The funeral market - Italy (2024)

1.2 The global market for funeral services

In the context of COVID-**, the global funeral care services market was estimated to be worth $**.* billion in **** and is expected to reach a revised size of $*** billion by ****, growing at a CAGR of *.*% during ****-****[***].

Global funeral market revenues World, ****-****, in billions of dollars Source: ****

There were **.* million deaths worldwide in ****, a figure slightly lower than ****, when there were **.** [***].

In general, we are talking about a mature industry in which revenues are determined by mortality, differential price increases, product mix, and general economic conditions.

1.3 The Italian funeral services market

The business of funeral services in Italy is slowly increasing in number and is expected to grow steadily over at least the next decade. This trend has been reflected in the annual turnover of funeral homes in Italy, which increased after **** by *.* billion, recovering from the financial crisis until reaching a peak in **** (***) due to increased demand[***].

Revenues of funeral and related enterprises Italy, ****-****, in billions of euros Source: Istat As for total household spending on funeral services, an increase is shown between **** and ****. Specifically, during the period analyzed, total spending increased from *.** billion euros in **** to *.** billion euros in ****, representing an increase of **.*%. Although the general trend indicates an increase in total spending, the values recorded in each of the years analyzed are swinging as they are closely related to the trend in the number of deaths recorded. In **** there is a peak in spending (***) and related to the outbreak of the pandemic.

Total population spending on funeral services Italy, ****-****, in billions of euros Istat

1.4 Impact of COVID-19

the COVID-** pandemic has inevitably affected the funeral market in Italy as elsewhere in the world. However, restrictions and the inability to gather too many people in an enclosed space due to social distance have changed the market significantly, and all companies active in this field have had to adapt their services to cope with such an increase in demand at such a difficult and unexpected time

To better understand the impact of the health crisis on this market, it is necessary to take a look at the number of deaths in Italy at the peak of the pandemic, that is, between March and April ****.

Number of deaths between March and April **** compared to the average for the same period for the years ****/****. Italy, ****-**** and ****, in number of deaths Source: ****

As the graph shows, the number of deaths between March and April **** was significantly higher than the average for the same period between the year **** and ****. In terms of the funeral market in Italy, this represents a significant increase in demand. Deaths from the first wave of COVID-** were mainly concentrated in the northern regions of the country, but as the second wave arrived, they redistributed throughout the country. This ...

2.1 Determinants of demand

To quantify the importance and size of the funeral market in Italy, it is necessary to conduct a demographic analysis, with particular attention to mortality rates, which inevitably are a driver of demand for this market moving in the same direction. In addition, the age distribution and median age of the Italian population are also important factors to consider in order to better understand this market and its customers.

Regarding the number of deaths recorded annually, there is a sustained growth in values between **** and ****. During the period analyzed, the number of deaths recorded annually increased from ***,*** in **** to ***,*** in ****, representing an increase of **.*%. The increase in the number of deaths thus suggests an increase in the demand for funeral services in Italy.

Evolution of the number of deaths Italy, ****-****, in thousands Istat

The Italian population is composed of about ** million people, distributed in ** regions (***), under the significant effect of declining birth rates and increasing life expectancy, which has led to an increase in the percentage life expectancy of people aged ** or older to **.*%, as shown in the graph below.

Italian population distribution Italy, ****-****, as a percentage of population Source: ****

In addition, long-term forecasts of the median age (***) in ...

2.2 Customer demand and characteristics

Demand for funeral services is generally considered inelastic, although not recession-proof. Activity tends to be steady, but with a degree of seasonality, with revenues and profits higher in the winter months when cases of influenza and pneumonia are more prevalent. While the funeral service industry is stable and its long-term prospects are buoyed by the aging baby boomer generation, it still faces some challenges, as noted above, mainly related to the increasing shift toward cremations, which generally produce lower revenue than traditional funerals, and the demands for personalization that clients are increasingly asking for in an effort to create a ceremony that is more "true to them"[***]. In this regard, since replacement costs are really low in this industry, as a customer can move from one funeral home to another at no cost, the determining factors for customers in this market are value for money and professionalism of service, as well as the human factor, which is represented by an increased demand for personalization of the ceremony.

Funerals can be considered a service that everyone will need to access at some point. Therefore, the number of clients in this sector is high, even considering the continuous increase in mortality rates that ...

2.3 Geographical distribution of demand

In order to visualize the geographic distribution of the demand for funeral services in Italy, two maps were created: the first depicting the geographic distribution of deaths in **** and the second depicting the average annual household expenditure on funeral services in each Italian macro-region.

Regarding the first aspect, in ****, almost **% of the total number of registered deaths (***) is concentrated in the North of the peninsula. Specifically, the Northwest accounted for **.*% of the total while the Northeast accounted for **.*%. This was followed by the South and the Center, where the share of deaths was **.*% and **.*% of the total, respectively. Finally, in the Islands, the share of deaths collected in **** was **.*% of the total.

As for the average annual household spending on funeral services, the North of the country had the highest value in ****, at ***.** euros spent on average by each household. This is followed by the Center, where total spending per family was **.** euros. In the South, the total expenditure recorded in **** was just **.*% of that recorded in the North (***).

2.4 Relevant demand trends

Two main trends are shaping the demand for funeral and related services today, in addition to a slight decrease in the purchasing power of Italians who, given the current situation, prefer to spend less on funerals than in the past.

Increase in popularity of cremation practices

Cremation is the only permanent option that requires no future intervention, while burial concessions last ** years and burial concessions only ** years. it is also a safer option from a hygienic and sanitary point of view.

The incidence of cremation recorded by Istat on the total number of burials on the Italian territory in **** was **.**%, which represents an increase of *.**% compared to ****. This increase is mainly due to the significant growth of cremation practices, both on corpses and mortal remains, in the northern regions of the country, accompanied by a significant increase in demand for cremation from southern regions as well, mainly due to the lack of space for coffins in cemeteries. The higher demand from northern regions is mainly due to the greater presence of cremation facilities in that region. In general, metropolitan cities such as Milan, Naples and Turin are those where cremation practices are most popular[***].

Finally, cremation is an economical alternative to ...

3.1 Market structure

In order to analyze the structure of the funeral market in Italy, enterprises under Ateco Code **.** "Funeral services and related activities" are analyzed. In particular, trends in the number of active enterprises and the number of employees are analyzed, as well as the legal form of different activities.

Number of enterprises

There is an increase in the number of active enterprises in the sector between **** and ****. During the period analyzed, the total number of businesses increased from **** in **** to **** in ****, marking an increase of *.*%. However, while between **** and **** the increase is *.*%, between **** and **** the total number of active enterprises contracts by *.*%.

Active enterprises under Ateco Code **.** "Funeral services and related activities" Italy, ****-****, in number Istat

Employees As in the case of enterprises, the total number of employees is also growing. Between **** and ****, there was an *.*% growth in the number of employees, which increased from **,*** to **,***. The growth rate of the number of employees is higher than that of enterprises indicating a gradual concentration of the market around present players. Employment in active enterprises under Ateco Code **.** "Funeral services and related activities" Italy, ****-****, in thousands Istat Legal form Finally, analyzing the legal form of the different activities shows that sole ...

3.2. Competition and strategy

The funeral market in Italyconsists of a complex composition of local/regional (***), from a business perspective it is possible to generalize the description of the market structure as consisting of three major subsectors[***],

Private funeral directors who are widespread and evenly distributed throughout the country, and sometimes exist as sub-offices or franchises. Honors and Funeral Directors are both part of this subsector. Most of these firms offer between ** and *** funeral services per year Firms with public or mainly public capitali.e., municipalities or municipal enterprises, which are more common in large cities or where the number of funeral services per year is significant. These enterprises are vertically integrated and offer funeral services and cemetery activities, and also autopsy services (***). It should be noted that the Italian market regulator, Antitrust, has expressed concerns about these companies due to unfair competition Non-profit associations theyrepresent only a small part of the market and consist of moral, secular, or religious organizations that provide funeral services, crematories, and make available funeral plots in their cemeteries

Finally, the funeral market includes all the companies that produce equipment and goods needed to conduct funeral services. The main companies involved in these activities in Italy are:

3.3 The main actors

The following is a proposed list of the main players active in funeral and cemetery services in Italy:

Funeral services

Imprese San Siro American Funeral s.p.a: headquartered in Milan, Italy, is a company that operates in the funeral business. Founded on April **, ****, it has established itself as an important point of reference for families at such a sensitive time as the loss of a loved one. Its core business includes funeral arrangements, the management of cemetery services, and the supply of funeral items, demonstrating an unwavering commitment to providing respectful and professional services. The company, over the years, has expanded the range of its services to comprehensively meet the needs of its clients, always maintaining a high level of quality and discretion.

A.S.F. Italia s.r.l: headquartered in Borgosatollo (***), is a funeral home founded on November **, ****. This company is committed to providing comprehensive funeral services with a strong orientation toward sensitivity and respect for the needs of families at such a sensitive time. Its activities range from the preparation of funeral ceremonies to the management of all bureaucratic and organizational aspects related to bereavement. A.S.F. Italia s.r.l. stands out for the professionalism ...

4.1 Typical presentation of a funeral service in Italy

The funeral market in Italy combines the offering of various products (***) by those interested in purchasing a prepaid funeral plan tailored to their needs.

In this sense, a typical ceremony includes the funeral director's expenses (***)Therefore, given the highly variable composition of packages and services, which generally depends on the needs of the client and the quality of the service purchased, it is very difficult to quantify and identify a single set of prices for the entire market.

Moreover, the main reasons for these differences and the resulting fragmentation are mainly due to the asymmetry of information in the market and the available offers that may or may not exist, and the value added that is difficult to quantify in the services of each funeral home. Thus, among other factors that directly influence the estimation of the final cost of the funeral, we can mention

Lack of transparency in pricing Problematic comparisons of prices and packages or differences in goods and services included Prices vary depending on the region and the funeral home in the area Mismatch between the client's financial resources and their average expenses Long-term price increases Lack of graves and burial sites in cemeteries

4.2 Prices

Analyzing the consumer price index for funeral services, between January **** and February **** shows an increase of *.* points, representing an average price increase of *.*%. In particular, as shown in the graph below, the increase is concentrated between January **** and February ****: while in the previous * years the increase was *%, over the **-month period analyzed this was *.*%, and that is almost double the increase recorded during the entire previous period. The outbreak of the Russian-Ukrainian conflict in February **** and the resulting increase in the cost of supplying raw materials and processing them is the main cause of the price increase recorded in the funeral services sector.

Consumer price index for funeral services Italy, ****-****, base *****=*** Istat

The options available in the industry and in the list of options and services that complement the offerings of an average funeral service provider in Italy are as follows:

However, in the country, current spending on a full funeral service is estimated to fluctuate around certain variable costs, ranging from about *,*** to **,*** euros, with an average price of about *,*** to *,*** euros per funeral, delineating a target market of people with average purchasing power.

4.3 New industry trends

Digitization in the industry [***]:

The profile of people most concerned with online research for funerals of loved ones are young adults, who are part of the **-** age group. This is followed by people aged **-** and then those aged **-**. It is young people, between the ages of ** and **, who care the least, as well as adults over **. There is, however, parity with regard to gender: men and women participate equally in the research.

Geographically, Milan leads with more than **,*** questions (***), where requesting information via the Web for this kind of service is not yet a widespread practice. The three cities, in fact, count about *,*** requests in ** months.

Number of online requests for funeral services by city Italy, ****, % Corriere.it

Lastello.it 's analysis also highlights the following new market trends:

Cremation without a church ceremony Accrual of the expense Dispersal of ashes in a place dear to the deceased Online request for quotes not only for the funeral but also for exhumation or exhumation Sustainability Funerals "customized" to the deceased's passions, such as songs during the ceremony or themed arrangements for the service.

5.1 Market regulatory framework

E the funeral home itself, in order to be authorized to carry out its activities within the limits provided by the territorial planning, must operate in accordance with the UNI EN ***** standard.

The Italian funeral market is regulated in the same way at the state and regional levels and allows for the inclusion of various associations and institutions, such as: FE.N.I.O.F. (***) among others, which work together to ensure the smooth functioning of the market and its evolution.

However, the process of organizing and carrying out funerals is subject to numerous rules and regulations, but there is still no single, legally and socially defined rule. The imperfection and inefficiency of the current regulatory framework is due to uncertainty related to differences in the weight of legislative power-between the state and the regions (***)-and regional and provincial regulatory powers. Over the past decade, several regional measures have been introduced to amend - locally - state legislation, creating a chaotic, complex and disorganized set of laws

At the state level, the definition of "funeral activities" (***) the following services

Processing of administrative procedures The provision of funeral and other funerary items Transportation of corpses or ashes and human bones Care, composition ...

6.1 Companies

• Imprese San Siro American Funeral s.p.a
• Concordia s.r.l
• OFT s.p.a
• A.S.F. Italia s.r.l
• Afc Torino s.p.a
• Bologna Servizi Cimiteriali s.r.l
• Azimut s.p.a
• Ferrara Tua s.p.a