Grave Expectations

Posted on May 1, 2010 :: Features
Posted by , Insight on Business Staff Writer

A rise in cremations impacts the funeral industry

Is there such a thing as a recession-proof job? Some jokingly have said the funeral industry is one such career. But in light of changing trends – most notably the marked increase in cremation rate – funeral homes, cemeteries and others in the death care industry are facing challenges and seeking solutions.

According to the Cremation Association of North America (CANA), the 2007 national cremation rate was 35 percent, and it’s projected to rise to 58 percent by 2025.
Julie Burn, director of cremation services for the International Cemetery, Cremation and Funeral Association (ICCFA), believes those projections are accurate.

“What really was driving a lot of cremation in 2009 was the state of the economy because cremation is less expensive,” she says. “Cost is still the No. 1 reason why people would choose cremation.” Others, she said, find it more environmentally friendly; some consider it a “simpler” option.

Statewide, most counties follow that trend. According to state health department figures, Brown County had a 32.4 percent cremation rate in 2007, Outagamie was at 35.8 percent. Door County, perhaps due to available burial land, had one of Northeast Wisconsin’s highest rates at 46.8 percent.

At Lyndahl Funeral Home and Cremation Services in Green Bay, funeral director/owner Michael Kane says his firm’s cremation rate, now at 40 percent, has more than doubled in 18 years. He attributes that increase to both a more transient society as well as economic reasons.

Most direct cremations – in which there is no embalming, memorial service or other extras – cost far less than traditional funerals. According to the latest numbers from the National Funeral Directors Association (NFDA), a funeral averages around $7,300 (not including extras such as flowers, obituaries and cemetery/monument expenses, which could add several thousand dollars). Direct cremation (disposition only, with no services) might average $1,500, according to Burn.

Wichmann and Fargo Funeral Homes, with five locations in the Fox Valley area, serve about 700 families each year. With their cremation rate at about 45 percent, it’s nearing the point where just as many people select cremation as burial or entombment.

“It’s a slow and steady increase” of 1 to 2 percent each year, says owner Dan Densow.
“By far, the reason why people select cremation … is just their own comfort level,” he says. “This is the generation of families who want it ‘their way.’ I’m a firm believer that the trend will grow.”

Wichmann installed a crematory retort (furnace) in the late 1970s, and Densow believes it may have been one of the first funeral homes in the state to do so. Prior to that, most retorts were owned and operated by cemeteries.

The move proved rather prescient, since Densow estimated the cremation rate then was less than 20 percent. “Very few people selected cremation at that point,” he says.
The challenge of cremation

While the rise in cremation does have financial ramifications for funeral directors, their true challenge is finding ways to serve clients in a meaningful way. To that end, funeral directors are taking on a new role: educator.

“People assume cremation and they don’t think anything else about it, [but] cremation is just a final disposition,” says Burn.

“That is the No. 1 challenge that we are facing in the industry,” she adds, “to help educate families on the value of having a meaningful tribute, a celebration of life.”

And that’s not always an easy task in an industry that has proven somewhat resistant to change. “Funeral directors were pretty reluctant to realize the trend was happening,” admits Burn. “Some funeral directors even were more interested in talking people out of it [cremation].
“They [now] realize that this is happening and if they want to provide meaningful services and not lose a lot of money, they’ve got to do this stuff,” says Burn, who, through the ICCFA, now offers a cremation arranger certification program to help funeral directors address this trend.
Densow says at Wichmann, about 90 percent of those who selected cremation in 2009 asked for a memorialization service.

“It really doesn’t matter what the final disposition of the body is [burial or cremation],” Densow says. “It’s what happens before that matters. We should be the ones who are catalysts for the beginning of a meaningful grieving process.”

Funeral homes aren’t the only ones feeling the impact of cremation. According to the Casket and Funeral Supply Association of America, annual U.S. casket sales peaked by volume at 1.9 million caskets in 2000. For the 12 months through September 2009, however, sales totaled only 1.69 million.

Likewise, cemeteries are affected as families choose to keep or scatter cremains, rather than bury them or entomb them.

According to Christine Toson Hentges, vice president of cemeteries at The Tribute Companies, which owns Fort Howard Memorial Park in Green Bay, “We need to have a whole different spin on this. We have seen our burial rates increase – when it comes to cremation – but we know the majority of families are not coming to the cemetery. We’re trying to get out there and show people there is another alternative.

“We need to let them know what their options are,” she says. At the historic 90-acre Fort Howard, for example, those options include underground burial of cremains or entombment in a mausoleum niche; the latter is selected by about 75 percent of families who choose cremation, Toson Hentges says.

Education may not be what many funeral homes and cemeteries are used to – after all, death is inevitable and their services will likely always be needed. But proactivity has become the key for those in the death industry to survive, so to speak, in a rapidly changing world.
“We have to do more for people to see value in what we do,” says Kane. “Whether it’s a funeral or a memorial service, you have one chance to get it right.”