Cremation Costs in 2020: How cremation is disrupting the Funeral Industry

How much should you expect to pay for a cremation service in 2020?

Some of the most frequent questions we are asked these days are about cremation prices.  Now cremation has become mainstream and more Americans are considering cremation.  The Internet has also disrupted a service industry that once relied upon ‘traditional’ families, who would not even ask about funeral prices.  Five years ago, it was extremely rare to see a funeral home website disclose any cremation prices, now there is not only a growing number displaying cremation packages and prices online, but we also have funeral homes Google-advertising price-competitively.

So, what should you expect to pay for a cremation service as we come towards the end of 2019?  Are cremation prices going to go down in 2020 as more funeral homes install crematories?  A simple cremation service costs between $800 and $3,000 today.  The disparity in this price range is largely due to which cremation service provider you select.  All funeral homes have a basic cremation [direct cremation] on their General Price List (GPL).  The price differs by the provider, often based upon their overhead and profit margins.

Most of the states where the cremation rate is higher have funeral service providers offering lower-cost cremation services.  The table below gives some examples of median direct cremation costs in November 2019 in a selection of states and cities.

State City Direct Cremation Cost
California Los Angeles $625
San Francisco $698
Sacramento $695
Washington State-wide $600
Arizona Phoenix $639
Tucson $455
Florida Miami $696
SWFL $895
Orlando $895
Texas Austin $595
San Antonio $595
Houston $640
Dallas/Fort Worth $755
New York New York City $485
Illinois Chicago $995
Pennsylvania Pittsburgh $695
Ohio Columbus $599
Indiana Indianapolis $650

As you can see some of the most populated cities have the lowest cremation prices.  Prices tend to increase in rural areas, or where the cremation rate is lower than the national average. Find your nearest DFS Memorials provider to locate cremation costs.

What is the most popular cremation service?

The cremation rate nationally reached almost 55% last year and is forecast to grow to nearly 80% by 2040.  What is not disclosed is what percent of cremation families select full-service cremation services or just a simple cremation.  There has been a steady growth of interest in “just cremation” services, or what the industry refers to as a ‘direct cremation’.

Projected cremation and burial ratesA direct cremation is a basic cremation without any funeral ceremony performed by the funeral home.  The deceased is collected, cremated and the cremated remains returned directly to the family.  This is also the most economical disposition option available.  It is what families are asking for when they say “I just want a simple cremation…no fuss.”

From our survey with our DFS Memorials network of cremation providers, it is reported that 80% of cremations conducted are direct cremations in 2020.  Time magazine reported on how ‘Cremation Is Now Outpacing Traditional Burial’ with a case study from a funeral home in Boise, Idaho.  Robert Boetticher, Jr., of Cloverdale Funeral Home, shared how when in mortuary school in the 1980s cremation was barely mentioned, and now the cases at his funeral home in Boise are 60% cremation cases.

According to Barbara Kemmis, CANA’s executive director “Cremation has become the new tradition. It’s a seismic shift in the profession.”

So, although the funeral profession does not want to embrace it, it seems that direct cremation services are the popular cremation choice for families today.

How is the cremation trend impacting on cremation costs in 2020?

I have been observing the cremation trend and changes in cremation prices nationally for the last few years now. I would propose we are witnessing an impact on cremation pricing driven by the demand for low-cost direct cremation.  Cremation ‘price wars’ have been instigated in some areas.  With the decline in expensive traditional burials and the growth of simple cremation services, funeral homes’ profit-margins are significantly down.  This has resulted in closures, acquisitions, extended service area coverage and competition on pricing.

Are you happy to make cremation arrangements online?

In order to be able to offer cremation at the most affordable price, some funeral homes have set up a separate cremation business, where they seek to increase volume while reducing overhead.  Some of these cremation businesses offer an ‘online arrangement’ cremation price, as by enabling the consumer to complete all the information and payment online, this saves manpower for the cremation company.

Many of these online portals offer a 4-step process:

  1. Arrange online
  2. Collection of the deceased
  3. Registering the death & conducting the cremation
  4. Returning the cremated remains – by mail or in person.

Direct cremation onlineCremation costs and The Economy in 2020

There have been numerous reports and surveys on the rising cremation trend over the last 10 years.  The majority of these reports conclusively summarize that price has been the driving factor in the shift towards the more affordable alternative of cremation.  One could say that the funeral industry has brought this on themselves with their practice of gauging families with high funeral prices.  Since the economic downturn of 2008, we have seen slow but steady growth in the cremation rate.

CNBC reported in July this year that ‘Many Americans who can’t afford a $400 emergency blame debt’, quoting that 40% of Americans would struggle to raise $400 for an unexpected bill.  Sadly, we are on the brink of what I believe could be an era of funeral poverty.  Counties are struggling with their budgets for indigent funeral requests, as a growing number of low-income families find themselves faced with an unexpected funeral expense.  More counties are allocating their indigent burial budgets to direct cremation instead of burial services to cut costs.

Clearly, there is an intrinsic link between the state of the economy, the rise in the cremation rate and cremation costs.

Memorialization after cremation

There are two fundamental elements to the death care process: disposition of the body and memorialization.  For decades these two elements have been held solely in the domain of the funeral home.  However, cremation has allowed us to separate these two elements.  The disposition of the deceased can be handled clinically by the funeral director.  Cremation has enabled this to handled in a timely manner while removing the need to rush to arrange funeral services.  A memorial service can be held after the cremation, and therefore there is no rush to arrange a ceremony immediately.  This has dis-empowered funeral homes who often felt that we needed their memorialization services in order to grieve.

The rise of Personalization and Cremation

‘Personalization’ has become the new industry buzz word in recent years related especially to cremation services.  Once the cremation is performed and the family has the cremated remains, there are so many options of how to create a personalized memorial.  Families are embracing the flexibility this offers them, and how much money they can save by personally choosing how to commemorate a loved one.

Cremation Memorial ServiceSimple Cremation and baby boomers

There is a lot of talk about how the baby boomers are going to have an impact over the next 10-20 years on the death care industry.  They have re-invented life’s rituals and customs through each era of their lives, and now as they embark on the final journey, it is expected they will lead a re-invention of their final passage.  From surveys conducted with baby boomers, there is definitely an interest in simple cremation.

So, another year of flux for the funeral industry.  It seems on a whole they have finally accepted that cremation is not a passing trend but here to stay.  However, as more funeral businesses try to stay profitable with the expected lower cost of cremation services, I am sure there are more changes on the horizon.

1.Deathcare Services – Statistics & Facts. https://www.statista.com/topics/4731/death-care-services-in-the-us/ Published by E. Mazareanu, Jul 10, 2019

2. The United States Death Care Market Report 2018-2023: Market is Estimated to Reach Revenues of Around $68 Billion

In 2019 there were 19,177 funeral homes in the U.S.  The Provision of funeral homes and cemetery services generated combined revenue of $21 billion USD in 2019.  The main corporate funeral entities have the following shares of the market: SCI 1.9 billion, StoneMor Partners 261.94 million, Carriage Services. 210.7 million.

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.

The eroding tradition of funerals – Is cremation the new vogue?

We are at an interesting time in culture and society.  The industrial revolution changed culture fundamentally, just as the “information revolution” is still redefining culture as we know it today.  We see this impacting upon the funeral industry as it attempts to understand what these changes mean to it.

Firstly I see more funeral homes coming online with a website, something that many resisted when the Internet first started impacting on us as consumers.  The progressive funeral homes are even actively positioning themselves within the social media platforms, in attempts to communicate their ‘brand’ and the value of their services.

But fundamentally the tradition of funerals is changing, and this is where the essence of a revolution is based.  The “information revolution” has enabled the general public to become much more informed about their death care choices.  This recent article discussing the high cremation rate in Maine, encapsulates how our attitudes towards the rituals in our lives, is shifting how we regard the ritual and traditions surrounding funerals.

In discussing this changing culture Peter Neal, a funeral director and member of the Maine Funeral Directors Association, says “Fifty years ago, everyone went to church, everyone had a big wedding, no one moved in before marriage, and no one got divorced. Now, all those traditions have eroded a little. Funerals are no different.”

It is true.  Funerals are not necessarily somber, black-colored, wailing widow events these days.  Many of those that ARE choosing to have a service or ceremony are opting for the more uplifting life celebration type of ritual.  So yes, traditions are eroding, but in some way they are being replaced with new traditions.  Cremation is the most significant change in the funeral tradition.  The national rate in the U.S. is now at 41% and rising fast.  The choice of cremation has created a whole new tradition of ash scattering.  Dove, butterfly and balloon releasing are becoming a feature of memorial services, just as they had become a part of life celebration events like weddings.

The great bonus to the average individual is that a simple cremation costs much less than a traditional funeral service.  It puts control of the ritual back into the domain of the family as opposed to the funeral director.  A family can arrange a direct cremation for less than $1,395 and then perform their own memorial service or ash scattering.  A traditional funeral costs on average $7,300.  Whether people don’t have the money, or simply don’t want to waste money, the cremation option certainly saves a family money and at the same time empowers them to feel in control of the ritual.

As the cremation rate continues to grow, I am sure that we will see the percentage of direct cremations increase also.  Several funeral homes we have spoken with already report that over 30% of their cremations are direct cremations.  DFS Memorials believes that every American should have the choice to select their own death care ritual.  As a consumer society, we have become very adept at making our consumer choices and seeking out best-value deals.  Why should our funeral purchases be any different?  Tradition is defined as “the transmission of customs or beliefs from generation to generation”. The Baby Boomer generation has rebelliously reshaped customs and rituals throughout their lives, and now they have reached their retirement years, they are challenging the inherited way of regarding funeral care.  Yes, I think this is likely to erode the custom of the ‘traditional funeral’ but at the same time it will mark an epoch change in the culture of death care.

So is cremation the new vogue?  How do you feel about what kind of funeral you want?