Why you should care
The funeral business is in churn, but the big players aren’t hurting — they’re consolidating their monopoly.
In the Amish community, you — or someone you know — will build your coffin. It’s simple and plain, as you might expect from the Amish. Even if you’re not Amish, you can order one of their caskets online. Or a DIY kit that turns into a coffin, a woven willow box, one made of seagrass, or one painted with your favorite Monet landscape. You probably won’t order one online though, because most Americans don’t.
America’s funeral industry is in churn, with cremations now emerging as more popular than traditional burials. In 1980, less than 10 percent of the deceased in the U.S. were cremated. By 2018, 53 percent were being cremated, and the National Funeral Directors Association has estimated that by 2035 close to 80 percent of burials will be cremations. But unlike many other industries, the disruption isn’t throwing up new challenges for the traditional biggies of the coffin industry.
Instead, the sector is growing increasingly monopolized, riding on smart moves by the industry’s giants and factors specific to the way people behave when they’re grieving. In 2012, the four largest companies in the industry controlled 72 percent of the market, and that was before two of the so-called Big Three companies, Matthews International and Aurora Casket, merged in 2014. Today the two largest, Matthews and Batesville Casket (which is owned by funeral behemoth Hillenbrand) control 82 percent of the market. That puts it in the top 10 most-consolidated industries tracked by the watchdog Open Markets Institute — more consolidated than domestic airlines or the mattress industry.
Mostly people go somewhere nearby [for coffins], or wherever their family has always gone.
Virginia Beard, associate professor, Longwood University
That growing concentration of market share in the hands of two companies — Hillenbrand controls 47 percent and Matthews 35 percent — builds on an already dwindling list of competitors, owing to lower demand. Estimates from the Casket & Funeral Supply Association of America indicate that there were more than 700 casket manufacturers in the U.S. in the early 1950s and tens of thousands of employees. By 2012, according to the Census Bureau, that was down to 60 firms and 3,200 employees. Today, the size of the coffins and caskets market is $550 million, down from $700 million in 2014.
But that decline has helped Hillenbrand and Matthews, which have marginally increased their revenues from 2014 by adapting in time: Today they offer cremation services, online consulting and other services, maintaining their revenues, even as smaller firms have been pushed off the map. Representatives from Hillenbrand declined to comment for this article, and queries to Matthews by phone and email were not returned.
What’s also aiding them is that even with the growing popularity of cremations, there’s still a need for caskets: Cremated bodies still need to be enclosed somehow, and that’s normally in some sort of box. While often a flimsy leakproof cardboard box will suffice, some people choose to have their loved ones incinerated in sturdier display coffins, or use one for a viewing before the person is cremated.
The monopolization of the industry is also being facilitated by the fundamental nature of the funeral industry, say experts. As with weddings, emotions are running high while buyers are shopping, and nearly everyone is inexperienced in the market. But unlike weddings, there’s often little opportunity to plan — and when there is, consumers may not want to, choosing instead to avoid confronting mortality — and once funeral services are needed there’s often a time pressure. While so-called “pre-need planning” is becoming slightly more popular — 21 percent of people in 2017 said they were planning their own funerals, up from 19 percent in 2014 — that’s still far below the 63 percent who acknowledge such planning is important. When you’re under pressure to buy something, you’re likeliest to go with the biggest, established brands in the business.
“We still have a large segment of people who don’t shop around and don’t plan,” explains Virginia Beard, an associate professor at Longwood University whose research focuses on the funeral industry. “Mostly, people go somewhere nearby, or wherever their family has always gone.”
Outside the U.S., regulations — and traditions — vary widely. While an estimated 77 percent of bodies in the U.K. are cremated, meaning the coffin market is far smaller, artisans and small independent producers say they have some space to make a greater dent in the market than in the U.S. “We make stuff by hand, one person makes one coffin,” says Ursula Williams of the U.K.’s Crazy Coffins, where two dozen artisans build handmade coffins, including wild fantasy one-offs shaped like ballet shoes or luggage or cars. These special orders can take weeks to make and cost more than 50 times that of a standard handmade coffin.
But when it comes to coffins, cost isn’t the only logistical barrier to entry. “It mainly has to do with logistics: How do you get an empty box from a factory to the place of use,” explains Dingco Geijtenbeek, founder and designer of Netherlands-based Coffin in a Box. Coffin manufacturers don’t just make the coffins; they have systems in place to get the unwieldy boxes to funeral homes swiftly and representatives to sell their product. Funeral homes make a profit on each coffin they sell, meaning the coffin manufacturer with the lowest wholesale pricing will have an advantage, even though, by law, funeral homes must accept caskets from outside suppliers if consumers ask for them.
“You can only meet those pricing pressures if you have a huge volume,” says Geijtenbeek. “And any new company starting with a new coffin concept, they can’t start with 20,000 coffins a year.”
Coffin in a Box ships flat-packed coffins for $370 (plus shipping) via traditional companies like DHL, and consumers assemble them themselves, like Ikea furniture. While most of its market is in Europe, Geijtenbeek says he can and does ship to North America. But the market of people who want to assemble a coffin themselves is small — those who want to personalize and decorate the coffin or hope to reduce the carbon footprint of death. Coffin in a Box claims its process reduces the carbon emissions associated with making and transporting a coffin by 80 percent.
To be sure, there have been tiny breakthroughs in the coffin monopoly. Caskets are now available at Walmart and Costco for around $1,000 each — half the reported median cost for a casket, according to the Federal Trade Commission. Small artisans are also a tiny part of the market, like Colorado’s Nature’s Caskets or overseas options like Coffin in a Box. In 2013, the case of a group of monks in Louisiana who were selling their handmade coffins to the chagrin of funeral directors went all the way to the Supreme Court, and the monks won.
And the coffin and caskets market itself continues to face challenges. Beard predicts that in 50 years 90 percent of bodies will be cremated. Part of that is due to cost — the economic toll that comes with burial. But another factor, she says, is that “people don’t stay in place anymore.” Past generations who established a family cemetery stayed on the same land or in the same town, able to easily visit the headstones of their ancestors. With increased mobility, scattering ashes starts to look like a more attractive option than burial in a place where you may never return.
Still, the ability of the industry giants to strengthen their duopoly despite these challenges demonstrates why displacing their market share won’t be easy. Not even in death.