Where will future revenue growth for the funeral industry come from?  That’s a thought that I have after I did a small study or exercise on growth revenues for certain industries.  While my study is not scientific I looked at selected companies to gain an idea of how well the respective industries are gaining revenue in the past six years — since a pre-pandemic time.

 

I used three public companies in each industry that I checked on — Death Care, Technology, Grocery, Retail, and Quick Service Restaurants (QSR).  I wanted to find out how “Top-Line” revenue in each industry had grown during that time.  The “Revenue” of three companies in each category were totaled to give a number that was then compared to the prior year number of each.

 

The companies that were used for the Death Care or Funeral Industry comparison were Service Corporation International (SCI), Carriage Services, and the Memorialization Segment of Matthews International.

 

I used the same type of thought process for the other four industries — one large leader (like SCI) and two smaller companies.  My results were interesting and because the revenue numbers between the categories varied greaty — such as a total of $5.4 billion in revenue for the three companies involved in Funeral Industry compared to $826 billion for the three companies in the Technology sector —  I suggest that you look at the graph line shifts from year-to-year rather than the segment revenue dollar amounts.

 

In my opinion, looking at the year-to-year revenue change gives some type of indication of how much revenue is flowing into each sector.

 

In my opinion, the results I found were very interesting. . . in some cases, in a comparative mode, positive for the Funeral Industry.  However, after you see the charts below I will tell you why I think there is some reason for concern in the Death Care profession.

 

First of all, some good news for funeral service.  If you simply look at the revenue growth from 2019 through 2024, you will find that the growth of revenue, on a comparative basis has grown more for the Funeral Industry than for either the “Grocery”  and “Retail” categories.  Here is the percentage revenue growth for the five categories from 2019 through 2024:

 

• Technology – 78.0%
• Quick Service Food – 37.6%
• Funeral Industry – 30.00%
• Grocery Industry – 26.0%
• Retail Industry – 25.3%

 

 

Companies Used — SCI, Carriage Services, Matthews International Memorial Segment

Quick Reaction:  Revenue increased 27.5% from 2019 to 2021 (Pandemic Years) but has increased a total of only 3.2% since.  In my opinion, Death Industry revenue seems to be “flatlining”. . . .Not a good sign.

 

 

Companies Used — Kroger, Sprouts, Albertsons

Quick Reaction:  Solid, annual growth.  Slowed to 1.8% in 2024 possibly because of inflation and customers looking to lower-cost alternatives.

 

 

Companies Used — Amazon, Verizon, Cisco.  (Stayed away from the high-flying chip business)

Quick Reaction:  Over 20% growth through 2020 (pandemic related).  Continual high growth although Verizon is flat as cell-phone technology is waning compared to other technologies.  Amazon grew a whopping 67.7% during the pandemic years (2019 thru 2021) more than likely stimulating growth in “online purchasing” in general. . . . In my opinion, this “online purchasing choice” will eventually affect traditional Death Care in some capactity.

 

Companies Used — McDonalds, Chipotle Mexican Grill, Yum Brands

Quick Reaction:  A pandemic related drop in revenues in 2020.  Growth is starting to grow.  It has possibly been restrained by staffing shortages and inflation.

 

Companies Used:  Wal-Mart, Kohls, Caseys Gas Stations

Quick Reaction:  Winners and Losers.  Department stores such as Kohl’s have actually lost top-line revenue.  Casey’s seems to shift depending on the price of gasoline.  Wal-Mart grew only 8.6% during the pandemic years, slowing their growth.  Considering the growth of Amazon, one might believe that universal “online shopping” is actually cutting into Wal-Mart’s growth.

 

Funeral Director Daily take:  This exercise was simply a non-scientific comparison of what in my mind was somewhat “comparable” companies in differing industries.  While I’ve given you a “Quick Reaction” of mine of each segment, your extrapolation of the data I have presented may be very different than mine and that is understandable.  Nobody’s perceptions and opinions are right or wrong. . .and are just that — perceptions and opinions and not fact.

 

“Where will future funeral industry revenues come from???” —  This question is probably the most concerning question to me after looking at the revenues of SCI, Carriage Services, and Matthews International Memorialization Segment.  In the business year of 2022 those three units had reported cumulative total top-line reported revenue of $5.31 billion.  Two years later the comparative number was $5.4 billion  —  in round numbers about $100 million more which is only about a 1.7% increase over two years. . . . . And in those same years you would guess that their inflation related costs were up by much more.

 

As Baby Boomers lose their lives it is expected that the number of deaths in the United States will rise  — funeral practitioners have been told that for years.  However, it appears to me that we are also reaching a point where American consumers are, on average, selecting services that bring in less revenue per case to funeral homes.

 

Death Care is somewhat unique as a product.  It’s a necessity that happens once to each human being.  Market share and customs might shift, but it is impossible to create a higher demand for the product — you can only die once.   And, as traditional funeral homes raise prices to cover always incurring inflationary costs some consumers choose lower priced services to counter those price increases.  So, in some equations, even if you do more services, actual revenue could be less because clientele may be choosing lower priced options.  It’s one reason that increasing revenue is getting tougher and tougher to find.

 

Couple that with the expanding options of Death Care in the niche fields of natural organic reduction, alkaline hydrolysis, and other areas such as non-funeral home operated memorial services and you can see why an increase in revenues might be hard to find in the future.

 

I think this thought process is a stark reminder to those in the traditional funeral and cremation business that while you have to continue to control expenses to maintain margins you also need to be looking out on your flanks and be concerned about the potential for the loss of, or at least, slower growth of revenue.

 

In my opinion, those can be sobering thoughts to traditional funeral home businesses that have a long history of high margins from the sale of traditional services and merchandise for decades.  Smart business management is necessary now more than ever before to keep the profits rolling in.

 

More news from the world of Death Care:

• Butte archive explores the burial practices of mining city immigrant populations with new exhibit.  Video news story and print article.  KXLF TV – Channel 4 – Butte (MT)
• City of Lawrence launches new cemetery website.  Lawrence (KS)
• Thieves steal mausoleum doors worth thousands from multiple cemeteries across the region.  WPVI TV (PA)
• Finding the cremated remains of loved ones in homes destroyed by wildfire.  Video news story.  Los Angeles Times (CA)

 

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