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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 15,000 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 8-9 workers, and generates over $1 million annually.

    • The death care services industry consists of about 15,000 companies that employ 131,600 workers and generate about $18.6 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

                          Coronavirus Update

                          Apr 7, 2022 - COVID-19 Deaths Decline
                          • Many funeral homes have seen families opt for cremation and delayed memorial services in response to COVID-19. More Americans have opted for cremation over the years, surpassing burials in 2017, according to the National Funeral Directors Association (NFDA). The pandemic has accelerated the trend, according to the NFDA. More families opting for cremation could challenge many funeral directors as burials are much costlier and more profitable than cremations. Cremation may also be preferable as it doesn’t involve embalming, which in deceased COVID-19 patients can present risks to workers who perform embalming. Some funeral homes have ceased offering embalming services unless legally required (such as when a body is entombed in a crypt).
                          • Cremation services may soon include more direct-to-consumer (DTC) business models like those that have gained in popularity in other industries during the pandemic, according to The New York Times. The US cremation rate is expected to increase to more than 78% by 2040 compared to 54% in 2019, according to the National Funeral Directors Association (NFDA). As Gen-X and Millennial consumers increasingly make end-of-life arrangements for their parents, their preference for the convenience of online ordering could eventually disrupt an industry that’s remained relatively unchanged for decades. Challenges to DTC cremations abound, including consumer acceptance and a patchwork of state and federal regulations. However, several DTC cremation services start-ups have emerged in recent years, and some have the backing of large, established funeral home chains.
                          • Restrictions on gatherings created challenges for funeral homes and their clients’ ability to have viewings and memorial services. Funeral homes used live streaming options to record and broadcast viewings and memorial services, so family and friends could attend remotely and send condolences electronically. To accommodate larger numbers of mourners while maintaining social distancing, some funeral homes staggered attendance of funerals and viewings into small groups. Other adaptations included drive-through casket viewings and visitations and simulcasting services on large movie screens in cemetery parking lots which mourners could view from their cars. While many of these adaptations may wane as the pandemic eventually abates, some funeral directors believe tech-enabled remote services and more outdoor service offerings will remain.
                          • The pandemic has prompted consumer advocates to urge the Federal Trade Commission to update its regulation of funeral homes. Rules in place since 1984 require funeral homes to offer detailed pricing information if asked in person or over the phone. Advocates are calling for the rule to be amended to require funeral homes to include pricing on their websites to make it easier for consumers to research funeral services without leaving home.
                          • The COVID-19 relief bill passed in December of 2020 included $2 billion in reimbursement funding for people who faced hardship in paying funeral costs related to the death of a loved one from COVID-19. Eligible recipients could receive up to $9,000 per funeral and up to $35,000 if numerous family members were lost to COVID-19. While the benefit is paid directly to surviving relatives, many funeral homes are working with families to help them gather the necessary documentation to apply for reimbursement. The program launched in April 2021 and is administered by the Federal Emergency Management Administration (FEMA). Eligible expenses include caskets, urns, burial plots, headstones, officiant services, and cremation and burial costs.
                          • The rapid spread of the Omicron variant of the coronavirus led to record levels of infection. Still, Omicron causes less severe illness than previous variants, according to The New York Times. However, while Omicron causes less severe illness, the volume of infections pushed up the number of deaths. In early February, there were about 2,600 reported COVID-19 deaths per day, the highest since the peak of the Delta surge in the winter of 2021.
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