DIAMONDS ARE NOT FOREVER
What defines a diamond? Is it its chemical structure, which is the argument of the synthetic manufacturers? Or, is it its provenance: created deep in the ground by Mother Earth, rather than cooked up in a machine, write and
IN a white industrial building in the rolling hills of the English countryside 16 miles from Oxford, silver machines shaped like spaceships hum inside vast laboratories. They are replicating the extreme pressure and temperatures found deep in the earth’s crust and producing, in mere weeks, what historically nature managed only over billions of years: flawless diamonds.
This is the Element Six Innovation Center, the industrial arm of De Beers, the diamond behemoth that has operated mines from the Arctic to South Africa, that created (and for most of the 20th century controlled) the global diamond market, that convinced the world “a diamond is forever” and that made diamonds synonymous with engagement rings.
Focused for decades on things as diverse as tools for oil and gas drillers, high-powered lasers and state-of-the-art speaker systems, the De Beers scientists at Element Six have moved into new territory in recent months as the company sets its sights on a lucrative market it traditionally shunned: the production of synthetic jewellery stones.
On Tuesday, De Beers will introduce Lightbox, a fashion jewellery label selling (relatively) low-budget gems with mass-market appeal. Although diamonds made by companies like Diamond Foundry in the United States and New Diamond Technology of Russia usually cost 30 to 40 per cent less than their natural counterparts, they are nowhere near as cheap as the ones from Lightbox, which will undercut its competitors by roughly 25 per cent.
Through its aggressive pricing and pointed marketing, De Beers clearly aims to be a dominant player in this growing market, while simultaneously protecting its core business.
“The big miners have held concerns about the growth of the synthetic diamond jewellery market for some time, particularly over the last decade, as the quality of stones has improved and manufacturing costs have started to fall,” said Paul Zimnisky, an independent diamond industry analyst and consultant.
De Beers, which controls about 30 per cent of the world’s supply of mined stones (down from twothirds in 1998) and owns the fine jewellery brands De Beers and Forevermark, said it was just responding to consumer demand.
“Having done our research, we see a massive opportunity to enter into the fashion jewellery market now by doing something that consumers tell us that they want, but, that no one else has done yet: synthetic stones in new and fun colours, with lots of sparkle and at a far more accessible price point than existing lab-grown diamond offerings,” Bruce Cleaver, the chief executive, said during a phone interview.
The idea would have been unthinkable even two years ago, when De Beers started its “Real Is Rare” campaign to combat the promotion of synthetic stones as alternatives to mined diamonds. Though man-made stones account for only about 2 per cent of the diamond industry’s supply, analysts have forecast a possible rise to 10 per cent by 2030.
At issue is an almost metaphysical question of what defines a diamond.
Is it its chemical structure, which is the argument of the synthetic manufacturers? Or, is it its provenance: created deep in the ground by Mother Earth, rather than cooked up in a machine?
Consumers are understandably confused. In a poll of 2,011 adults conducted this month for the Diamond Producers Association by Harris Insights and Analytics, 68 per cent said they did not consider synthetics to be real diamonds, 16 per cent said they thought they were, and 16 per cent said they were not sure. But, an acceptance of these new products has the potential to transform the diamond market, because lab-grown diamonds are endlessly replicable.
Sally Morrison, head of marketing for Lightbox, said the brand’s products were meant to be viewed by consumers as playful accessories.
“Everyone who is in this space is focusing their marketing on the bridal category,” Morrison said. “And, we believe they are missing an incredibly interesting opportunity: the self-purchasing professional and younger woman, the older woman who already has a jewellery collection”, and any woman “who doesn’t want the weight and seriousness of a real diamond for everyday life”.
The message is conveyed through packaging that is clearly labelled “laboratory-grown diamonds”, and intended to be the opposite of a velvet box. An inaugural ad campaign was styled by Micaela Erlanger, who became famous for dressing actress Lupita Nyong’o for the red carpet. Featuring a diverse cast of young models romping in denim shirts and holding sparklers and laughing, the ads come with taglines like “Live, Laugh, Sparkle”.
This is not the first time De Beers has created brands and advertising strategies in response to disruption in the diamond market since it gave up its monopoly in 2000, abandoning its 60-year policy of controlling supply and demand to concentrate on mining and marketing instead.
In 2002, after fashion brands such as Dior and Chanel began seriously penetrating the fine jewellery market, selling the importance of their design expertise, De Beers entered into a joint venture with LVMH Moët Hennessy Louis Vuitton and founded De Beers Diamond Jewelry. (De Beers had been forbidden to directly sell or distribute its diamonds in the US because of longtime antitrust issues, since settled.) Last year, De Beers bought out the 50 per cent stake owned by LVMH to take full control of the brand.
Owning the brand gives De Beers “a much better view on what you think people will pay for medium- and long-term supply,” Cleaver said. “It’s an exceptionally valuable business for us in that sense. So is Forevermark.”
That brand, which focuses on responsibly sourced gems, was created in 2008, partly in response to consumer appetite for conflict-free diamonds.
Lightbox is fully in line with this strategy. “Synthetics are fun and fashionable, but they are not real diamonds in my book,” Cleaver said. “They aren’t rare or given at life’s great moments. Nor should they be.”
Consumers are understandably confused. In a poll of 2,011 adults conducted this month for the Diamond Producers Association by Harris Insights & Analytics, 68 per cent said they did not consider synthetics to be real diamonds, 16 per cent said they thought they were, and 16 per cent said they were not sure.