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MARKET SUMMARY

1.1 Presentation

The Funeral Market refers to the specific segment of the market for correlated and interconnected commercial activities that allow for a complete celebration of funeral services in its three major events (i) the visit (pay tribute to the deceased during his or her family visit), (ii) the funeral service (formal farewell to the deceased by an officer or funeral director) and (iii) the burial at the cemetery or cremation at its location

Thus, the funeral home is a a particular commercial agency that provides a professional and organised service activity that is mainly - but not exclusively - related to the funeral business and whose main activity is represented by the organization and management of the funeral service, which ends with the burial of the body. To this end, a funeral agency carries out various relevant activities: from the production of goods (coffins, zinc boxes, padding, etc.) at the sale of complementary goods (funeral furniture, flowers, etc.), via the equipment rental necessary for the function (combustion room, transport car rental, grave, etc.), as well as the intermediary function to manage - on behalf of the relatives - the administrative procedures.

It goes without saying that positioning is of paramount importance for a funeral company . Marketing; the dissemination of information at the local level will be particularly valuable. As the deceased only very rarely chooses the funeral agency, the relatives will be responsible for organizing the ceremony and thus choosing the agency

They are do so mainly on the basis of geographical conditions (location) and personal (emotional factors)

The quality of service and its composition also play a crucial role in the choice: post-mortem assistance with tax and legal advice, for example, is considered one of the most appropriate added values

Funeral market in France

Turnover from funeral services in France is expected to increase by 3% in 2018. The sector's activity will continue to be driven by the increase in the number of deaths. Today, this market is worth around €2 billion a year. Funeral prices will continue to rise at a rate well above inflation. The financial performance of funeral service companies will remain at a high level.

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In France, there were counted 550.000 deaths in 2017 that stimulate a growing funeral services market. As the number of deaths is expected to increase, the market is expected to continue to grow. By 2030, there should be nearly 700.000 deaths per year. As a result, new players are emerging on the market, with new codes and services. Digital funeral services, which are very present on the web, have expanded rapidly.


Over the past decade, ceremony prices have increased significantly. According to UFC - Que Choisir, a ceremony today costs more than 1.3 times the price charged in the 2000s. The 2011 Funeral Act, which provides a framework for price evaluations and ends years of tariff liberalism. Agencies must now provide a quote before any purchase.

Today, the cost of a funeral ceremony ranges from 1500 euros and 7000 euros . The one for the funeral is to 3350 euros . The price will depend on several factors such as the location of the vault, monuments, type of coffin and flowers. The method of burial is the first factor in price variation. Since 2011, they have increased by more than 8% according to UFC Que Choisir. Administrative formalities cost between 40 and 500 euros .

This diagram represents the amount of the price of funeral concessions in France in 2015, according to the type of concession, in euros. That year, it can be seen that a funeral in a family vault cost 3,500 euros.

Source: Lassurance-obsèques.fr

This diagram illustrates the minimum and maximum amount of funeral and burial expenses in provincial France in 2014, by type of expense, in euros. In total, it was necessary to count an expense of at least 2,000 euros for a burial in the provinces.

Funeral market in Belgium

To quantify the importance and size of the funeral market in Belgium, a demographic analysis which includes the mortality rate and statistics of people living in the Italian peninsula (but also those living on board and eventually repatriated) is necessary

In Belgium live about 11.45 million people the mortality rate is 11.3% and the mortality rate is 9.7%. The demographic pyramid has slowly been reversed in recent years ( v-shaped conversion ), under the significant effect of the lower birth rates and to increasing life expectancy as well as the proportion of people over 65 years of age. Belgium has a particularly high rate of people over 72 years of age

Graph 1: Age distribution in Belgium

Résultat de recherche d'images pour "pyramide des ages belgique"

Source: Pyramidesages.co

In addition, long-term forecasts of the median age (dividing the population into two equal groups) in Italy suggest that the the demographic composition of the country will evolve towards a global distribution of older people from under 42 years of age in 2015 to almost 45 years of age in 2025

Graph 2: Median age of the population between 1950 and 2050 in Belgium (in years)

Source: Statbel https://statbel.fgov.be/fr/themes/population/mortalite-et-esperance-de-vie/mortalite-generale

Thus, as expected nationally, a slight increase in the size of the over-65 segment over time translates into a modest but significant increase in the mortality rate in the country. In 1950, the crude mortality rate was around 13%, has declined sharply since the 1990s and now stands at less than 10%, and is expected to increase only in a limited and progressive way.

Graph 3: Mortality rate in Belgium from 1950 to 2017 (by sex)

mortalite%202017_fr.png

Source: Stabtbel based on government data

The crude mortality rate is the " ratio of the number of deaths to the average population of the year, expressed in per thousand.
Based on data from the National Register and in accordance with the national definition of population. »

Differences exist by region: for example, it is estimated that the crude mortality rate was 7.6% in 2017 in Brussels, 9.6% in the Flemish region and 10.5% in the Walloon region.

With an annual figure of more than 400 million euros Belgian funeral services companies are doing well. According to the Neutral Union for the Self-Employed (SNI), there has been a 7% increase in the number of funeral companies in 2015. There were 847 funeral companies operating at the end of 2015, (for comparison the figures were 794 in 2014 and 786 in 2013). The sector is mainly made up of SMEs, their small size allows them to adopt "more personal approaches" focused on listening and respecting the customer.

In the past, the trade was mainly in the hands of craftsmen, carpenters, cabinet makers or embalmers.... Since 1982, with the increase in regulation, the sector has become more professional. Small companies, mostly family-owned, have been forced to adapt their statutes, transform themselves into companies and set up rigorous management. Consolidations and buybacks have taken place. Especially when small entrepreneurs, sometimes for lack of a successor, could no longer follow. As a result, there are fewer and fewer independent contractors. In the past, there were several undertakers per canton. Today, funeral directors tend to group together in large cities. At the same time, in the countryside, many companies are disappearing and there is often only one company left for several municipalities. While there was 120 funeral companies in the province of Liege ten years ago, there are only a few left 80 nowadays . The reasons for disappearances are varied: no buyers, group buy-outs, lack of economic profitability

The share of groups has increased significantly. For example, the company "Dela", a regional grouping and the main operator of funeral services in Belgium, is very active on the market with its 120 funeral homes and 4 crematoria in the country

In smaller municipalities, undertakers have become rarer because it is not profitable. Indeed, a company that makes 50-60 death per year is no longer profitable. A threshold of 100-120 deaths per year to hope to be profitable

According to the National Federation of Funeral Directors, the number of cremations on a national scale has exceeded the number of funerals and is around 51.5%. There are obviously differences between regions and a significant gap between urban and rural areas. Cremation is the option chosen by 40% of Walloons, 60% of Brussels people. One reason for this trend is the relatively high cost of burial

Funeral market: between competition and cartel

Faced with the urgency of funerals, professionals in the sector have often put in place tacit agreements that inflate prices upwards.
The funeral market in Belgium is often described as a cartel where sellers obtain control of a contract by formal or informal agreement ...

The "Code of Ethics for Funeral Directors" has also provided for sanctions for any companies that "charge prices, and/or fees that are clearly excessive or systematically below normal prices"

Nevertheless, Les Pompes Funèbres Générales, which until 1993 had a market monopoly, now represents only 20% of the market. Other private companies have emerged such as Roc'Eclerc (13% of the market) or the Le Choix Funéraire cooperative (10%)

Thus, there is a diversification in the sector with the development of new services and prices.

Funeral insurance market

In Belgium, there is an increase in the number of people who cannot pay for their funerals. There are at least one in 20 cases which has this problem on average in Belgium One in 20 almost represents 5000 funerals per year in default of payment. To meet the needs of these clients, funeral professionals created funeral insurance in 2013. This insurance offers two options: either prepay your own funeral with your own money. Or take out monthly insurance to cover funeral expenses in the event of death

The multiplicity of products involved in a funeral (funeral directors, headstone, rental of a cemetery site) can quickly increase the cost. On average, the price of the funeral is between 3000 and 5000 euros . Prices also depend on the region, the Walloon average is 3500 euros , 4 500 in Flanders. The average price of a cremation is 500 the one of a de minimun urn 100 and the monument 1000 euros

According to FPS Economy, prices have increased by almost 35% in the last ten years.

Price variation by geographical location

Let's take the example of Namur where prices are in the national average. A place for two people for 25 years in the Belgrade cemetery, costs 600 euros for the rental of a pitch for two people for a period of 25 years

Dinant on the other hand is known for its low prices. The 25-year open ground concession costs 100 euros

At the Watermael-Boitsfort cemetery in Brussels, the 10-year concession for 2 people costs 1,427 euros for a 15-year concession

However, prices in Belgium are lower than in other countries. In Holland, for example, the cost of a funeral service is often around 7.000 € .

Municipalities are free to set local tariffs and taxes, prices vary according to policy but also according to the space available and the possibilities of extending cemeteries

For economic reasons, some families choose to bury their deceased outside their commune of origin. Cities have put in place higher prohibitive tariffs to prevent this type of practice. In Dinant, for example, prices have been multiplied by 5.

Development of the low cost sector

B-Funerals launched Belgium's first low-cost funeral: they would be up to four times cheaper than a traditional funeral. To get such a low price, the service is reduced to a minimum. Only accessible on the Internet and by telephone, supported by small teams, the low-cost funeral service focuses on the essentials. As a result of the savings made, the basic price of a burial was reduced to 995€ ( 1.595€ for a cremation). To obtain such a low cost, Budget Funerals reduces the services to a minimum: imposed wooden coffin, ceremony of 15 minutes maximum, etc. The casket carriers are optional ( 250€ ), as well as the Mass ( 250 € ).

Diversification of the offer

Funeral homes frequently have to personalize funerals at the request of the family or the deceased himself

The sector is also evolving to meet contemporary trends such as aquamation, dissolving the body in a liquid, or broadcasting funerals live to allow those who are absent to attend

The funeral market is becoming more and more connected

Connected services are also present in a 2.0 funeral market: online death notices and condolences, funerals to be followed in real time on a tablet, virtual cemetery. Organization, authorizations and payments can now be done online. The funeral can also be streamed and burned CDs of the event are available. It will cost nearly 250 euros to do so

The development of "cyber-cemeteries" is also exponential. These sites allow relatives to honour the memory of the deceased by posting messages and photos. These e-Cemeteries have a price of 50 and 200 euros per year

At a time when purchasing power is not increasing very much, the Internet makes it possible to reduce funeral expenses by allowing operators to compete on a larger scale, but it also changes their business by making the relationship with the customer less close

Regulations and infringements

Legislation also has its part to play in this sector. In Wallonia, coffins must be made of wood, and relatives are not allowed to freely dispose of the deceased's ashes on private land, in Flanders and Brussels, the legislation is more flexible.


The Belgian Ministry of Consumers conducted a survey in the funeral sector in 2017. On 202 controls, more than half companies were in violation. In addition to administrative offences, it can be noted that 57% of the offences identified were tariff-related 114 companies did not display their rates correctly.

The purchase orders did not correspond to the payment. Finally, some funeral companies allowed cash payment, which was strictly prohibited.

Funeral homes and eco-responsibility

The issue of eco-responsibility in this sector often comes up again. From now on, we offer organic cardboard and cotton coffins, wicker funeral urns, and even simple shrouds to breathe ecology and ethics into funeral pumps. To comply with this standard, caskets must be PEFC or FSC certified (wood from the forests of eco-managed European farms).

A eco-caskets can also be made from natural materials such as banana leaves, bamboo, sea rush, braided willow, pandanus, etc... The urns can be made of papier mâché, clay, bamboo, jute and other biodegradable vegetable polymers.
 

Cédric Vanhorenbeke, president of the Alveus funeral cooperative, wants to limit the pollution caused during the funeral: he no longer uses chipboard and synthetic coatings during cremations. He returned to traditional basketry methods to weave funeral urns with Belgian wicker.

Ethical funerals are generally cheaper. A funeral ceremony costs between 2000 euros and 2500 euros at Alveus half the average price in Brussels, a cardboard coffin for 200 euros.

History of the event  

Since the 1980s, the funeral sector has become more professional. With the advent of new standards and regulations, small businesses have had to evolve. A wave of mutualization and merger then took place.

Foreign investors have gradually entered the market. First, the American companies, Service Corporation International and Stewart, world leaders in the field, have established themselves in Belgium through company takeovers and crematoria. Their expansion strategy was probably too rapid, they were unable to generate sufficient profits and chose to exit the market. Their networks were sold to a Dutch group

DEMAND ANALYSIS

MARKET STRUCTURE

ANALYSIS OF THE OFFER

RULES AND REGULATIONS

POSITIONING OF THE ACTORS

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chargé d'études économiques, Xerfi

Hugo Schott

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Mathieu Luinaud

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PhD Industrial transformations

Robin Charbonnier

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Pierre Doussau

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Arnaud Walter

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Amaury de Balincourt

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Pierrick Cudonnec

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Maelle Vitry

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Héloise Fruchard

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EDHEC

Imane Essadiq

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Vincent Defrenet

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Eva-Garance Tison

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Michela Grimaldi

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Azelie Prigent

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Cantiane Gueguen

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Jules Decour

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Alexia Vacheron

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Emil Ohlsson

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Anna Oeser

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Gabriel Salvitti

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