Do you care where a diamond comes from?
Historically, consumers didn’t have a choice. Natural diamonds were formed billions of years ago, deep beneath the earth’s surface, and were then thrust hundreds of kilometers to its crust by volcanic eruptions before eventually being extracted from mines in South Africa, Russia and elsewhere. Companies like De Beers convinced the world that a diamond is forever, made the stones synonymous with engagement rings and encouraged people to spend at least three months’ salary on a rock when they wed.
But in recent years, the natural diamond industry has been upended by laboratory-grown diamonds, which are virtually identical in chemical composition to their natural counterparts (at least to the naked eye). They can be grown in almost any size or color and cost anywhere from a 20th to a quarter of the price of natural stones. As shoppers look for ever bigger and blingier sparkles, synthetic diamonds have become increasingly popular — especially in the United States, the world’s largest market for diamond jewelry.
Last year, according to a survey of U.S. consumers by the online wedding platform the Knot, more than half of respondents said their engagement rings featured a lab-grown diamond as a center stone, up from 46 percent in 2023 and 12 percent in 2019. Walmart, which started stocking lab-grown diamond jewelry in 2022, said sales in that category were up 175 percent last year compared to 2023.
“Imagine if Hermès introduced an AI technology that could produce a perfect Birkin bag using the same materials in the same atelier, but in a fraction of the time,” Jessica Sailer Van Lith, founder of the lab-grown line La Pietra, said in a gushing Vogue article called “Shhh… I Sort of Regret Not Buying a Lab-Grown Engagement Ring in February. “Would you want one?”
A Rocky Question
With a raft of buzzy lab-grown diamond brands like Blue Nile, Grown Brilliance and Dorsey and with establishment names like Jennifer Fisher and Pandora pivoting to stones that are made, not mined, are the likes of De Beers — the world’s biggest diamond miner, whose very existence depends on the popularity of natural stones — facing an existential threat?
You wouldn’t think so to look at Al Cook, the jovial chief executive of De Beers, as he sat in the company’s London headquarters last week. After a boom in spending during and immediately after the pandemic, the natural diamond market has had a difficult few years. Alongside the acceptance of lab-grown diamonds, fewer marriages, plunging demand in China, Russian sanctions and a volatile global economy all played a part.
Now De Beers, which has cut its production and is set to go public in the next 12 months after its parent Anglo American put it up for sale, is sitting on a $2 billion stockpile of unsold diamonds. As part of its cost-cutting measures, the company confirmed this week that it would shut down Lightbox, a fashion jewelry label it introduced in 2018 to sell synthetic diamonds at a time when a synthetic price discount was only 10 percent of their natural counterparts.
The gambit was pitched as a bold experiment to show consumers the difference between natural and lab-grown diamonds, offering lower than market prices in a bid to protect De Beers’s core business. But did it work?
“Kind of,” Mr. Cook said. Lightbox, he said, was designed to sell man-made diamonds at value pegged to what it cost to make them rather than metrics like carat, cut, color and clarity that guide the price of natural stones. Because of declining manufacturing costs, however, the wholesale price of lab-grown stones has fallen by 90 percent since the unveiling of Lightbox, which he said highlighted that gulf even further.
“The fact that you can now buy a $299 engagement ring at Walmart would be a win in the eyes of my predecessors,” Mr. Cook said, adding that people didn’t perceive that sort of purchase as an “heirloom,” or investment. “And because some retailers are still selling that ring for $3,000, we have work to do to differentiate and push the desirability of natural diamonds.”
If some consumers won’t want a “luxury” item that costs almost nothing, the theory — or great hope — is that the appeal of natural stones could remain in place. But Paul Zimnisky, an independent diamond industry analyst and consultant, said it was increasingly clear that many consumers don’t understand the difference and hadn’t been helped by retailers seduced by the prospect of margins as high as 80 to 90 percent on synthetic stones, compared with 20 to 40 percent for natural diamonds.
“There is still a lot of confusion among prospective buyers,” he said. “Consumers have been told over and over that the two products are exactly the same, when the reality is they can be chemically distinguished with certainty.”
Lab-made diamonds have essentially the same chemical makeup as natural ones and look the same, unless viewed through sophisticated equipment that gauges the characteristics of emitted light. To tell the difference, you need a machine like De Beers’s DiamondProof, designed to sit on the counter at a jewelry store so prospective customers can verify a natural diamond purchase.
“Consumers are willing to spend ten times more for a natural diamond, but they need to be guaranteed that what they are buying is in fact a natural,” Mr. Zimnisky said.
What happens if the market isn’t able to create clearer definitions between the two types of stones? “Industry suicide,” he said.
Race to the Bottom
Given a mass consumer mind-set that bigger is definitely better, particularly among the all-important bridal market, the future for natural diamonds will come down to marketing — as it always has. But the odds are stacking up against its players.
President Trump’s proposed tariffs could cause the industry headaches (though Mr. Cook said he thought that in the long term diamonds may gain an exemption, and Mr. Zimnisky said that one bright spot could be a boost to the secondhand diamond market in the United States).
Another hot topic? Many buyers cite ethical issues over natural diamonds and call synthetic stones conflict-free and sustainable alternatives. Natural proponents argue that the energy consumption between natural and man-made diamonds are roughly the same.
Last fall, De Beers and Signet Jewelers, the largest diamond jewelry retailer in the United States, began a splashy advertising campaign centered around natural diamonds with the slogan “Worth the Wait.” De Beers plans to spend more on marketing in 2025 than it has in a decade, including a focus on helping retail partners train sales associates.
As Mr. Cook prepared to turn his back on lab-grown jewelry offerings with the Lightbox closure — and at a time when consumer-facing diamond prices have started inching up in the United States as retailers respond to a possible trade war (stones already in the country have any potential costs relating to tariffs already baked in) — how optimistic was he for the future of natural stones?
“For 600 years, people have loved natural diamonds because they are beautiful and rare,” Mr. Cook said. “Synthetics aren’t rare, and they certainly won’t be in 600 years’ time. Natural diamonds will be even more scarce than they are now.”
“Then again,” he added with a tight smile, “none of us will actually be around to find out.”
