How is cremation changing the funeral industry in 2019?

The U.S. cremation rate is now at almost 55%.  Forecasts are for the rate to reach 80% within 20 years.  How is the cremation trend changing the funeral industry?

Some say that the funeral industry faces some grave challenges.

Let’s first look at how this cremation trend is affecting the cemetery industry?

Most certainly cemeteries are facing a huge challenge.  Some cemeteries have added cremation niche mausoleums and ash scattering gardens in recent years.  Now there are reports of cemeteries in some locales merging.  This is an attempt to better prepare for a future with a very low burial rate and reconcile overhead costs.

U.S. cemeteryCemeteries are not as popular as they once were.  With Americans’ attitudes changing, more migration happening, and less religious and nuclear family values, cemeteries are becoming green spaces with little foot traffic.  There are progressive cemeteries that have added green burial sections and realigned their purpose in their community by holding community recreational events.

As the cremation rate continues to climb, cemeteries will be further challenged to stay operational.  Families save thousands of dollars opting for cremation instead of burial,  but these same families are then less likely to spend hundreds of dollars interring cremated remains.  Cremation niches, scattering or interring ashes, all cost if you use a cemetery.  Fees start at around $300 for a basic scattering or natural burial of cremated remains.  Although most cemeteries are likely to charge a minimum of $500 to inter cremated remains.

And, now what changes have we observed in funeral homes?

I think there are several distinct changes that we can see.  Firstly, the revenue potential for funeral homes has decreased markedly.  The average cost of a traditional funeral is $8,755 (NFDA 2018) without any cemetery costs.  If a family now opts for a cremation service, that price is likely to drop to around $3,600.  So, it is easy to see that revenue for funeral homes must be decreasing as families shift from traditional burial to cremation.

Secondly, more small independent funeral homes are installing cremation equipment.  Presently, 30% of funeral homes own and operate their own crematory, with a further 10% planning on installing equipment in the next 12 months.  The current growth trend in cremation may indicate it is a sound business strategy to install cremation equipment on-site, however, this equipment can be costly for a small business. If a funeral home cannot increase their volume of cases and now has increased their overhead, they could be in serious trouble in the coming months or years.

Other changes we are seeing are related to changes in legislation and training.  Many states require funeral homes to have an embalming room to be licensed.  This was challenged in Minnesota a couple of years ago by Crescent Tide Funeral & Cremation Services.  The small funeral business challenged the requirement for an embalming room when all they were offering was cremation services.  They won their case.  Other states are beginning to re-visit funeral legislation, especially where it is holding small funeral businesses back.  More training is being implemented for cremation technicians who do not have to hold a funeral director’s license.  In Florida, the law permits a business to open as a ‘Direct Disposer’ only.

More funeral homes already have, and continue to, open separate cremation companies to cater specifically for the demand for cremation.  And many funeral homes have sought to extend their normal service area in an attempt to generate an increase in cremation cases and hence increase their revenue.  This, of course, has implications for those small funeral homes who are not competing for the cremation market.

How can all funeral homes remain in business when over half of Americans’ are opting for a cremation?  And furthermore, figures indicate that around 80% of those cremation services are low-cost direct cremation.  In most cities now a direct cremation can be arranged for around $700.

How is the death care sector changing overall to adapt to cremation?

Cremation marketA few big changes are beginning to occur.  Most notably I have observed an increase in acquisition.

This is not only corporate acquisition on a large scale, but a number of private regional, and even private family groups extending their reach into new markets.

The Internet has changed the marketing of funeral services more than any other medium in the last century.  Marketing funerals has always been complex.  Selling a service that no one really wants to purchase!

Now funeral companies are using Google Ads to position themselves in a way never before possible.  With a greater capacity to reach into areas and markets with greater ease and investment.  Aside from the increase in funeral homes now having websites and entertaining social media, a growing number are offering online arrangement portals.  Allowing families to conduct cremation arrangements without ever visiting the funeral home.

The future journey ahead for the funeral industry.

Future of the funeral industryHere are my predictions for some further changes we are likely to see in the next 10 years.  We will see a reduction in the number of funeral homes in the U.S.  The number has decreased by at least 2,500 over the last 10 years.  But many more small-town funeral homes will not be able to compete in the changing death care landscape.

The probability that we will see another shift in the landscape.  There is a growing concern about the environment and an interest in natural death care alternatives.  Cremation (albeit more eco-friendly than traditional burial) still creates the same emissions as a 500-mile car journey.  Alkaline hydrolysis (water cremation) and human composting are new initiatives that are causing disruption.  If gas costs, cremation permit fees, and emission charges rise then the cost of cremation may escalate to a point that the public will turn again to a new alternative that offers affordability and simplicity.

Cremation rate rises faster than forecast!

The annual National Funeral Directors Association (NFDA) Cremation & Burial report has been released, and the data forecasts that the cremation rate is rising faster than originally predicted.

The cremation rate was originally predicted to reach 75% by 2035, now it appears the cremation rate is more likely to reach 80% by 2035.  This forecast has implications for the funeral business as a whole, when within the last 10 years, the cremation rate has risen exponentially affecting a funeral home’s gross annual revenue.

Cremation rates in the US between 1960-2035

Credit: Statista.com

Why is the cremation rate rising so fast?

The rise in cremation is largely being driven by consumer demand for more affordable, flexible and simple funeral alternatives.  This new market of baby boomers, families living paycheck to paycheck, and consumers moving away from conventional rituals is leading a shift towards cremation services.

Comparing Cremation PricesCremation is more affordable.  The average cremation service is likely to be half to a third of the cost of a burial service.  A casket is not required, especially if a cremation memorial or direct cremation is performed.

Some funeral homes are even offering rental caskets now for the purpose of conducting a cremation funeral.  This can save $500 – $1,500 on funeral costs alone.

There is no immediate need for a cemetery plot or burial vault, both of which can add $2,000+ to the overall cost of conducting a burial service.  Embalming is not required for a cremation, so this is another general cost eliminated from the total funeral bill.  Embalming can cost anywhere between $500 – $1,000.

So, as you can quickly surmise, cremation can present an immediate saving on funeral costs of approximately $4,000.

Cremation rates across the United States

Although the cremation rate this year is forecast to be around 53%, the cremation rate still varies across the nation.  The states with the highest cremation rate (over 70%) are Hawaii, Maine, Nevada, Oregon and Washington.  These are now being fast followed by states such as Arizona, California, Florida, and New Mexico.

The cremation rate is lower among the Midwest states and the southern states, although these states that had traditionally had a much lower interest in cremation, are reporting a more significant increase in their cremation rates.

An industry in change: funeral homes adapting to a new market

The funeral industry has long been a very traditional and stoic industry.  Some critics would describe it as a slow to respond to change.  However, there are funeral companies that are now specifically catering to the growing demand for cremation services.

Service Corporation International (SCI) has reduced its base cremation price in recent months, and begun a marketing campaign aimed at cremation customers.  SCI also bought 70% shares in The Neptune Society in 2011, a direct cremation company, operate a very active cremation plan direct marketing campaign, and have increased the number of Neptune Society locations in the last 5 years.

The average independent funeral home has maybe found this market shift to cremation more challenging to respond to.  A cremation service has a lower price value.  In the case of direct cremation, very minimal input is required by a funeral director, as no ceremony is provided by the funeral home.  With no casket, no funeral service, and a simple cremation service….a funeral home is looking at a significant drop in revenues!

Comparing cremation prices

Arrange a cremation onlineIt seems todays’ potential cremation consumer has become savvier, and more concerned, with comparing the costs for cremation.  Funeral homes are having to respond to this demand for transparent cremation pricing by openly disclosing cremation prices, either online or over the phone.  More funeral homes are choosing to openly offer their general price list (GPL) and cremation package pricing on their websites.  California even now legally requires a funeral home to disclose their GPL on their website.

A number of online platforms and websites have emerged aimed at providing cremation cost comparison services over the last few years.  However, a consumer must consider the subjectivity of the information provided.   Websites like Heritage Cremation and Legacy Cremation advertise a cremation service nationwide between $695 – $1,395, but do not provide a specific price for an area.  Other websites have gathered GPL’s from a range of funeral homes in an area, but may not include ALL funeral homes in an area, and require a visitor to search through funeral home after funeral home to compare pricing.  Or require a fee for a pricing report, or to submit your personal contact information to obtain a cremation price.

Some funeral home websites provide their own funeral pricing comparison charts for their own market, but may choose to omit any local providers offering a lower price than them.

DFS Memorials aims to help you quickly identify a local, independent cremation provider and provide you with his direct cremation service charge.  So, at your time of need, you do not have to become overwhelmed comparing cremation prices.  Cremation providers selected for the network all offer a ‘best value’ direct cremation package to their local community.

5 Funeral Trends that are changing death care traditions as we know them

The funeral industry is experiencing an era of change in the 21st century.  It is probably the most seismic change the death care business has experienced for over 2 centuries.  A once very traditional and stoic industry is being affected by shifts in consumer demand.

So, what funeral trends are happening?  And how are they affecting funeral homes and funeral consumers?

Funeral & Cremation Trends 2018#1  The demand for affordable cremation

Cremation has soared in popularity in the last 10 years, and in the last 3 years has moved to becoming the preferred option for the majority of Americans, with the cremation rate reaching 55% last year and set to reach 71% by 2030 according to Cremation Association of North America (CANA).

Although some families choose cremation with a funeral or memorial service, it is the demand for direct cremation as a simple, no-fuss and affordable funeral alternative that is making up the core of the cremation business.  Providers in the DFS Memorials Affordable Cremation Network report that up to 80% of cremation cases they handle are now direct cremation cases.

#2  An interest in eco-friendlier funeral alternatives

There appears to be a growing interest (especially in certain states) for eco-friendlier funeral options.  Many consider cremation eco-friendlier than a traditional burial with embalming fluids, concrete and steel being buried into the earth.  Some families that still opt for burial are considering natural burial, and even traditional cemeteries are adding hybrid green burial sections to their cemetery to cater to this demand.

#3  A break away from convention in rituals

Society is changing, and how we approach life rituals is part of that change.  There have been changes in our attitudes to how we approach births for some time now, with a greater interest in natural birthing processes.  Some families have moved away from a somber funeral ritual to choose a Life Celebration event instead, breaking the convention of a traditional funeral service.

#4  Personalization

Personalization has become quite the ‘buzz’ concept of culture today.  We all look for myriad ways to personalize our lives.  We personalize our daily lives and possessions to stamp our identity, so why not choose to host a funeral that exemplifies this quality of personalization?

This trend has meant that funeral homes are having to adapt to cater to personalized services.

#5  A return to the 19th century concept of family-led funerals

Back in the days an undertaker was largely just responsible for making a coffin and burying the deceased.  The family would prepare their loved one and lay them to rest in the parlor, holding a vigil at home to mourn their departed family member.  Eventually the business of undertaking extended to funeral parlors, and today funeral homes and funeral directors.

However, there is a trend affecting the funeral industry today, where more families are wishing to conduct a ‘DIY’ funeral for their loved one instead of just using a funeral home to conduct everything.

There are 10 states that DO require a family to employ a funeral director to conduct funeral services and handle a deceased’s body.  But that still leaves 40 states where a family can, if they so choose, opt to handle the funeral services themselves.  There are several organizations nationwide they support families who wish to conduct a family-led funeral.

These 5 trends are changing an industry that has been very traditional for many decades.  Some in the business recognize these changes and are adapting to meet the demand.  But for some in the industry, these trends are presenting them with challenges.