Consumers do change habits

November 7, 2025/Cemetery, Cremation, Products/

Service Corporation International Chairman and CEO Thomas Ryan made some interesting comments in his opening statements in last week’s SCI Earnings Call. And, I wonder when looking at the long-range perspective if these comments portend an increasingly successful future for cemeteries and less of that future for traditional funeral homes.

Here’s some of Ryan’s comments based on the 3rd Quarter 2025 results of SCI:

“Funeral gross profit decreased by $9.5 million, while the gross profit percentage declined by 170 basis points to about 18%.”

“This (Funeral) gross profit decrease was attributable to the slight decline in revenues for the quarter, coupled with higher selling costs and a moderate fixed cost increase.”

“Comparable cemetery revenue increased by $31 million or almost 7%”

“Large (Cemetery) sales grew by an impressive $8 million or 19% over the prior year quarter. Maybe more impressively, core sales accounted for $22 million of the sales production increase as solid velocity growth was complemented by higher sales averages.”

The emphasis on those quotes came from Funeral Director Daily simply to point out the somewhat negative aspects of SCI’s funeral financials and the positive aspects of SCI’s cemetery financials.

Here’s a couple of more quotes from SCI CEO Ryan that indicate how they see the value of their cemeteries going forward:

” . . .the cremation consumer continues to be a high-growth opportunity in our cemeteries. We’re seeing more cremation consumers pick either cremation gardens, cremation niches.

We have a lot of products that I’d tell you, consumers really don’t have familiarity with. I think a lot of cremation consumers come in and don’t really understand what we have available. So we’re really focused this year with some consumer research that we’ve done about trying to tie that consumer in a better way to educate them about what we have because we found in the focus groups that almost 0 out of 10 knew what we had and about 8 out of 10 once they saw it said, I’m interested in looking.” . . . . . .

“Our revenue team has helped construct some really nice inventory across our cemeteries. We spend about $160 million a year injecting new inventory into the system, and we do a real good job of converting that pretty quickly into sales. So we feel very good about next year right now based on everything we know at the high end, at the core level, and like I said, I just want to identify some of these productivity gains or velocity gains. If we can get more cremation consumers in there, it’s going to drive more sales, not as high an average, obviously, but drive more velocity, more familiarity. And the nice thing about cemeteries is it’s really a family tree component to this, right?

Because people are going to visit the cemeteries, people are going to want to buy adjacent properties for the family. So this is really good in educating and providing future leads and opportunities to our sales force.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take: People visit cemeteries and cemeteries are ever-evolving into places that do more than house the dead. My deceased mother would have celebrated her 99th birthday last week so I took some time on her birthday and visited the cemetery. Even on a cool Minnesota autumn morning the cemetery proved a good place of solemn reflection “on life” for me. . . . . and I think that is becoming a more common occurence among many of my friends.

During my time as a funeral director so many families struggled with the choice between traditional burial and cremation with memorial services. In my opinion, that was the decision that spurred the Death Care choices for these families. That decision, on shifting from generational burial families to first-time cremation consumers, was so “heavy” on people that not much was thought about eventual “Memorialization”.

Today, cremation is on its way to an 85% useage rate in the next two decades according to research by the National Funeral Directors Association (NFDA). Instead of that difficult decision between burial and cremation, I think cremation is a foregone conclusion for most of these people at this time. At the same time I think these consumers have lived through the world of bringing the cremated remains of their parents home and wondering what to do with them. . . .and, they don’t want that situation to happen to their children.

In an anecdotal setting of Baby Boomers like me, most of my friends today no longer ask me about the pros and cons of burial vs. cremation, the questions come about concerning “What to do with my ashes?”

Quite frankly, just yesterday morning I was listening to a national syndicated sports radio show on the radio while driving. I don’t know how the discussion turned this way but I heard one of the commentators say, “I’m fine with cremation, but I’m really concerned with what my family might do with my ashes.” I believe that thought is more common today than most of us believe it to be.

Partly because of that, “Memorialization” is at the top of mind for Death Care consumers today. SCI understands that and has all kinds of options available for those consumers at their cemeteries. Funeral Director Daily recently published an article, that you can access here, that shows that Los Angeles’ Hollywood Forever Cemetery is creating inventory on that premise also.

What I believe that this consumer change leads to is an opening for cemeteries, especially those that are combination cemetery/funeral home/crematories to increase their market share by introducing the options for memorialization to consumers. If you read the linked Hollywood Forever Cemetery article they actually offer “Free cremations” to consumers who purchase a certain level of cemetery memorialization.

From reading SCI CEO Ryan’s comments it appears that SCI sees this shift as well as they are investing $160 million per year in cemetery inventory that he says is “convert(ed) pretty quickly into sales”.

It’s my opinion that cemeteries that don’t have these premium cremation memorialization opportunities for today’s (and tomorrow’s) Death Care consumers should look into the idea of creating some.

Related — You can access the full transcript of the Service Corporation International’s 3rd Quarter 2025 Earnings Call here.

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