Funeral Services Industry Overview

Excerpt from Funeral Services Report

The US funeral services industry includes about 21,000 establishments (single-location companies and units of multi-location companies) that generate about $15 billion of annual revenue from the operation of funeral homes, crematoriums, and cemeteries. Major companies include Service Corporation International (SCI), Stewart Enterprises, and StoneMor Partners. The industry is fragmented: the 50 largest companies account for about 25 percent of industry revenue.

Competitive Landscape

Demand for services is driven mainly by the number of older Americans. The profitability of individual companies depends on sales and marketing and efficient operations, because local demand is relatively fixed. The main advantage of large companies is their ability to share resources (limos and hearses, embalmers, and marketing costs) among clusters of funeral homes. Small operators can compete successfully with national companies because the funeral business is intensely local. The industry is labor-intensive: annual revenue per employee is about $115,000.

Products, Operations & Technology

Pre-burial services, which include embalming and cosmetic preparation, transportation, facility rental for wakes and memorial services, account for about 50 percent of revenue. Sales of caskets and other funeral goods (urns, wreaths, etc.) make up about 45 percent of revenues. Other sources of revenue include burial rights. Major casket suppliers include Batesville Casket, Aurora Casket, and Matthews International. Funeral homes average about 120 funerals a year, so physical assets requiring large investment (facilities, hearses, limos) are often idle.