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
Recent Developments
Mar 8, 2024 - Slower Growth for Employment, Wages
- According to the Bureau of Labor Statistics (BLS), employment by death care services was relatively flat at the end of 2023 from 2022 and was up 2.75% from 2019. The employment levels of funeral service workers are projected to grow by 3% from 2022 to 2032, about as fast as the average for all occupations, per BLS projections. Wages in the death care services industry have also had limited growth in recent years, up 1.8% in December 2023 from December 2022 and 2.2% from 2019, per the BLS. The demand for funeral services will remain fairly consistent due to a steadily increasing aging population. According to the latest Centers for Medicare and Medicaid Services forecast, the US population 65 years and older is expected to have a compound annual growth rate of 2.4% from 2021 to 2031.
- 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.
- 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.
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