Weep for the Grim ReaperAs cremation becomes more popular, funeral homes get burned.
Posted Friday, Nov. 9, 2007, at 3:11 PM ET
It's a tough time to be in the death-care business—or what all us nonundertakers refer to as "funeral homes." At Service Corp. International, the Houston-based giant with 2,000 homes, the number of services conducted in the second quarter fell 2,131, or 4 percent, from last year. And revenue per funeral barely kept pace with inflation, rising just 2.7 percent. At the Batesville Casket Co., a unit of publicly held Hillenbrand Industries and one of the largest U.S. coffin makers, sales in the first nine months of 2007 were flat compared with 2006.
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StumbleUponIn theory, death care should be immune from short-term economic swings. Death is one of only two sure things in life, and the U.S. population is aging. "This is one industry that pretty much holds strong regardless of the economy," says Mike Nicodemus, funeral director at Hollomon-Brown Funeral Homes, a 10-operation chain in Virginia Beach, Va. But costs for raw materials (wood, flowers) are rising, while the flow of customers has slowed. "There's been a decrease in the death rate over the last six to eight years," says Phil Jacobs, chief marketing officer at SCI, who's too polite to note this is bad for business. According to the National Center for Health Statistics, the U.S. death rate fell from 8.8 per 1,000 in 1999 to 8.5 per 1,000 in 2005. In 2005, fewer people died than in 2002, despite an increase in population.
And while Americans don't necessarily spend more on funerals during boom times, a slowing economy makes people think twice about opening their wallets for wreaths and high-end caskets. "People are definitely questioning us more on what things cost," says Robert Biggins, past president of the National Funeral Directors Association and operator of a funeral home in Rockland, Mass.
But the fact that more customers are opting for a cheaper option is also helping to kill margins. Cremation is, well, on fire. The cremation rate rose from roughly 15 percent in 1985 to 27 percent in 2001, and to about a third of all deaths (PDF) in 2005 and 2006, according to the Cremation Association of North America.
Compared with full-on casket burials, cremation is less expensive, requires less labor and fewer materials, and doesn't involve purchasing a plot. As such, it's perfect for an era in which consumers are trading down. "I'm finding that people that spent $8,000 to $10,000 on a funeral are now spending $4,000 to $6,000 on a cremation," says Nicodemus of Holloman-Brown, where cremations account for about 43 percent of business, compared with 20 percent a decade ago.
But the rise of cremation is not simply a matter of economics. And powerful social forces suggest the trend toward cremations, which are cheaper (and less profitable), may be rising. First, there's been much greater acceptance of the prospect. The Roman Catholic Church, which ruled cremation to be an acceptable alternative in 1963, in March 1997 said cremated remains could be present at a Catholic funeral mass. This sanction has contributed to sharply higher rates of Catholic cremation. The embrace of cremations hasn't been ecumenical, though. Jewish tradition largely frowns on the practice. And in the Bible Belt, says Jacobs, casket funerals retain their status as important religious rituals. Mississippi has the lowest cremation rate in the United States, at just under 10 percent.
The second reason for more cremations is that as mobility has greatly increased—older Americans frequently retire far from their original homes, while their children are likely to disperse throughout the country—a greater number of people no longer feel the need to be interred in a particular spot. Among the states with the highest cremation rates are those that have experienced large influxes of population, such as Arizona (60 percent) and Nevada (65 percent).
Third, concern over land use is helping tip the scales in favor of cremation. "The idea of taking up space in cemeteries when it could be used for other purposes is contributing to people's decisions," Nicodemus says. Some of the highest cremation rates are in ecofriendly coastal states like Hawaii (66 percent) and Washington (64 percent). In California, where SCI has a significant presence, more than half of 2005 deaths resulted in cremations.
With such megatrends working against it, the old-fashioned burial business seems to be facing trouble. CANA projects (PDF) the cremation rate will rise to 39 percent by 2010. But there are some causes for optimism (at least if you're an undertaker). Despite the best efforts of modern medicine and the pharmaceutical industry, baby boomers will begin to die at some point. The U.S. death rate is projected to rise to 8.9 per 1,000 in 2010 and 9.3 per 1,000 in 2020. Jacobs says the rapidly growing Hispanic-American population places a significant emphasis on "memorialization." (Translation: Hispanics are more likely to spend money on a funeral.) And for many Americans, regardless of their faith or ethnicity, it still seems anathema to scrimp on a loved one's last life-cycle event. As Biggins wisely and wryly says, "A funeral is something you can only do once."
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Remarks from the Fray:
In the funeral trade they're known as Direct Cremations and Cremations with burial. What has been hurting the morticians has been the move away from traditional funerals with burial--which can involve expensive caskets--to direct cremations in a cardboard container--which costs about $50. Direct cremations also dispense with embalming and preparation of the corpse. A direct cremation, even in California, only costs about $1,500, not $4,000-$6,000, as implied by the article.
Many families who had settled on direct cremation are starting to consider the benefits of the traditional memorial service, which involves viewing and visitation for a couple days or so. It is therapeutic, and is a fitting memorial to the deceased. But traditional memorial services need not involve burial--which in expensive areas of the country can cost as much or more than preparation of the corpse and casketing. That is, a family can cut almost half of the typical cost of a traditional funeral by having the corpse cremated after the memorial service. This is particularly true in those states which allow families to "rent" caskets.
This would seem to me a happy medium between the dignity (but cost) of the traditional funeral with burial plot and the economy of the direct cremation. The statistics may imply a worse fate for funeral homes than is actually the case.
--genedio
(To reply, click here.)
Death has always been, to put it mildly, a problem. But only with the rise of the funeral home has it become a financial problem too. The death of the home-parlor-based funeral led to the rise of funeral-parlor funeral, and there is some evidence that the death of the former was helped along by the latter.
But absurd fees, to say nothing of pressure put on the living by funeral industry workers, have driven the cost of a funeral up into and in some cases well past new-Toyota territory. And for those willing to forego the expense of the modern funeral, it's possible to get rid of the no-longer-living for well under $1000.
If the industry as a whole had followed a GM-style system, then people of modest means would have been able, right along, to afford a funeral for their dead relatives without having to dip into retirement funds, home down payments and tuition savings. And at the same time, they could have sold titanium caskets fitted with silver and gold to the well-off-- without making Joe (and Jose) average feel as though they were being cheap if they didn't spring for the high end caskets and all the bells and whistles. Does GM do this? No, they sell people lower down on the pecking order Chevys-- and they roll out the Caddys for their more comfortable clients. Disney does the same thing.
Now the funeral industry has the reputation it deserves, and it's suffering, just a little, for that. They lost our business years ago-- my wife and I have plots paid for in a nearby cemetery, and when the time comes, later we hope than sooner, our kids will have to get the coffins I build out of the basement, pop us in, and invite the neighbors over for some food and drink, while we wait in the living room until the boyos are ready to drive us in the back of a station wagon to the small town cemetery and say goodbye. The local funeral homes-- which aren't local any more anyway, just part of some national chain-- won't have bupkis from us.
--ihatethenewlogin
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It seems to me that a natural, dignified, and economic burial would consist of burying a body (possibly pasteurized by a high temperature soak but otherwise unprocessed) in protected forest areas, with a new tree planted over each gravesite. Long-lived trees should be selected and each might be marked with a plaque with a suitable inscription honoring the person buried there. The plaque should be chosen to endure for 50 or 60 years, which would probably serve to identify the site for as long as anyone would desire to visit it.
The body would, obviously, provide nourishment for the tree so that each tree would represent the person in an emotionally beneficial manner while serving a useful purpose in carbon sequestration, air filtering, and terrain stabilization. A fee could be charged which would help fund an annuity sufficient to maintain the forest.
I see no reason to think that a tree would be a less fitting and satisfying memorial for a person than the currently fashionable block of stone. It would symbolize a form of continuing life while the stone is some poor inert monument already millions of years old.
--PhilfromCalifornia
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(11/12)