Death Care Products & Services Industry Trends

Consolidation Slows

Following a period of strong consolidation in the 1990s, large companies, like Service Corporation International and Stewart Enterprises, slowed the pace of acquisitions of family-owned funeral homes. In many cases, consolidators paid high prices and accumulated high levels of debt without achieving the economies of scale expected. An exception is when Service Corporation International acquired its biggest competitor Alderwoods Group in late 2006, adding more than 600 funeral homes and cemeteries from the Alderwoods network.

Growth in Prearranged Funerals

Prearranged funerals allow customers to contractually agree to the terms for a future funeral: funds or insurance premiums are collected upfront and held in trust. If state governments would regulate consumer contract disclosures, how these customers are solicited, and license sellers and agents, then consumers would be more likely to invest in these contracts.

Funeral Supplies from Retailers

Funeral supply shops are opening in strip malls and discount stores, making shopping for a funeral less morbid. Warehouse retailer Costco now sells caskets. Independent retailers typically charge lower prices than funeral homes.

Environmental Burials

A small, but growing, number of Americans are choosing environmentally friendly “green burials,” at less than half the cost of a traditional burial. Green burials use no chemicals and require no casket, making them friendly to the environment. Such burials are widely accepted in the UK but are just beginning to take hold in the US. Green burials are usually located in a nature preserve, involve biodegradable cardboard coffins or shrouds, and typically use a tree instead of a headstone.

DNA Archiving

Demand for a new controversial funeral home service may increase as genetic research becomes more sophisticated. Cadaver DNA kits allow embalmers to take a DNA sample from the deceased to archive in storage; later generations then have access to the DNA information to determine genetic predisposition to hereditary diseases and settle paternity suits. Since the process is so new and its path uncharted, some medical ethics experts worry that DNA testing and storage poses privacy and safety issues.

Marketing to Employee Groups

Some funeral homes are marketing to local employers, adding funeral assistance as an employee benefit. Service Corporation markets similar services to large multinational businesses. By giving employees discounts on funerals, funeral homes can sell associated services.