association (NFDA) showed that funeral costs have not grown as fast as the rate of inflation, which was 13.6% over the past two years. The median cost of a funeral with casket and burial increased 5.8% over the past two years, from $7,848 to $8,300, according to the NFDA’s 2023 Member General Price List Study. Items with the highest rate of increase included service car/van (16.7%), removal/transfer of remains to funeral home (12.9%), and embalming (9%). The median cost of a funeral with cremation, including an alternative cremation casket and urn, grew 8.1% over the past two years, from $5,810 to $6,280.
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