This year’s NFDA Cremation and Burial Report shined some light on interesting statistics and trends about the current state of funeral service — and where it’s heading. We’ve dug through the report and wanted to share the highlights that funeral directors need to know.
No surprise here, right? Cremation outnumbers burial already at a rate of 53.5% to 40.5%. In fact, it’s the third consecutive year that cremation rates have outpaced burials. That’s expected to increase a lot more in the future. In the next 20 years, data suggests the rate will increase by another 30%, according to the NFDA’s report.
In a press release, the NFDA said “the national cremation rate will reach nearly 80% (or 2.80 million cremations per year) by 2035, based on a variety of factors including changing consumer preference, weakening religious prohibitions and environmental concerns.”
Some areas will exceed that 80% mark much faster. 12 states (Colorado, Hawaii, Maine, Michigan, Minnesota, Montana, Nevada, New Hampshire, Oregon, Washington, Wisconsin and Wyoming) are expected to exceed the 80% cremation rate around 2025-2030.
Rising Cremation Impacting Funeral Home’s Bottom Line
The rising cremation rate is having a big impact on funeral service. As the NFDA report notes, “The increasing cremation rate has been the most significant challenge to the funeral service industry since cremation is performed at a much lower cost than burial. Cremation revenue is also limited because most funeral homes do not own a crematory and must contract the services of a third party.”
To cope with the loss of revenue, the report believes funeral home’s will begin to focus on offering more memorial products and specialized services to cater to families choosing cremation.
Few Families Aware of Options When Choosing Cremation
As more families choose cremation, it’s increasingly important for funeral homes to educate families about their options. As it stands, few are aware of all the options available. The report notes that only 26.9% of families were aware that they could have a full funeral service when to choosing cremation.
Funeral homes should prioritize educating families about their options. It’s one of the big reasons NFDA developed their Remembering A Life program. The program’s goal is to offer “guidance on how to start the planning process, the kinds of decisions consumers will make, and the many options available to make a tribute personal and meaningful.”
(For other resources on how to educate families about the importance of funeral service and the options available to them, make sure to subscribe to our newsletter and follow our blog!)
External Factors Influencing Funeral Service
Going beyond cremation, the 2018 Cremation and Burial Report found some other interesting statistics. Below are the highlights from the report.
- It’s expected the demand for services in the funeral profession will remain steady over the next five years, and even increase. The report cites the increasing death rates and aging Boomer population as the main reasons for a steady demand for funeral service. By 2030, the entirety of the Baby Boomer generation will be 65 and older. It also means for the first time in American history, there will be more older adults (65 and older) then there are children in the country.
- Per Capita Disposable Income is expected to increase at the average annual rate of 2.7%, which according to the report, should mean that consumer concerns about funeral costs should diminish.
- E-commerce sales will grow at an annual rate of 7.8%. This could either be good or bad news for funeral homes. If your funeral home already offers e-commerce and online sales of things like flowers and memorial products, then it’s good news. But if your funeral home only offers these things onsite, then it’s bad news. As the report notes, “major online retailers offer caskets, urns and memorial items and allow consumers to compare prices, which poses an increasing threat to the funeral service industry.”
To download and read a copy of the 2018 Cremation and Burial Report, click here.
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