The InvoCare Share - how much of the industry does InvoCare really own?

    A few days ago I was at a small gathering of leuters.  When talking to one lecturer about InvoCare and how they had a strong hold on the funeral industry she asked me about numbers.  About proof.  Of which I have little to none.  It was here that I realised all the numbers I have are based solely on what others think and believe, not on actual research or facts.  Thus I did some research into how much InvoCare actually owns.  What i found was rather surprising.

    Many would argue that InvoCare is the big dominator of the industry.  How they are "gobbeling up" and "InvoCarenising" other funeral homes.  I found an attitude in the industry that one worked at one of two kinds of funeral homes, an InvoCare one or a non-InvoCare one.  People would tell me about how they "owned 70% of the industry" in NSW.  The InvoCare share differes in every state, but that overall the basically dominate the industry.  They own a couple of coffin manufacturers, several cemeteries and crematoriums, funeral homes and have a strong presence in New Zealand and Singapore as well as all over Australia.

    Lately I have been talking with various lecturers about this industry and my very preliminary work into it.  When describing this dominance of InvoCare to one lecturer she questioned it.  She basically said "so where is the proof?" to support the idea that InvoCare owns so much.  This is a very good point, what proof do I actually have that InvoCare owns up to 70% of the NSW funeral industry?  None, simply put I at that stage had nothing to support the idea, nor had I even thought of it much.  I to had fallen victim to the dichotomous idea of InvoCare and non-InvoCare.  Realising this I started to question if it was actually the case of just the perception.  So I dove into the statistics.

    My methodology would be simple, or so I thought.  I intended to get the statistics on total yearly national deaths in Australia and then the specific yearly state and city deaths.  I would then compare this to the services per year (SpY) that InvoCare did nationally and by area.  From this I could not draw a complete or perfect understanding of the InvoCare share but I could st least get a starting point.  An idea and framework.  This is where I hit the wall.  What was to be a couple of hours work turned into a week of research and mathematics.

    It was surprisingly difficult to get any decent numbers or statistics.  As someone explained, this is an issue that others such as the ACC has also faced when getting statistics from the funeral industry.  The official numbers I found were questionable at best.  They tended to change depending on context and were too subjective to be considered reliable.  I wondered if their intent was to promote certain businesses or aspects rather than drawn an accurate picture.  Instead I turned to estimations, speculations and what I had overheard or been told casually.  Normally it would be the other way around, but in this case it was the estimations and gossip which proved to be the more trustworthy.  The numbers I arrived at through this method were very similar to the numbers others also came to.  One case in particular the two of us had almost identical numbers but for very different reasons.  Thus I came to trust these numbers all the more.

    Not only was the funeral industry difficult to squeeze numbers out of, reliable or otherwise.  But I also had trouble getting specific death rates by city or area.  The best I could narrow it down to though the Australian Bureau of Statistics (ABS) was by state, not city.  However, while this was a slight issue and means my findings are not 'perfect' it does not impact on accuracy.  I stand by my findings and believe them to be accurate based on what I can currently find.

    Now, on to question the dominance of InvoCare and look at what they actually own and do.  According to the InvoCare literature as of 2011 they are an "undeniable industry leader in funeral and related services across the Asia-Pacific" (Involve, 2012, p. 2).  InvoCare owns almost 250 funeral home locations, 14 cemetery and crematorium locations and has over 1,500 "of the best trained and most dedicated staff" (Involve, 2012, p.2, 6, 10).  Of the 250 funeral home locations about 140 fall under the 'premium' group known as "contemporary" (Involve, 2012, p. 24).

    A standard breakdown of the InvoCare share of the industry would be:
- New South Wales NSW (specifically Sydney) = InvoCare owns 70%
- Queensland QLD (specifically Brisbane) = 40%
- Victoria VIC (specifically Melbourne) = 40%
- South Australia SA (specifically Adelaide) = 20%

* Note: InvoCare's ownership is mainly confined to major cities.  For example in NSW and QLD they are mostly in the capital cities and have very little if anything anywhere else in the states.  But for my study I combine the two as the capital cities are where most of the state's deaths are.

    From this one could see why many believe InvoCare to own so much of the industry.  Not many other funeral homes could come close to owning 250 funeral locations, nor do any own 14 crematoriums and cemeteries.  But how many services per year (SpY) do they actually do?  First I looked to Sydney.  To understand the following I need to explain how InvoCare works.  Basically they use about 3 large processing centers in Sydney.  Here is where all the bodies go and are 'prepared' (as in embalmed, dressed, coffined, etc).  They might have 50-100 funeral locations in Sydney, but almost all of them are just a shop front.  All the actual work is done at one of these centres.  Now, Lidcombe is the largest of these centres in Sydney.  I remember a conversation with someone very high in the InvoCare system.  They said that Lidcombe did 6,500 SpY at that time in 2011.  But with renovations in 2012 they were expecting 10,000 SpY.  Lidcombe might be the largest, but the others are not far behind for SpY.  From this I and another concluded InvoCare does about 16,000-18,000 SpY in Sydney.

    I then talked with someone else via email who has a lot of experience and understanding about the industry and InvoCare.  They said InvoCare does about 17,000 SpY in Sydney based on previous research and estimations.  This was very good news as it supported my number.  That we both came to a very similar number based on different things and methods.  Which implies some reliability or at least some applicability.

    Next I looked to the number of deaths in Sydney per year.  Failing to find this I instead found NSW had 48,800 deaths in 2008.  That this number is also relatively consistant and that most of the NSW population lives in Sydney.  While the death rate is higher in rural areas the vast majority of deaths in NSW would occur in Sydney.  So to be on the safe side I assume all 48,800 deaths in NSW were in Sydney.

    Comparing the 48,800 deaths to 17,000 SpY we find something rather surprising.  That InvoCare who supposedly owns 70% of the NSW funeral market does only 30% of the funerals in NSW.  A rather striking inconsistency.  That this company can supposedly own 70% of a state yet only do 30% of the funerals.  Surprising as it is let's turn to the national share.  Perhaps the numbers for NSW were off or wrong.  So comparing it with their national share might help to explain things.

    Getting the national InvoCare numbers was very difficult.  The best I, and others, could work out was they did about 50,000 SpY in Australia (so not including New Zealand or Singapore).  Based on different things this was the best we could estimate.  Then the same person I was emailing came up with the same number.  They got their number through looking at deaths per year in each state compared with InvoCare's SpY in each state.  Also, I found an economic website which also said InvoCare does an average 50,000 funerals per year.  Thus it would have to do and is somewhat reliable.  About 143,500 people die in Australia every year.  So if we compare the two numbers we find InvoCare does about 25% of all funerals in Australia.  Again, not exactly the giants many argue InvoCare to be.  Or so it would appear.

    To look at the InvoCare share in just SpY is a simple and superficial manner.  Sure, they might only do 30% of the SpY in NSW, but they still own about 70% of the market there.  You might doubt this, but let me explain.

    As previously stated InvoCare owns 250 funeral locations over Australia.  Not many, if any, funeral companies come close to this.  InvoCare also does about 50,000 SpY, and sure, that is only 25% of the total market.  But the single next biggest is Tobin Bros with about 6,000 SpY or TJ Andrews which is also about that number.  50,000 compared with 6,000 is a big difference.  No other funeral company comes close to InvoCare in total number of SpY, nor in locations around Australia.

    However, InvoCare does not simply do funerals, nor do they just own funeral homes.  InvoCare also own 14 cemeteries and crematoriums.  Something that is rare of most funeral companies.  Sure, there are some funeral homes owned by certain crematoriums/cemeteries.  There are also cases where funeral homes and crematoriums/cemeteries are associated with each other.  Yet no one group comes close to owning 14 cemeteries and crematoriums.  They tend to own one, perhaps two at most.

    InvoCare is also partners with a large tribute and commemorative website called HeavenAddress.  This site reached 300,000 unique views and 1.25 million total views in 2011 (Involve, 2012, p. 6).  This is of note as HeavenAddress promotes InvoCare brand companies and InvoCare funeral homes promote the website to mourners.  They form a cycle of mass and specific promotion of InvoCare products and services.

    Prepaid funerals and funeral insurance are a big part of the industry.  According to some undertakers a few funeral homes survive on prepaid funerals.  It is a multi million (perhaps billion) dollar market.  And naturally InvoCare owns a big chunk of it.  I do not know the specifics as my aim was to stick directly with funerals.  But I do know they are a player in the prepaid and funeral insurance markets.

    Further more InvoCare also owns a few coffin manufacturers.  They own and promote LifeArt, a 'green' cardboard coffin which is the height and very definition of modernity.  You can read my post about LifeArt here.  They also own another coffin manufacturer or two.

    In other words InvoCare might only do 25% of the national SpY, but the next closest is only about 4% of the national SpY.  Also InvoCare own other things, such as tribute websites, crematoriums, cemeteries, coffin makers and so on.  So sure, 25% appears quite small, but in reality they have a lot more influence and hold than any other group.  They are into every single aspect of the funeral industry.  One could have a completely 100% InvoCare funeral, from the undertakers to the coffin and crematorium.  No other funeral home can say this.  No other funeral home can do a funeral where they own every aspect of it.

    But we are still stuck on the number discrepancy.  That many believe InvoCare to own 70% of the industry in NSW yet they only do 30% of the SpY.  Well, quite simply it is because InvoCare "owns a lot", as in they own a majority of the funeral properties in Sydney.  Plus the lines are drawn and moved as they like.  InvoCare might frame 'Sydney' as just the CBD, or the North Shore, or the Inner East or wherever else it likes.  This really goes to show that numbers (like most other things) without reference are unreliable and useless.  And how important framework is in a study or an understanding of a topic.

    Overall InvoCare might not dominate or directly control 70% of the industry in NSW.  But they do influence a lot and directly control a lot.  No other single funeral company can compare to InvoCare.  Because do not forget, they are international with a strong hold in New Zealand and Singapore as well as the American influence.  At the end of the day InvoCare is by far the biggest player in the Australian funeral industry.


    On a side note, for those that worry about this have no fear!  InvoCare while not perfect is decent, they genuinely do try and they will probably be gone one day.  That is the nature of the industry, other big companies like InvoCare have existed and overshadowed the industry for decades.  Then they were swept away in a short year or two.  Just look up Wood Coffill Funerals, they once held more of the NSW market than InvoCare does now.  Yet in just a few years they faded to nothing in just a few short years in the early 2000s.  They only exist in the Yellow Pages now.  It is the nature of the industry, that large companies, as large as InvoCare can just come and go.

AH~~

Acknowledgements:
    I would just like to say thank you to two people who really helped with this post.  Without them the research and analysis of the numbers would not have been possible.  So even if they do not realise how much they helped I hope they realise how much I appreciate their help.  Unfortunately I do not name names, but they know who they are :)

References:

Involve. (2012, January), InvoCare. (24).

http://www.abs.gov.au/ausstats/abs@.nsf/Products/09EE22BB30272EC3CA257943000CECDB?opendocument

http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/3311.1

http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1338.1Main+Features9Dec+2010

http://www.ethicalinvestment.com.au/invocare-ltd/

<> Yes, I know I didn't reference or cite correctly.  But I am short on time and this is not a proper essay :) <>