American Casket Coffins

The industry was significantly affected. While cloth-covered caskets could be produced at nearly any facility with limited capital requirements, metal caskets require a greater investment in stamping, bending, cutting, grinding and painting equipment. Changes in product demand, cost of capital, and development of companies with national distribution systems in the late 1960s and 1970s significantly affected what had been a local and regional industry. Massive consolidation occurred in the industry.

Small manufacturers found it difficult to compete effectively. By 1967, the Census of Manufacturers reported that there were only 523 in the casket industry, with employment of 16,800. In 1992, the Census of Manufacturers reported 211 producers in the industry, with employment of 7,800.

The Casket and Funeral Supply Association suggests that industry employment is less than 9,000 and that the total number of entities, including many small distributors, serving funeral directors is less than 300 in 1997.

In 1996, seven companies manufactured metal casket components (tops, ends, bottoms and sides) for their own use, while several others manufacture for casket manufacturers. The total metal casket market in 1996 was estimated at about 1.3 million units, including 20-, 18- and 16-gauge steel products, stainless steel, and copper or bronze caskets.

While several primary casket manufacturers build their own hardware and make their own interior designs and panels, a few provide decorative and functional hardware for the remaining casket manufacturers. Another small group provides interior materials (cloth and specially designed interior panels) for the casket industry, although many manufacturers and some distributors manufacture, sew and install their own interior cloth linings, bed and pillow covers, and head and foot panels.

National Casket Co. and Boyertown Casket Company, in the 1960s, were the first publicly traded companies on the Philadelphia and New York stock exchanges, respectively. In the early 1970s, Hillenbrand Industries, which owns Batesville Casket Co., became a publicly held company [NYSE]. Gulf & Western Corp., from the late 1970s until 1982, owned several casket companies. It divested its casket industry assets in 1982 to AMEDCO, Inc. which traded on the NASDAQ exchange. AMEDCO was sold in 1986 to Service Corporation International [SCI: NYSE) and became known as the funeral supply division of SCI, which later acquired the assets of Boyertown Casket Co. In 1990, SCI divested itself of the funeral supply division. Casket production assets were acquired by private investors who renamed the division The York Group, Inc. With a public offering of stock in April, 1996, The York Group joined Hillenbrand Industries as the only remaining publicly traded companies with interests in casket manufacturing.

Casket manufacturing is concentrated among a few companies. The Casket & Funeral Supply Association estimates that a dozen or so companies manufacture more than 90% of all metal caskets, although some 30 companies assemble metal caskets. Hardwood caskets are manufactured by about a dozen companies. Another 10 or so companies occasionally manufacture some although casket manufacturing is not their primary business.

In the 1950s, almost every casket company manufactured cloth-covered caskets. Today, there are no more than 30-35 companies manufacturing such products. Most of these companies manufacture for local markets. Several companies manufacture most of this product line with regional or national distribution.

Because production is concentrated, most caskets tend to be standard products. Smaller manufacturers continue to produce custom products for their customers. In addition, many distributors offer custom products with installation of special exterior hardware and interior panels.

Entry Requirements: In 1982, the Federal Trade Commission noted that casket manufacturing was a concentrated industry with large capital investment required for entry into the business. Since then, entry costs have increased significantly. A complete set of dies to manufacture a casket shell could cost as much as $1 million, not counting the cost for the necessary stamping equipment. Similar investments are required in the hardwood segment of the industry, where primary manufacturers buy rough lumber, air and kiln dry it themselves and invest in material handling equipment, dust collection and management systems, etc., as well as all the other equipment associated with large woodworking operations.

Further complicating entry into the industry are discounting practices and demands that reduce available margins needed to recover capital costs. Large publicly traded funeral home chains demand discounts from their suppliers and similar demands are increasingly made by other customers. While several large manufacturers are able to comply with the demand for discounts and special product lines, it is difficult for most industry entities to meet those demands. New entrants find it even more difficult to compete, given the capital cost associated with developing a new business in casket manufacturing.

The Market: Although it would seem that the market for caskets should grow as the number of deaths increases due to an aging population, this is not the case. The market is limited to total deaths minus body donations and casketless cremations. Casket manufacturing was confronted with a declining market in the 1970s, when health-care improvements and the availability of antibiotics resulted in a decline in deaths. Increasing cremation rates since 1980 have created a stable to declining market for the last 15 years. Total casket production in 1996 is estimated at less than 1.85 million units, including 60,000 containers specifically designed for use in cremation. In 1980, sales were estimated at 1.8 million caskets.

The Cremation Association of North America (Chicago, IL) projects that cremations will continue to increase during the next 15 years. As a result, the market for traditional funerals and caskets may decline. The use of cremation containers and ceremonial caskets designed for cremation may maintain the market at current or nominally higher levels.

The “zero growth” environment was and is a factor in the industry’s consolidation. New business may be obtained only by taking it from a competitor. Such competition reduces profitability and increases business risk for all industry members, and especially for companies where capitalization or market positioning may be less than optimal.

Caskets and cremation containers come in a wide variety of materials, designs and costs. The type of casket or ceremonial cremation container selected will determine its value and cost. Generally, types of caskets and cost/prices range from least to most expensive caskets to buy according in these types: