Funeral homes and cemeteries — Where’s the future potential?

February 5, 2026/Business, Cemetery/

I’ve been around the Death Care business my whole life. . . . and one thing I can tell you is that, like other businesses, “things” change. For instance, Death Care clientele used to spend a high percentage of their “Death Care spend” on caskets and other merchandise. That’s not always the case anymore.

And, the American consumer is perpetually in a state of change. On Saturday of last week the New York Times carried the following statements (emphasis added by Funeral Director Daily) about companies that had recently reported their quarterly earnings:

About American Express — “American Express saw its profits grow 13% in the fourth quarter as the credit card giant continues to benefit from its well-to-do clientele spent heavily on everything from luxury goods to restaurants to travel.”

About Apple — “Apple on Thursday reported record quarterly sales of the iPhone thanks to new, higher-priced models. . . .”

Those two short quips related to me how America’s consumers are also changing. For most of my life, the United States has had a large and growing “Middle Class”. Today, many economists believe that “Middle Class” is shrinking and those at the ends of the spectrum are growing. Those “ends of the spectrum” would be illustrated by the “growing wealthy” and the “barely making it” vernacular in my point of view. . . . And, I think it poses a good question if that hypothesis is true then how might we see Death Care purchases change over time?

If you would ask Gemini Artificial Intellegence the following question, “What has been the growth of direct cremation in the United States?“. Here’s part of the answer you will get:

“Direct cremation has experienced rapid growth in the U.S., driven by lower costs and shifting preferences, with some estimates placing it as the choice for 41% of all cremations in 2022, becoming the dominant form of disposition. . . . .The growth is accelerating, with analysts suggesting the U.S. is becoming a direct cremation nation. . .”

And, if you would ask Gemini Artificial Intelligence the following question, “What has been the growth of high-priced cemetery memorialization in the United States?” Here’s part of the answer you will get:

“High-priced cemetery memorialization in the US has experienced significant growth, with plot prices surging by an average of 65% between 2018 and 2024, far outpacing inflation. . . . .The high-end funeral segment, catering to a desire for exclusivity and personalized, experience-driven memorials, is expanding. This includes demand for private mausoleums, custom granite, and premium materials.”

Funeral Director Daily take — During my career which started during the beginning of the ramp-up to cremation, cemeteries were looked at almost as an afterthought. That’s where the dead were memorialized, somewhat out of necessity, with a burial space and monument. It was funeral homes that sold the services, casket, vault, and accounted for probably at least 75% of Death Care revenues split between the funeral home and cemetery.

Now, however, a growing number of people are asking for minimal services from a funeral home such as what is needed with Direct Cremation with no services. Then, a certain number of them are going to a cemetery and purchasing premium products such as columbariums, niches, cremation monuments, and even special locations, at a premium price within the cemetery.

Here’s a recent quote from an investment article about Service Corporation International (SCI). The writer, a layman investment advisor, seems to have captured the value of the SCI cemetery portfolio when he says:

“This is largely a simple business with almost certain demand, but SCI has a strong moat that makes it hard to displace, and that moat lies in its cemetery segment. In major cities like New York, Los Angeles, and Houston, building a new cemetery is extremely difficult due to land scarcity and strict zoning rules (besides, nobody wants a cemetery besides them). What this means is that SCI’s 499 existing cemeteries are in near-monopoly positions in their local markets. And since these burial spaces are limited and cannot be easily replenished, SCI naturally has growing pricing power over time, stemming from (1) increased death volume and (2) rising land cost. This is very different from funeral services, where barriers to entry are much lower. Funeral homes can basically be operated from standard commercial buildings, which makes it easier for new operators to enter the market.”

That statement is probably true of SCI’s cemeteries, but it could also be true of other existing independent cemeteries who also have this opportunity for, what I term, the growing “Cremation Aftermarket”.

The population of the United States is said to be about 345 million people today. Like American Express and Apple, who sell or service premium products, do cemeteries now have the luxury to “premiumize” their offerings and capture much higher margins on such. . . . while at the same time funeral homes and cremation companies are seeing their services, such as direct cremation, “commoditized” driving prices lower and lower for the consumers while the many competing operators compete for market share?

It’s an interesting thought.

Related — From the Hollywood Forever Cemetery website: Premium Memorialization and Funeral Services

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