Aug. 6, 2006
By LISA TAKEUCHI CULLEN
Opening the Box: Cremation, competition and consumer demands are reshaping the casket industry. Can it survive?
In the spring of 2005, a glossy black trailer 53 ft. long began wending its way on a national tour. It contains a singular exhibit: the latest and coolest in casket designs from the country's leading manufacturer, Batesville. The exhibit opens with the Maserati of departure vehicles--the 540-lb., $18,500 Marsellus 700 Masterpiece.
Although the Marsellus defines tradition (Ronald Reagan was buried in one, but then so was the Notorious B.I.G.), what follows focuses on the four trends that have rocked the casket industry: obesity, personalization, cost competition and cremation. Local funeral directors wandering through the exhibit examine the politely titled Dimensions line, launched in 2004 to accommodate an increasingly beefier populace.
Nearby they view a display of LifeSymbols--knickknacks affixed to casket corners to signify that the occupant was, say, a fishing enthusiast. The undertakers marvel at a new line of less costly but still handsome caskets that uses--gasp--wood veneer. Finally, they admire urns and cremation jewelry, which prove that even casketmakers can't ignore the fact that more than a quarter of dead Americans wind up as ashes.
Demographically speaking, the future looks bright for the $3.5 billion casket industry. Over the next 20 years, the baby-boom generation, despite its considerable efforts to the contrary, will start to meet mortality, swelling the death rate in the U.S. from 2.4 million a year to 3.2 million. By 2040, annual deaths are forecast to hit 4.1 million. You'd think the big casketmakers--Batesville, York and Aurora, which together produce at least 70% of all caskets sold in the U.S.--would be resting easy.
You'd be wrong. About three-quarters of Americans make their final exit via a casket, according to the Casket & Funeral Supply Association. That will change. The Cremation Association of North America predicts that by 2025, nearly half of deaths will end in cremation. While 13% of cremations involve the use of a casket (some families choose, often at their funeral directors' urging, to conduct a traditional viewing of their loved ones before cremating their bodies), families are increasingly less likely to shell out thousands of dollars for a box destined for the incinerator. To make matters worse, that shrinking market is also sought by a growing number of competitors: discounters, Chinese imports and independent craftsmen who ply their wares directly to consumers via storefronts or the Web. Add the rising costs of steel and lumber, and you begin to hear the opening lines of an industry requiem.
Or maybe not. For now, rumors of the casket's death are somewhat exaggerated. The normally stiff industry is offering consumers a wider range of options, from customized doodads to cheaper models to online window shopping. With families still paying $2,000 to $2,500 on average for a casket--a third of the average bill for the total funeral, which the National Funeral Directors Association says was $6,500 in 2004--there's still plenty of money in building boxes for burial.
Batesville is counting on that. Founded in 1884, Batesville Casket Co.--named for its hometown in Indiana--adopted Toyota's vaunted manufacturing techniques in the 1990s to improve quality, speed delivery and reduce costs. Today the unit of $1.3 billion Hillenbrand Industries (which also makes medical equipment) says it completes one casket every 53 seconds and delivers it usually within 48 hours. Batesville offers 600 casket designs in 150 color combinations and 30 shapes. Although it owns 45% of the market, even the casket leader can no longer take that position for granted. Time was, funeral directors flocked to Indiana to tour its factories. Today the company must also rely on its touring trailer and lavish exhibits at funeral conventions to solicit business.
For the consumer, the problem with buying a casket is that nobody wants to do so until the need arises--and by then it's simplest to purchase one through the funeral home.
Consumer watchdogs say some funeral homes regularly inflate prices on caskets and mislead families into believing they may not shop elsewhere, despite a 1984 ruling by the Federal Trade Commission that explicitly states they may. (A class action was filed in 2005 by the Funeral Consumers Alliance that charged Batesville with conspiring with the big funeral-service chains. Batesville will not comment on pending litigation.)
A growing number of entrepreneurs--end-trepreneurs?--are shaking up that model by going directly to consumers. Costco introduced caskets in 2004. Competitive Caskets, a small store in Clifton, N.J., solicits passersby with a bright green awning: 50%--70% OFF; FUNERAL HOMES MUST ACCEPT OUR CASKETS. Bob and Jenny Boots of Eagle Custom Caskets have found their motorcycle-loving niche online. Ernie Wolfe, an art-gallery owner in Los Angeles, markets his Ghanaian-made caskets as art.
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