Three years later, 2018 was a "watershed" year. When the natural diamond giant De Beers launched Lightbox Jewelry, the category of laboratory-made diamonds continued to grow.
“In the past few years, laboratory-grown diamonds have completely changed the pattern of diamond jewelry,” said Craig Miller, a second-generation diamond dealer and CEO of JC Jewels, which was the first diamond supplier in Australia to adopt laboratory-grown diamonds. one. category.
"From a consumer's point of view, De Beers' entry into the laboratory incubation field accelerated acceptance, participation and verification. Since then, consumer demand and participation have driven retailers to participate, and now we look at the laboratory Cultivated diamonds become mainstream," Miller observed.
Grown Diamonds Director Miriam Neubauer confirmed that consumer awareness of lab-made diamonds has increased significantly.
"Two years ago, consumers did not know the difference between diamond simulants such as cubic zirconia and laboratory-grown diamonds; however, today they have received more education and research and understand that they are optical, physical, and chemical. The same-the only difference is their source," she told the jeweler.
This is not only reflected in Australia, but also on a global scale. Phil Edwards, Managing Director of Duraflex Group Australia, which distributes the Swarovski diamond collection, said: “The fact that global brands like Swarovski have launched their own collections of synthetic diamonds highly illustrates the importance and importance of this category.
"We strongly believe that consumer demand for more affordable and sustainable products without compromising the actual quality of diamonds is a market trend that will continue to grow and will have a positive impact on the development trajectory of the category."
At the same time, Catherine Martin, head of communications at the US-based Diamond Foundry, pointed out that “consumer interest in and demand for laboratory-grown diamonds has increased dramatically; people began to accept this new product category almost overnight.”
In fact, a study conducted in 2020 by the marketing company The MVEye (formerly MVI Marketing) found that 80% of consumers surveyed knew about laboratory-made diamonds, compared with less than 10% in 2012.
Martin observes that new demand comes from previously untouched categories, such as the high-end watch market; at the same time, major vertically integrated retailers such as Pandora have launched dedicated laboratory creation series to take advantage of consumer demand for products.
At the same time, according to the "Global Diamond Industry 2020-21: Brilliance under Pressure" written by the business strategy and research consulting firm Bain & Company, the diamond production in the laboratory last year reached 6-7 million carats.
This number is still dwarfed by the category of natural diamonds; Bain & Co. estimates that 111 million carats of natural diamonds will be produced in 2020, mainly due to the COVID-19 pandemic; from 2010 to 2018, the global average production was about 130 million carats, in 2017 It reached a peak of 152 million carats annually.
However, production capacity continues to rise, and the Brilliant Under Pressure report points out that compared with 2019, there will be a “double-digit” growth in 2020, and an increase of 15-20% from 2018 to 2019.
This growth is mainly driven by the expansion of production in China, where most of the world's laboratory-made diamonds (approximately 50% to 60%) are manufactured using the high pressure high temperature (HPHT) method; however, the United States and India are using chemical vapor Deposition (CVD) technology "becomes a major production center."
Diamond Foundry uses a proprietary CVD mechanism to produce diamonds made in its laboratory, and recently announced plans to build a new solar production facility worth 740 million euros in Spain.
The factory is expected to have a production capacity of 10 million carats, part of which will be used to make jewelry.
Diamond Foundry also plans to expand its hydroelectric power generation facility in the United States, and its jewelry retailer Vrai recently opened stores in Shanghai and Los Angeles. "There will be more in the future," Martin said.
At the same time, Element Six-the diamond manufacturing division created by De Beers Laboratories to supply light box jewelry-opened a new $94 million factory in Oregon, USA in October 2020.
The new facility will support Lightbox’s recently launched white, pink, and blue laboratory-made diamonds up to 2 carats in size, as well as the Finest series of VVS D–F excellent cut laboratory-made diamonds at a price of US$1,500 per carat – it pointed out "Far below" the current price.
The Finest product line is the result of a new proprietary engineering process developed by Element Six, combining existing CVD technology with further refinement processes that can enhance the color of gemstones.
Steve Coe, CEO of Lightbox Jewelry, said in an interview with Jeweler: "Currently, our focus is on developing and expanding the Lightbox business. Our state-of-the-art new manufacturing facility in Portland, Oregon was put into operation at the end of last year, which allowed us to Have the ability to substantially expand distribution to consumers in the next few months.
"This includes developing our own e-commerce platform lightboxjewelry.com and significantly expanding the list of retail partners we supply. You can expect to see more Lightboxes in the coming months and years."
He added: "We have seen a clear trend of larger sizes and higher quality, and we are in a leading position in this regard." However, although the categories created by the laboratory seem to be on a positive trajectory, challenges remain.
Above: Moi Moi Fine Jewelry
Although consumer awareness and demand for laboratory-made diamonds have made great progress in recent years, many believe that the most pressing challenge is still education, and some contributors have observed that the market is full of "misinformation."
"We found that many consumers are still relatively ignorant of what lab-grown diamonds are, and obviously still need to provide consumers with education and information," Coe said.
"Although it is the same material as natural diamonds and has the same optical and physical properties, the great value proposition of the Lightbox laboratory-grown diamonds is that they provide consumers with excellent quality at a very affordable price, allowing consumers to An informed purchase decision."
Miller shared similar insights, noting that there is a clear “lack of consumer education”.
"If you search for lab-grown diamonds on Google-this is the beginning of many customer journeys-online information and education are limited, and most of the content you find can be misleading, partly because of ties with the mining department and the laboratory. The other side," he explained.
According to a survey of more than 1,000 consumers aged 25-60 by The Plumb Club in the United States in 2021, 79% of consumers said they knew about laboratory-grown diamonds and their use in high-end jewelry—and 41 % cent does not know how they are different from natural stone.
This suggests that more resources should be allocated to educate consumers.
Miller also believes that retailers “lack much-needed education in the Australian and New Zealand markets, where laboratory-grown diamonds are rapidly gaining popularity.”
Neubauer said that some jewelers are still "not open-minded" and "refuse to sell lab-grown diamonds to consumers."
Others in the industry have noticed misunderstandings about the difference between HPHT and CVD and the type of post-growth treatment applied to gemstones.
Edwards said, "In addition to improving the usability of the product in Australia, the ongoing education process is absolutely key."
"Historically, the main challenge has been the misunderstanding or rather limited understanding of the quality of laboratory-grown diamonds, and the price difference with natural diamonds is not large enough," he explained.
"However, as consumers become more aware of the laboratory manufacturing process and the same properties of diamonds and laboratory-grown diamonds, there is a significant shift, and prices have fallen and are now stabilizing."
It is worth noting that price has been the crux of the laboratory-made diamond category since its inception.
Diamond industry analyst Edahn Golan recently commented in an interview with the US jewelry industry publication JCK Online: "We see continued demand and continued price declines. What we see is the kind of "sickness" we suffer in the natural diamond industry. .
"Many products are provided in the form of memos, and there is fierce competition among wholesalers. In addition to this, we also see the typical elements of technology-driven products: for example, production costs are falling."
According to the analysis of Bain & Company, in 2020, the retail price of a 1 carat, G color, and VS clarity laboratory-made diamond will only drop to 35% of the equivalent mined diamond; in 2019 and 2018, this number will be 50 %, 65% in 2017.
The gap between other types of diamonds is even greater, with the price difference between the same laboratory-made and natural colored diamonds as high as 1,000%.
Despite the decline in production costs and retail prices, the wholesale price of laboratory-made diamonds remained stable throughout 2020, resulting in shrinking profit margins for traders and jewelry manufacturers.
Nevertheless, diamond industry analyst Paul Zimnisky wrote in 2020, “When analyzing the wholesale and retail prices of unbranded man-made and natural diamonds, the retail gross margin of popular carat-sized man-made diamonds appears to be as high as 1.8, which is twice that of natural diamonds. ."
Golan told JCK Online, "[Retailers are] doing their best to protect their profits.
"Therefore, if manufacturers increase the price of a certain commodity, they will increase the price to consumers. On the other hand, if the wholesaler lowers the price, the retailer is also more flexible in pricing. So consumers are enjoying it. ."
Brett Bolton, director of Biron Laboratory Grown Diamonds, explained: “The price drop is a good thing for the fashion side of the market, but for some people, if they are used in engagement rings or as a choice of 2 carat natural diamonds.”
However, lower prices are not necessarily negative, and retailers can adopt many advantages and sales strategies.
Bolton said: "When selling these diamonds, retailers must pay attention to the price advantage and the fact that they will not scratch or change color over time-not that they are'cheaper diamonds'."
Bolton pointed out that price pressures have also stimulated innovation in laboratory creation categories, leading to "more experimental colors, shapes, and growth techniques."
Martin of Diamond Foundry said: "We are always seeking to create better diamonds-bigger and higher quality. We have not yet cracked the D color level of larger diamonds; it is still very difficult to achieve the highest quality level of diamonds using the most advanced technology. ."
Above: Moi Moi Fine Jewelry
The affordability of laboratory-made diamonds makes them accessible to new consumers-this trend is most evident in the fancy color diamond field, where extremely rare and precious pink and blue diamonds are beyond the financial means of most consumers.
"We believe that there is a great opportunity to cultivate diamonds in colored laboratories. Our diamonds can present beautiful pink and blue tones," Coe said.
"Colored natural diamonds are very expensive, and for the vast majority of consumers, they are actually unaffordable. For the first time, lightbox colored laboratory-grown diamonds have given consumers the opportunity to own these magnificent diamonds at an affordable price."
Many in the diamond industry believe that the natural origin of laboratory-made diamonds is fashion jewelry, gifts and self-purchasing - Bolton calls fashion jewelry the driving force of "mass growth" - engagements, weddings and luxury are only reserved for natural diamonds.
Coe of Lightbox Jewelry observes, “It is now clear that the high quality and more affordable prices of laboratory-grown diamonds provide opportunities for more frequent gifting and self-purchase.
"This is where we see a truly exciting opportunity for lab-grown diamonds to develop a true additive jewelry business and take a slice of other luxury/fashion products (such as accessories and handbags).
He added: “As other brands recognize this opportunity in the fashion sector, we see the category continue to expand.”
Pandora Jewelry is the world's largest jewelry company by sales. Earlier this year, it launched its first series of products centered on laboratory-made diamonds, Pandora Brilliance.
At the same time, it promotes the decision to phase out natural diamond jewellery (which accounts for a small part of its total production) in order to capitalize on the growing consumer sentiment for sustainable and ethical products.
Pandora CEO Alexander Lacik said at the time: "I am proud to announce the launch of Pandora Brilliance. This is a new and beautifully designed jewelry collection featuring laboratory-made diamonds. They are both a symbol of innovation and progress, and they are also enduring. The beauty of decline is a testament to our sustained and ambitious sustainable development agenda."
The company commissioned the corporate governance company Sphera to provide an independent third-party assessment of the diamond production process manufactured in the CVD laboratory, from raw materials to synthesis, cutting and polishing, and transportation.
Sphera’s report found that “in most cases,” the electricity consumption during the synthesis process accounts for “over 90%” of the total carbon dioxide emissions; emissions per carat range from 612 kilograms of laboratory-made diamonds produced in India to 100 % Renewable energy sources of diamonds produced in Europe range from 17 kilograms.
The 2019 report commissioned by the Diamond Producers Association (now the Natural Diamond Council) estimates that natural diamonds produce 160 kilograms of carbon dioxide per carat.
Pandora said that by 2022, the laboratory-made diamonds in the Brilliance series will be manufactured using 100% renewable energy.
Of course, the ecological certification of the entire laboratory creation department is more difficult to objectively quantify, and there are great differences between different manufacturers.
Despite this, many lab-made diamond producers are still committed to achieving a transparent and sustainable supply chain.
Diamond Foundry's Martin said: "The demand is far greater than the supply. Meeting this demand and doing so sustainably will continue to drive us.
"Sustainability and respect for the earth's resources are the core attributes of our business, and we focus our growth on 100% renewable energy sites."
Another US-based manufacturer, WD Lab Grown Diamonds, is the first manufacturer to be certified by SCS Global Services. SCS Global Services is an international standard development company specializing in sustainability and quality performance, according to its sustainable diamond certification standard.
This grants WD Lab Grown Diamonds a third-party authorization to use the "sustainable certification" and "climate neutral certification" statements in its products.
Miller believes that this is positive for the industry as a result of "introducing a new level of transparency."
From a consumer's point of view, Neubauer observes that laboratory-made diamonds are considered "a good choice for those with a budget, ecologically conscious people, and ethical conscious people." .
A recent consumer study conducted by The MVEye (formerly MVI Marketing) found that consumers “always regard the sustainable and environmentally friendly information of laboratory-grown diamonds as their primary consideration”, and the most compelling purchase trigger is “be able to Trade diamond size and quality at the same price as smaller mined diamonds".
When laboratory-made diamonds first entered the jewelry category, there was a heated debate about their impact on the natural category. "In the beginning, it felt like a competition between the two," Neubauer observed. "People are worried that the sales of laboratory-grown diamonds will exceed the sales of natural diamonds. However, it is increasingly clear that both natural diamonds and laboratory-grown diamonds can be sold at the same time, targeting different groups of people," she said.
Bolton added, “When laboratory-grown diamonds were introduced to the market for the first time, we had many jewelers and competitors who said,'We will never store them.'
"Today, we find that almost everyone thinks these gems have a place in the market-and there are more than half of them in the store!"
Edwards pointed out that the perception of laboratory-grown diamonds and natural diamonds—and their willingness to stock them—"depends on the individual retail stores and the message they want to convey to their customers."
"Now that pricing has stabilized and quality education has become stronger, this relationship can be more easily defined and separated in various retail stores," he added.
Despite this, there have been small-scale conflicts this year, mainly focusing on advertising terminology and moral propositions. In February, the Natural Diamond Council (NDC) submitted Diamond Foundry and its jewelry brand Vrai to the US advertising regulator, the National Advertising Department (NAD), to challenge the description and nomenclature used in digital marketing.
“NAD determined that Diamond Foundry must effectively disclose that its diamonds are man-made in accordance with the Federal Trade Commission (FTC) Jewelry Guidelines. NAD further found that, consistent with the FTC Jewelry Guidelines and FTC Dot Com’s disclosure publications, advertisers should report their [Laboratory Cultivation] Diamonds] are distinguished from mining diamonds," the NAD statement read.
The following month, NAD took action on Diamond Foundry's complaint against the NDC, which claimed that natural-mined diamonds produced "three times less" carbon emissions than lab-made diamonds.
NAD found that the NDC’s evidence for this claim was “not reliable enough” and was “concerned that such claims would convey broader implicit information about the overall environmental benefits of mining diamonds and man-made diamonds”, and recommended that it be deleted along with online advertisements. To "The scarcity of mined diamonds [and] the resale value of mined diamonds and man-made diamonds."
The agency also determined that NDC’s use of the term “real” to describe mined diamonds may erroneously imply that laboratory-made diamonds and mined diamonds have different chemical or physical properties, and that consumers “may be wrong Ground [lab-created diamonds], such as Diamond Foundry, and imitation diamonds, such as Moissanite and cubic zirconia".
In May, organizations including NDC, CIBJO, World Diamond Council (WDC), Responsible Jewellery Council (RJC) and International Diamond Manufacturers Association publicly called on Pandora Jewelry to withdraw the content of its statement announcing its decision to stop stocking natural diamonds . Diamond.
Although calling the Pandora Brilliance series "an active expansion of the jewelry industry," these organizations explained that "the misleading narrative created by the Pandora announcement implies that the natural diamond industry is neither ethical nor the driving force behind Pandora's shift to laboratory-growing diamonds, especially Considering the insignificant number of diamonds in the Pandora series, this may have an unexpected but significant impact on communities in developing countries."
According to research commissioned by the NDC (called the Diamond Producers Association at the time), it was discovered in 2019 that diamond mining created social benefits not created by laboratories, including an estimated $16 billion annually for communities, mainly in developing countries. Through direct employment, purchase of goods and services, and funding of social projects.
Nonetheless, Martin of Diamond Foundry stated that diamond mining companies are in a "difficult position" because mining "necessarily consumes natural resources; as the name suggests, it is unsustainable."
"Recently, North America has issued important rulings to improve the marketing transparency of mining diamonds. The most important thing is to ensure market transparency, wide consumer choices, and awareness of diamond sources and environmental impact," she explained.
At the same time, the Responsible Jewellery Council recently announced that it will develop best practice standards specifically for "Laboratory Grown Materials" (LGM), surpassing its existing practice guidelines.
Iris Van der Veken, Executive Director of the Responsible Jewellery Council, said: “The development of standards for LGM is an important strategic move of the Responsible Jewellery Council and underscores our commitment to ensure that all jewelry is sourced, manufactured and marketed in a responsible manner. This Everything has to do with consumer confidence.
"The standard not only provides manufacturers and retailers with a clear and robust framework, but also reassures customers that LGM manufacturers and sellers follow strict procedures to ensure the credibility and transparency of their operations."
Miller observed, "Every industry is facing challenges, and mining space is being challenged by laboratory cultivation." Both mining and laboratory cultivation need to play to their strengths and see what appeals to each customer. Continued negative contact between the two parties will only encourage consumers to spend money in other industries. "
Edwards added, "The lower prices, increased consumer demand and acceptance-and higher market awareness in general-highlight that laboratory-grown diamonds are rapidly becoming a core and essential category in the industry."
Obviously, although the category of diamonds manufactured in the laboratory is still small, it has potential and offers jewelry retailers an opportunity to attract new customers—without affecting existing diamond sales.
Globally, laboratory-made diamonds account for approximately 3% of diamond sales, with the United States being the largest retail market.
"The United States leads Australia and Europe in the sales of laboratory-grown diamonds," said Miriam Neubauer, director of Grown Diamonds.
"They were the pioneers in bringing sales to the masses and promoting the'news' there. Australia followed suit about two years later and we noticed a sharp increase in sales in the past two years," she explained.
It is worth noting that the Michael Hill jewelry chain began trialing laboratory-made diamonds in a Queensland store at the end of 2019, and later that year launched a series of laboratory-made diamond engagement rings-diamonds made by Fenix Diamonds. Its current laboratory products also include earrings.
Lightbox Jewelry currently ships to Australia through its e-commerce website, as does Diamond Foundry's Vrai.
Craig Miller, CEO of JC Jewels, was one of the first suppliers in Australia to adopt the laboratory cultivation category. He said that the local market has great potential.
"Australia is following the United States, but it is 6 to 12 months behind. Consumers are participating and welcoming this new option. We are seeing increasing demand, but it is still too early."
Edwards believes that Australia is slower than the United States and Europe in "accepting and accepting laboratory-grown products", and the market is still "proportionally" smaller.
However, he predicts "strong growth in this category" as laboratory-made diamonds become more widely available and accepted-"especially considering that consumer demand is now directly driving more sustainable, The category and supply of more affordable products," he added.
Miller added, “Laboratory cultivation will continue to exist; in the future, I will see most Australian retailers provide laboratory-grown and mined diamonds at the same time. When retailers’ inventory management, scope, marketing strategy, staff training and staff At the time of delivery, the importance and respect of laboratory-grown diamonds will reach the same level as mining diamonds."
Arabella Roden is the editor of "The Jeweler" and has written in-depth topics about the jewelry industry. She has ten years of media experience in Australia and the UK as a reporter and associate editor.