Managing partner of the market research firm bw166 Jon Moramarco said it. Callum Williams, the senior economic writer for The Economist said it. Executive director of the National Association of Wine Retailers Tom Wark said it.
Younger consumers aren’t buying wine because they don’t have the money to do so.
And yet, the wine business—along with many other industries—seems content to hang its hat on the promise of the “Great Wealth Transfer.”
It’s expected that over the next 20 years, the accumulated wealth of the Baby Boomer generation will be transferred to their children, many of whom are Millennials, now aged 30 to 45 years old. Every generation inherits a sum from the prior generation, but this “Great Wealth Transfer” has been deemed such because of the immense wealth held by the Baby Boomers and how it could possibly resolve the dire economic position of Millennials. Hypothetically, this surge in wealth among the younger generation will allow Millennials to participate in economic opportunities that they currently cannot afford, things like owning a home, saving for retirement, and spending on luxuries, as well as add a much-needed boost to the U.S. economy.
Previous estimates put this transfer of wealth at approximately $124 trillion, but according to a July report from Visa Business and Economic Insights, that inheritance will be much lower—by as much as 25%—and unequally skewed toward already affluent individuals.
Over the last 30 years, thanks to historically well-performing stock and real estate markets, the Baby Boomers, those born between 1946 and 1964, have amassed $93 trillion in assets—the largest share of a single demographic in modern history. By comparison, Gen X (born 1965 – 1980) holds $43.7 trillion and Millennials and Gen Z combined hold $17.91 trillion, according to SmartAsset.
Despite the financial successes of older Americans, there are still debts to be paid out of this amassed wealth. Collectively, Baby Boomers hold more than $4 trillion in debt from credit cards, loans, and mortgage liabilities, among others.
Of the remaining $88 trillion in assets, Visa noted that one-third of this wealth is held by the top 1% of households, suggesting that spouses and heirs of these Baby Boomers will receive the largest share of wealth. Even among the remaining 99% of households, the ”Great Wealth Transfer” will mostly benefit already affluent individuals.
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