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April 5, 2011 | last updated December 1, 2011 12:22 pm
Portlandbiz

Low-cost funeral chain enters Portland market

Photo/Rebecca Goldfine
Photo/Rebecca Goldfine
Kevin Kilcline, the director of a new branch of national company Advantage Funeral that's opened on Forest Avenue, is hoping to compete in the local mortuary business by offering inexpensive cremations and burials

In February, a new funeral home opened in a nondescript, one-story mall on Forest Avenue. The business's version of a hearse, a Dodge Caravan minivan, is parked out front, and the only sign up so far is tacked on the exterior wall that reads "advantage Funeral & Cremation Services."

No long-faced undertaker in a black suit greets visitors at the door here. Instead a cheerful "hello" floats around the corner, and 38-year-old Kevin Kilcline appears a few seconds later in a green Advantage Funeral T-shirt that shows off two large blue-black tattoos on his forearms. Later, he explains the tattoos are the names of his children inscribed in gothic lettering.

Kilcline is the director and sole employee of the newest Advantage Funeral branch at 981 Forest Ave., the first to open in New England. Advantage is the low-end brand of Houston, Texas-based Service Corporation International, North America's largest provider of "death care products and services," according to its annual report. By the end of 2010, the public company operated 1,417 funeral service locations and 381 cemeteries in the United States, Canada and Germany, and its annual revenue was $2.2 billion. The report says its original business plan was based on building efficiencies of scale, specifically by reducing overhead costs by sharing embalming, accounting, transportation and personnel services among its funeral homes in a business "cluster."

SCI has 12 businesses in Maine, including Advantage, which advertises itself as an "affordable, economic alternative to traditional funeral homes," according to its website. Since Advantage began in 2001, it has grown to 28 locations nationwide.

Advantage had been looking to expand to Maine for some time, according to SCI's Maine marketing director, Mike Martel, because the state has one of the highest cremation rates in the country. "There is a soaring rate of cremation in Maine," says Martel, "and there's a number of low-cost providers that have grown in Maine in the last few years."

Cremations are far cheaper than traditional burials, and they are the bread and butter of discount funeral homes. At Advantage, for example, the price for a simple cremation is $990 while the cheapest burial package goes for $3,525. Fancier funerals can get as high as $10,000 or $12,000, according to Kilcline.

From 1990 to 2009, the number of cremations in Maine almost tripled from 2,640 to 7,824, while burials dropped from 6,491 to 3,332, according to state data. Martel says these numbers are driven by the state's relatively small church-going population. A 2010 survey of U.S. cities by the Barna Group, a California-based marketing research firm serving Christian ministries, found that Portland has the third smallest population of people identifying as Christians, 72%, following San Francisco and Portland, Oregon. It also ties Seattle with the highest number of people, 19%, who identify as being atheist or agnostic. (The markets with the largest Christian populations are Shreveport, La., 98%, and Birmingham, Ala., 96%.)

Religion may be one factor. Kilcline also likens funeral tastes to shopping habits. "There are people who want to shop at Wal-Mart, people who have to shop at Wal-Mart and people who want to shop at Nordstrom," he says.

Although death is inevitable, the funeral business has a relatively limited market -- only so many people die per year. In the Portland area, about 1,400 residents die annually, according to Martel, and, of those planning the services, "we like to think that 10% to 15% [are] price sensitive." Advantage is aiming to do 100 calls a year by 2014, according to Kilcline. So far, since he opened his doors in February, he's had seven clients, four of whom requested simple cremations, he says.

Picking up a bigger market share requires competing with well-known companies already in the Portland area. "It is a very established market," Martel says, with both upscale homes like Conroy-Tully Funeral Homes, which was founded in 1959, and lower-cost competitors, such as Funeral Alternatives, which has locations in Lewiston, Yarmouth and Augusta, and Independent Death Care of Maine on Brighton Avenue, a family-owned funeral home.

In its annual report, SCI says that the majority of death care businesses in North America are still locally owned and independent, and that its overall market share in North America is 12%.

Marketing Advantage will take more than advertising on the obituary pages of local newspapers, Martel says. In this business, relationship building is just as important. To get out in the community, Kilcline says he's joined the Elks Lodge and the Fraternal Order of Eagles, and he volunteers at events such as their Mother's Day breakfasts.

Funeral services, too, have high fixed costs and it's hard to keep prices low, especially when you're promising to be "the cheapest show in town," as Kilcline puts it. A new hearse alone costs as much as $95,000, according to Kilcline, so he'll be driving his minivan before buying a used coach. He also says he'll outsource some services, such as renting refrigerator and embalming space at nearby Jones-Rich-Hutchins Funeral Home, which is also owned by SCI.

At Advantage, you don't find the staples of a traditional funeral home: the "big, nice rooms, antique furniture, new cars and the staff to open doors for you," Kilcline says. The state room is small, with a low casket bier, two displays of urns for sale, some understated couches and chairs, and a coffee table with a book of ghost stories on it.

This book reflects Kilcline's droll approach to the business. He says that's how his father, who was also a funeral home director, handled it. "I get people to laugh," he says.

As for himself, he says that one consequence of carrying on his family's line of work is that he's not afraid of dying. But he doesn't want an inexpensive funeral, he adds. "When I die, I want a big funeral procession with a big fire truck," Kilcline jokes. "If you're a funeral director, you want to have a big burial because it's good for business."

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