Are lab-grown diamonds here to stay?

Or will they go the way of the humble Cubic Zirconia?

If you were around in the late ‘70s you might recall the furor that arose in the media when Cubic Zirconia (CZ) became known as a potential diamond alternative.

I remember commercial television and the popular press whipping up a frenzy of attention questioning whether these new-fangled CZs would destroy the diamond industry and make people’s jewellery worthless.

Various experts were brought in on live TV to prove whether or not CZs could be identified next to diamonds and it all got pretty heated there for a while. Public interest was intense and mainstream media probably made a motza in extra advertising revenue.

But when the storm passed and the public came to understand that they didn’t really pose a threat, CZs were relegated to their appropriate place in the industry.

CZs are a “cheap and cheerful” bit of bling and they serve their purpose. Most people know what they are and everyone has been getting along just fine for the past 30-odd years.

Enter ‘laboratory-grown diamonds’

Unlike CZs, lab-grown diamonds are not a diamond alternative. They’re the real thing.

They’ve actually been around in commercial quantities since the mid-50s – though it’s only since the late ‘90s that the sector has been able to reliably produce jewellery-quality stones. Everything before then was produced for the industrial market.

Industry is still the primary market for many lab-grown producers. It’s only in the past 10 years or so that lab-grown diamonds have started competing with their mined counterparts in a meaningful way.

As technology and processes have improved, costs have come down and product quality has gone up. Meanwhile increasing public interest in sustainability, human rights and climate change has created an environment perfect for the lab-grown industry. As a result, and coupled with some smart marketing, the product has been able to get a serious foothold in the mainstream jewellery market.

Arguably it was De Beers’ decision to enter the lab-grown market early in 2018 that triggered the latest media frenzy, boosting public awareness of the product. But with or without De Beers, lab-grown was, and still is, trending upwards.

Lab-grown and the fashion and celebrity world

Back when the De Beers thing kicked-off, there was already a number of high-profile players making headlines in the luxury diamond jewellery market.

Diamond Foundry (famously associated with Leonardo DiCaprio) was making a big splash, high profile brand Lark & Berry featured them at the 2018 Cannes Film Festival and several Victoria’s Secret models took them for a stroll down the catwalk.

Also in 2018, actor Penelope Cruz designed a lab-grown diamond jewellery collection for Swarovski, Paris-based, high-end jewellery maker Courbet released its first lab-grown diamond jewellery collection, and Virginia Beach-based Long Jewellers also started selling lab-grown diamonds.

Other high-profile adopters include Kingston Jewelers (UK), Twilight actress Nikki Reed and People’s Choice Award winner Camila Mendes.

What about the ‘average person in the street’?

Based on the growing number of mainstream jewellery designers and retailers around the world adopting lab-grown diamonds, it’s safe to assume consumers are welcoming them as an option.

And given they sell for around two-thirds the price of an equivalent mined diamond, it’s not surprising they’re getting a lot of traction.

How are they affecting the Engagement Ring market?

When lab-grown diamonds first made their presence felt as a serious competitor in the jewellery industry, many commentators doubted they would ever have much of a role to play in the engagement ring marketplace.

They assumed the ‘tradition and romance’ attached to mined diamonds would keep lab-grown out of the space.

They could not have been more wrong.

Recent research sponsored by the International Grown Diamond Association (IGDA) released earlier this year indicates that over 65% of Millennials actively shopping for an engagement ring would consider a lab-grown diamond.

Of those, 23% said they would buy a ring featuring lab-grown diamonds.

Another interesting statistic revealed in the same report was that awareness of lab-grown diamonds by consumers went from around 9% in 2010 to 51% in 2018.

Our own experience bears this out.

In the ten years we were in business up to 2017, we could’ve counted the number of lab-grown diamond enquiries we had on one hand. These days we get at least one enquiry a week.

Why the big shift to lab-grown?

Market research is showing that consumers are choosing lab-grown for two main reasons:

• Social & eco-credentials; and
• Cost saving.

The lab-grown industry has done a great job promoting itself against the mined diamond establishment – targeting the industry’s weak spots: cost, relatively poor environmental performance and pervasive human rights abuses.

These are hot topics for jewellery buyers in general, not just Millennials.

In the bridal space, conventional wisdom is that Millennials tend to value experiences over ‘stuff’. Hence they’re choosing to reduce the amount they spend on things like an engagement ring. Instead they’re spending more on experiences like their honeymoon.

As it turns out, lab-grown diamonds offer couples the opportunity to own a real diamond engagement ring and yet spend thousands less than they otherwise would.

So … are lab-grown diamonds here to stay?

Short answer: Most likely ‘yes’.

And that’s not just because they’re popular. The reality is diamond mining itself is not sustainable in the long-term.

In 2015, Better Diamond Initiative (BDI) reported that more than 30 major diamond mines would reach the end of their economically viable lives by 2030. Further, it’s expected that the majority of global reserves will be depleted by 2050.

That’s only 30-odd years away and well within the lifetimes of many people reading this.

Unless another option develops in the meantime, it seems almost inevitable that lab-grown diamonds are here to stay. Ultimately, there will be no alternative if you want a new diamond.