Some Independent Firms Go Under : Tough Times in Casket-Making Business
In some professions, burying the competition gets harder each year.
Just ask Robert B. Johnston, president of S&S; Casket Co. of Glendale.
Never mind that S&S; is the largest independent coffin maker on the West Coast. Or that over the years, Johnston has bought out four competitors, marketed aggressively to funeral home giants such as Forest Lawn Mortuary and built a business that employs 100 people and churns out more than 20,000 bronze, fiberglass, mahogany and pinewood boxes each year.
The $727-million-a-year wholesale casket industry is roiling with changes these days, and even comfortably established companies like S&S; are anxious.
“We don’t know what’s going to happen . . . we’re taking a wait-and-see attitude,” the 64-year-old Johnston said grimly.
Nationwide, independent casket makers are a diminishing breed. Of 650 companies in 1965, almost half have gone belly up or been acquired, according to George Lemke, executive director of the Casket Manufacturers Assn. of America, a trade group.
It is happening as well in the Southland, where independent, family-owned casket manufacturers say their ranks have shrunk from 16 to four in recent years. The survivors are S&S;, Golden State Casket Co. of Los Angeles, Inland Casket Co. of Riverside and Westwood Casket Co. in San Bernardino.
But they are small fry compared to the industry’s two giants, Batesville Casket Co. in Batesville, Ind., and Amedco Inc. in Springfield, Ill. Between them, those two produce about 80% of the 1.8 million or so caskets made each year, according to Abraham Karp, who follows the funeral industry for the New York securities firm of Purcell, Graham & Co.
Both are owned by parent companies that have acquired funeral homes or insurance companies specializing in “pre-need” funeral arrangements. Analysts say such vertical integration is a growing trend.
This year, for instance, Service Corporation International, the country’s largest funeral home company, bought Amedco, the country’s second-largest coffin manufacturer.
Fear of Being Locked Out
It is mergers like this that make independent coffin manufacturers like S&S; fear that they might someday be locked out of the business.
“You’re probably going to see considerable disruption in the marketplace,” predicted Jules Marx, who follows the funeral industry for the New York securities firm D. H. Blair & Co. “When you integrate in a vertical manner . . . it disrupts the alliance between the manufacturer and the distributor, in this case the small coffin manufacturer.”
The coffin business has also been affected by sweeping changes in the entire funeral industry. More and more people today opt to plan and pay for their burials in advance; cremation is increasingly popular and people are said to be spending less on funerals.
The trend toward less expensive funerals or cremations has hurt the funeral industry, says Ron Hast, publisher of Mortuary Management, a national trade magazine. Gone are the days when relatives routinely lavished large sums on funerals, and cremation was favored only by obscure religious sects and eccentric Aunt Mildred. Funeral costs nevertheless average $2,700 today, according to the National Funeral Director’s Assn. of America.
Cremation is increasingly popular, especially on the West Coast, where it was the choice for 36% of those who died in 1985, according to the Cremation Assn. of North America. The association estimates cremations on the West Coast will soar to 60% by the year 2000. Nationwide, the figure is lower, although it has also doubled in 10 years: Cremations accounted for 14% of all funerals in 1985, up from 7% in 1975.
“It has definitely had an impact,” said Marshall Conzevoy, vice president of Golden State Casket, which produces about 15,000 coffins annually.
While the overwhelming majority of burials are still arranged through funeral homes, several retail stores around the country sell coffins directly to the public, and some customers even bring their coffins home ahead of time to use as coffee tables, bookshelves or wine racks.
Explains Assembly
Johnston is effusive about the business. Leading a visitor through his Glendale plant, he explained how workers assembled and welded the metal caskets and pointed out finished models that lay solemnly on metal racks, wrapped in bubble plastic or thick cloth.
Among the more specialized requests: all-wood caskets for Orthodox Jews, whose religion forbids caskets that contain nails or metal hinges. Thus the coffins are hand-tooled and fitted together using wooden dowels.
Then there are futuristic-looking bronze caskets (S&S;’ most expensive model), low-end caskets whose cloth coverings concealed inexpensive particle board, steel caskets, which account for 50% of all sales, and sleek, painted fiberglass, which is favored by the sporting crowd, Johnston said.
“Pastels are very popular these days,” he noted, as two laborers sprayed peach-colored paint over a metal coffin.
So are ornamental metal moldings in the shape of praying hands, flowers and religious symbols that affix to the coffin’s exterior. S&S; also provides cushy interiors that range from satin to crepe and velvet, Johnston said, pulling out a material swatch that his four sales representatives use on business calls.
Request Speacial Designs
Neither is it uncommon for funeral home clients to request special emblems or designs on the inside of the coffin. Roses and pictures of the Virgin Mary are popular items, he said.
Metal caskets are manufactured at S&S;’ Glendale plant, in an industrial complex on the northwest side of the city. The Southgate factory produces the wooden caskets, including a number of made-to-order requests.
Johnston says S&S; specializes in custom-designed coffins and will make whatever the customer wants. “We’ve even put a reproduction of the Last Supper on the inside panel,” he recalled.
Johnston says the most unusual request came from a car buff who owned an antique auto painted an unusual shade of sky blue. He requested the same color for his coffin, so Johnston dutifully trekked over to General Motors and found the color.
Hast of Mortuary Management points out that most independents offer specialized services to compete with Batesville and Amedco. Pettigrew & Sons Casket Co. in Sacramento, for instance, makes only 5,000 caskets a year but is known throughout the industry for its craftsmanship and quality, he said.
Within the funeral industry--especially the smaller, privately held companies, owners traditionally have been closed-lipped about profits. An employee of Westwood Casket Co. in San Bernardino refused to give his name or discuss annual production and profits. At Inland Casket Co., Vice President Ron Fishering also declined to give annual sales figures.
Johnston estimated that S&S; makes between 20,000 and 23,000 caskets annually. Although he won’t reveal sales or profits, wholesale prices for caskets average $410, with prices ranging from $95 for particle board to $5,000 or more for bronze deposit caskets, according to Lemke of the Casket Manufacturers Assn. Industry experts say profit margins range from 3% to 5%.
Acquired Four Other Firms
Johnston, a self-described workaholic who works 12-hour days six days a week, followed his family into the funeral business. His father was a casket salesman for the defunct West Coast Casket Co. in Los Angeles, and Johnston began working odd jobs there during summer holidays from college. When casket demand boomed during World War II, Johnston left school to become a full-time employee and soon worked his way up from purchasing to plant manager.
In 1952, he decided to take over San Fernando Casket Co., going in as a minority partner with several friends. Several years later, he bought them out. Over the years, Johnston acquired four other local casket companies, he said, including the purchase of Southgate Casket Co. six years ago. The company’s former owner, Alexander Folb, became minority partner and vice president of S&S.;
Johnston says that occasionally someone will still look at him a little strangely when he tells them what he does for a living.
“People think it’s morbid,” he said. “I’ve had people follow me around at parties and ask how I can work in a business that preys on other people’s suffering. They don’t understand it’s a business like anything else.”
