Exclusive: Inside De Beers’ About-Face on Lab-Grown Diamonds

In 2018, De Beers, the 136-year-old diamond firm, shocked the jewellery industry when it introduced that after years of resistance, it might start promoting lab-grown stones via a brand new model referred to as Lightbox.

Simply six years later, on Friday, De Beers introduced on the JCK jewelry commerce present in Las Vegas that it might cease producing lab-grown diamonds. Lightbox will live on, however will supply stones from current stock. New manufacturing shall be centered on “industrial functions,” and future sourcing shall be thought-about “sooner or later,” in keeping with the corporate.

In an unique interview with The Enterprise of Style, De Beers chief government Al Cook dinner stated the corporate is rolling out a brand new technique referred to as “Origins” to revive curiosity in its core enterprise of mined diamonds, advertising and marketing them as a class, somewhat than merely marketing the De Beers model.

”We actually imagine we have to do higher by telling the story of the place the pure diamond comes from; why it’s so particular,” Cook dinner instructed BoF.

To take action, it’s making adjustments throughout its enterprise. De Beers is inking new partnerships with Chinese language jewelry big Chow Tai Fook and Signet, the guardian of mall mainstay jewelry manufacturers like Kay, Zales and Jared and the biggest vendor of diamond jewelry worldwide, to spotlight pure — also called mined — diamonds. Within the third quarter, De Beers and Signet will roll out a brand new marketing campaign highlighting what it says are the “distinctive attributes of pure diamonds.”

Expertise may also play a job: This week, it unveiled a brand new diamond verification instrument that may distinguish between mined and man-made diamonds, each free and in settings, and plans to make use of blockchain technology that can be utilized to point out the eventual purchaser precisely the place their stone got here from.

As a part of its “Origins’’ technique, De Beers may also eradicate $100 million in prices via restructuring and promoting off non-diamond property.

“In an period the place nothing is what it appears to be, the place there’s synthetic intelligence, there’s deep fakes, individuals need authenticity,” Cook dinner stated. “A pure diamond is by definition, the epitome of authenticity. It was created a billion years in the past. There are fewer and fewer of them being produced. We imagine it was the precise time to come back again and to inform that story.”

For a lot of the twentieth century, De Beers managed the world’s diamond commerce, and as such, a lot of its advertising and marketing revolved not across the De Beers model, however the diamond class as a complete. In 1947, it basically invented the idea of a diamond engagement ring again in 1947 with its now iconic “A Diamond Is Without end” marketing campaign.

However by a number of years into the brand new millennium, authorized challenges had eroded De Beers’ management of the trade, and its advertising and marketing shifted to be extra De Beers-specific. In 2015, the Diamond Producers Affiliation was shaped to fill that void, and in 2020, it rebranded to the Pure Diamond Council “in anticipation of a necessity to talk very particularly to the distinctive values of pure diamonds,” stated David Kellie, chief government of the NDC. Right this moment, the organisation nonetheless markets that proposition, positioning mined diamonds as “actual, accountable and uncommon.” Simply this week, it dropped its newest marketing campaign starring actress Lily James.

However De Beers nonetheless must do extra to persuade shoppers that even supposing their variations are indistinguishable to the bare eye, pure and lab-grown diamonds are, in truth, totally different — for each the trade’s sake and De Beers’ itself.

After two blockbuster years through the pandemic, De Beers had a very tough 2023: Gross sales fell by a 3rd, forcing it to drastically pull again on diamond manufacturing and stockpile stones in a bid to cease slumping costs. At its first sale of 2024, it cut prices by 10 percent.

The stakes for a turnaround are excessive as majority proprietor Anglo-American explores choices to divest from the corporate, together with a sale or spin off. The collapse of a $49 billion takeover deal of Anglo-American from its rival BHP may add additional strain to separate from its underperforming gemstone unit.

Diamond suppliers typically have confronted a problem in shoppers’ embrace of lab-grown diamonds, which has been rising for the previous decade. In 2023, they made up round 17 p.c of the general market, in keeping with diamond analysis agency Edahn Golan. A survey from wedding website The Knot additionally discovered that 46 p.c of {couples} deliberate to pick out a lab-grown stone for his or her engagement rings.

However as demand for lab-grown diamonds has grown, so has provide, which has impacted costs. Lab-grown stone costs have fallen since 2015: Then, a man-made stone was bought at a couple of 10 p.c low cost to a mined one, at the moment that quantity is about 90 p.c.

In that sense, it’s an efficient second for pure diamonds to make a advertising and marketing comeback.

In terms of promoting jewelry, “advertising and marketing is crucial issue,” stated diamond trade analyst Paul Zimnisky.

“It’s establishing pure diamonds as a product class,” he stated, including that doing so is extra essential at the moment, because the trade faces “immense competitors from lab grown diamonds but additionally simply different luxurious discretionary merchandise and only a youthful technology of shoppers that wasn’t uncovered to ‘A Diamond Is Without end’.”

That technology now has an opportunity to get to know the marketing campaign for themselves after De Beers relaunched “A Diamond Is Without end” final 12 months. In fact, it’s a really totally different surroundings: There’s infinite competitors for shopper consideration, and to carry the long-lasting marketing campaign into the twentieth century, it’ll want some updates.

“It’s about advertising and marketing in the direction of the varied individuals who wish to mark crucial moments of their life with a diamond,” stated Cook dinner. “In 1947, that was a white boy meets a white lady, that’s not the case now.”

The imagery De Beers launched as a part of the marketing campaign final fall focussed on highlighting their diamonds’ pure parts, with taglines like “Artist credit score: Mom Nature,” and “Nature’s mic drop.” The corporate can also be planning to ramp up its messaging round its sustainability efforts, together with plans to be carbon impartial by 2030.

The hope is to not eradicate the competitors from lab-grown diamonds, Cook dinner stated — a aim that, at this level, could be inconceivable to realize. Even luxurious labels are shopping for in, with Prada, watchmaker TAG Heuer and LVMH-owned jeweller Fred all rolling out lab-grown merchandise in latest months. As a substitute, it’s about positioning and getting shoppers to consider the 2 otherwise.

“One is a really treasured uncommon stone that you just chew to commemorate crucial moments of your life,” stated Cook dinner. “The opposite prices lower than the price of the dinner you’re having to rejoice your engagement.”

THE NEWS IN BRIEF

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PEOPLE

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Compiled by Yola Mzizi.