Posted in Finance Articles, Total Reads: 1746
, Published on 18 October 2011
Egypt, 1300 BC. A slave shackled to heavy chains hauls a giant stone across the desert. The sun beats down on him, the temperature soaring to above 60 degrees as his throat dries up and his muscles give up. But there is no respite: The royal guards with huge whips patrolling on their horses make sure that there is not a moment of slack. He is not the only one in this deluge. There are thousands like him; chained, thirsty and dying but toiling to build a structure that the world would marvel upon for centuries to come. The reason for this huge spending and suffering: To build a “house of eternity” that would house the Ruler of Egypt, the young Pharaoh Tutankhamen after his passage to afterlife where he would rest in peace forever.
New York City, 2011. Tim Henan steps out of his BMW and walks straight into the SCI Corp. office in downtown New York. He is an entrepreneur; a product of the dot com boom that has turned this computer geek into a millionaire faster than he could decrypt algorithms. The gist of the meeting with the meeting has already been communicated in advance. He is here to just to clarify a few minute details and preferences. As strange as it may seem, the reason for this visit is fundamentally the same as what the “boy king” had wished for Three and a half thousand years ago: to find himself a safe abode at the end of this mortal life.
Times change, religion changes and so do people and their lifestyles, but the only certainty about each one of our lives continues to be its end and the affixation of the human mind to explore and secure what lies beyond it; And that is exactly where the multi-billion dollar Death care Industry steps in.
In today’s world everything is commercialized, even burials. The burial industry better known as the Death care Industry or the Funeral Service Industry in more sophisticated business terms is a booming industry with a revenue of $25 billion-a-year in US alone. About 2 million people each year contract with Funeral Service providing companies spending an average of $7500 per funeral that ensure that the last rites of their beloved or themselves are performed and managed according to their wishes complete to the last detail.
Origins and Transformation:
Until the 20th century, funerals in the U.S were organized by family and neighbors and held at home. People were often buried on family property. As communities became larger and societies grew, common cemeteries began to be used and led to the development of several unorganized and fragmented industries: Funeral Homes or cemeteries sold burial space and merchandize while there were independent providers of memorials, flowers and caskets. The development of the US economy post the WW-II resulted in the evolution of massive organized industries in many sectors and the Death-Care industry was no exception. The aforementioned boundaries started dissolving as large profit oriented chain organizations started buying out local funeral homes and consolidating the industry to provide highly specialized one stop service to their customers in their darkest hours.
The funeral service providing companies, once contracted, take over the entire mantle of responsibilities for the proceedings after the death of a person. The basic activities start from helping and counseling the family with the post mortem procedures of collecting death certificates and contacting Insurance companies. The traditional processes related with the ceremony start with the process of embalming which is a process to forestall decomposition and to make the corpse suitable for public display at the funeral ceremony. The body is then conveyed to the “House of God” for ritual ceremonies and Mass and then to the Funeral Ground before being laid to rest as mourners and family members pays their last respects subsequently followed by a farewell party and gathering of family and friends. All of this can be supplemented by, as per the wishes of the deceased or his family, organ donation, memorial creation and several other celebrations that can be as unique and memorable as the life it honors. A lifelong recreational fisherman, Eddie had wished that following a traditional chapel service at the family funeral home his friends and family continue the celebration of his life with an afternoon of fishing, dining and sharing stories at his family getaway house on the lake where he spent his weekends and summers.
This is the kind of personal touch and warmth that the funeral service industry is offering: from releasing butterflies to customized caskets and cherished - this service industry promises to fulfill all its customer wishes however minute and insignificant they might apparently seem…… after all it’s their very last.
Now a days the ambit of the death care industry transcends the conventional “primary services” to facilitate the smooth transition of the lives of friends and family who are left without their loved one. Funeral services offer an expanded array of personalized services ranging from memorials conducted over the Web, grief counseling, support groups, community referrals, estate-planning assistance, and even discounted airline tickets for funeral participants to attend the funeral.
Of all the services and comfort that the Death care companies provide to their customers, the most fascinating and insightful is what is called the Pre-need service. As the name suggests, it is about planning your own funeral in advance and it brings out an individual’s deepest thoughts; his most cherished feelings and the way he would want the world to remember him once he is no more. Some prefer a traditional ceremony, while others prefer a celebration of the fond memories by their closest souls while others still take it to exorbitant and unusual levels. Whatever be mode, the funeral celebration can stand out as the boldest and definitive statement a person can make about himself and that is the sole reason why the numbers of Pre-need customers continue to rise. Thus the Death Care Industry is one of trust and the faith that an individual has on his Funeral Service provider to provide just what he had asked for although he himself would not be there to assure its correctness.
Prospects and Projections:
In the United States this year, about 2.6 million Americans will die and the number is forecasted to rise at about 2% every year till about 2040. Although this is cause for mourning and gloom for most people, the death care industry smells a huge opportunity in it. The greatest comforting factor for the death care industry rests on this very fact as it has always ensured a steadily increasing revenue stream over the years as is evident from the revenues of Service Corporation International (SCI), the largest player in the industry which has now extended its operation to include large parts of Europe as well through brisk acquisition and mergers with several smaller industry players.
The Biggest trend to hit the American death care industry over the last 10 years is the growth of cremation as an alternative to burial. Industry experts believe that the change in views is a result of less religious stigma associated with cremation which provides a faster and less somber process than the later. Although changes like these continue, the larger industry players are trying to guard themselves against fluctuating revenues by means of backward integration and swift price rises.
“We believe we can grow our existing businesses by centralization and standardization of our processes. This includes aligning pre-need and pricing strategies with customer segments and expanding customer segments in which we excel” –SCI Statement on May10, 2006
Criticism and Conclusion:
Amid the huge growth of business, the industry has been plagued with criticisms as well. Darryl J. Roberts, a thirty year veteran of the industry, in his book “The Profits of Death” had uncovered how the greed of the death care industry manipulates consumers into overspending at the most vulnerable time of their lives. The aggressive marketing strategies along with the swift rise in Funeral costs have only fuelled these allegations. Some might think of it as an infringement of business on age-old sacred customs and thus an onslaught on human dignity and propriety but he trend seems to continue. With the Big players of the U.S. funeral industry controlling over 25% of the market and expanding continuously by entering new pastures of different communities and countries, the death business is alive and flourishing.
References: Wikipedia, Forbes Magazine, www.findarticles.com, www.profitsofdeath.com, several other websites.