A Little Dying in the Death Biz

October 2nd, 2009 by Harrumpher Leave a reply »

While not in the habit of pointing to a single link, I learned several things from the Financial Times piece on tough economic times in the funeral biz. It dumped the stereotypes and clichés I was quick to assume.

We all know every industry has suffered from the deep, prolonged, worldwide recession. So, the funeral one will have lower profits as consumers bargain shop even final expenses for motionless loved ones, eh? It’s not so simple.

Operating earnings of the industry’s four giants are down 10% to 38% since May. The average of about $10,000 for burial with plot continue to go down. (The FT notes that this expense is third after house and car for most families.)  Yet, the profit drop does not come from dickering over caskets and flowers.

Instead, pre-need planning now includes comparison shopping (even to getting the box from a big box store, like Costco).

This still-alive purchasing has long been great cash flow in the death biz. Think the invested float AMEX keep from all those unspent travelers’ checks.

The industry expects a heap of funerals after its death trough too.  Lots of us boomers should be dropping left and right almost simultaneously. Yet my generation favors the much cheaper (like 50%) cremation, which the industry projects to go from the old 4% to the current 35% to an expected 60% of corpse resolution.

Meanwhile, there’s been lots of consolidation and M&A in the biz. Investors see the big changes and have been doing their own bargain hunting, but for companies not caskets.

The FT points to the possibility of upscaling and fashion/status marketing. It says new opportunities are there in fancy urns and even “the opportunity to have artificial diamonds made from love-ones’ ashes.”

It did not deal with our thought here of green burials.  Rather than bury a multi-thousand dollar casket to rot with the body, this— in the few places available — goes for a pine or paper box and no embalming cost. It’s returning to the earth and so forth that most humans have done for hundreds of thousands of years quite nicely.

In Massachusetts, there’s no law, only industry pressure, to keep greens from happening. There is no cemetery yet that allows it. Some of the big ones are considering it. A few New England states have such facilities. They’re on the way and will likely take more of the sting out of death, at least for the survivors.

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3 Responses

  1. Uncle says:

    Oddly, Jewish cemeteries allow such burials and indeed require them. There is the rather large hump of religious affiliation to get past, but the example shows it’s possible.

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