Cremations increasing, funeral industry squeezed

Although nothing in this world is certain but death and taxes, even the funeral industry is getting squeezed by the recession.

For Pittsburgh-based Matthews International Corp., one of the world's leading suppliers of caskets and bronze cemetery markers, that's brought challenges and opportunities.

"The economy has impacted people's willingness to spend on funerals and memorial services, and we see that being translated to lower-priced products being sold," said Joseph Bartolacci, president and CEO of Matthews International.

More families are shying away from top-of-the-line, hand-polished mahogany caskets and are opting instead for the budget-priced poplar wood models. Cremations, on the other hand, which can reduce the cost of a funeral by half or more, are on a steady rise.

But while Matthews International is best known for items it supplies for the death care industry, the company is benefitting from a lesser-known part of its business that has come to produce nearly half its annual revenue.

Matthews creates products that stamp expiration dates on toothpaste, liquor and other household items. It provides point-of-sale displays for national retailers.

The company also uses the skills used to make bronze cemetery markers in to create custom products.

Matthews built the Elvis memorial at Graceland, all of the Baseball Hall of Fame plaques in Cooperstown, N.Y., and much of the bronze work throughout the streets of old historic Boston, where just about every lamppost and walkway marks some sort of landmark.

That diversity is important to the company's bottom line. Total worldwide sales for Matthews in fiscal 2008 amounted to $818 million and nearly half of that -- $329 million -- came from its brand solutions group, which provides equipment used to identify and mark consumer goods and industrial products.

With 4,500 employees worldwide, including 800 workers in the region, the 159-year-old public company is the oldest continually operating company in Pittsburgh. It was established in 1850 by John D. Matthews, who was a skilled engraver, and handmade stamps and branding irons.

The company now has operations around the world in 17 countries including China, Sweden and Australia.

Since Matthews went public in 1994, its annual sales from graphic images, branding and marking products has steadily grown from $65 million to its highest sales of $329 million last year.

Still, as the world's largest supplier of bronze funeral markers, the No. 1 provider of cremation equipment and the second largest manufacturer and distributor of caskets, the changing buying behavior of bereaved families has a big impact on the company's bottom line.

"One of the trends in the memorialization industry is a rising cremation rate," said Steven Nicola, chief financial officer. "Companies such as Matthews need to be aware of this trend and continue to develop strategies to support our customers."

In the United States, cremations are increasing by an annual rate of 4 percent with the national average close to 38 percent, according to the Cremation Association of North America, based in Chicago.

"Thirty years ago, you barely heard a Catholic mention the word cremation; now 30 percent of Catholics are choosing cremation," said Michael Nicodemus, vice president of the association.

"You have the increasing cost of funerals, environmental issues, and people are educating themselves more on what cremation involves. That's what I see driving the cremation increase. It's become a choice."

The rising rate of cremations could represent an opportunity for Matthews through its bronze memorialization division. Cremations do not require a gravesite, but often the niche where ashes are stored for eternity include some type of memorialization.

"Almost everybody has a desire to be memorialized and remembered," said Mr. Bartolacci. "History has shown that through the ages since the pyramids and people placing their initials in wet cement. To not memorialize is to not have existed."

Contact Tim Grant can be reached at tgrant(at)post-gazette.com

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)

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