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 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 134,000 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

                          Jan 6, 2024 - Funeral Costs Lower Than Inflation: Study
                          • 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.
                          • Funeral homes will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                          • Rising cremation rates, less disposable income, and increased online sales are expected to limit growth in the US death care services industry, which is projected to decline at a less than 1% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The slowdown follows several years of higher growth during the pandemic in 2020 (9.1%), 2021 (15%), and 2022 (1.5%).
                          • Labor quality and inflation were tied as the top business problems for small business owners, each called out by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell half of a point in September 2023 to 90.8, marking the 21st consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy. Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.” Small business owners are still encountering historically high job opening levels, with a seasonally adjusted 43% of owners reporting job openings they could not fill in the current period. Nearly 60% of owners reported making capital outlays in the past six months, with 41% spending on new equipment, 22% acquiring vehicles, and 17% improving or expanding facilities.
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