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

In 2018, De Beers, the 136-year-old diamond company, shocked the jewellery industry when it announced that after years of resistance, it would begin selling lab-grown stones through a new brand called Lightbox.

Just six years later, on Friday, De Beers announced at the JCK jewellery trade show in Las Vegas that it would stop producing lab-grown diamonds for jewellery. Lightbox will continue to exist, but will source stones from existing inventory. New production will be focused on “industrial and technological applications,” and future sourcing will be considered “in due course,” according to the company.

In an exclusive interview with The Business of Fashion, De Beers chief executive Al Cook said the company is rolling out a new strategy called “Origins” to revive interest in its core business of mined diamonds, marketing them as a category, rather than simply marketing the De Beers brand.

”We truly believe we need to do better by telling the story of where the natural diamond comes from; why it’s so special,” Cook told BoF.

To do so, it’s making changes across its business. De Beers is inking new partnerships with Chinese jewellery giant Chow Tai Fook and Signet, the parent of mall mainstay jewellery brands like Kay, Zales and Jared and the largest seller of diamond jewellery worldwide, to highlight natural — also known as mined — diamonds. In the third quarter, De Beers and Signet will roll out a new campaign highlighting what it says are the “unique attributes of natural diamonds.”

Technology will also play a role: This week, it unveiled a new diamond verification instrument that can distinguish between mined and man-made diamonds, both loose and in settings, and plans to use blockchain technology that can be used to show the eventual buyer exactly where their stone came from.

As part of its “Origins’' strategy, De Beers will also eliminate $100 million in costs through restructuring and selling off non-diamond assets.

“In an era where nothing is what it seems to be, where there’s artificial intelligence, there’s deep fakes, people want authenticity,” Cook said. “A natural diamond is by definition, the epitome of authenticity. It was created a billion years ago. There are fewer and fewer of them being produced. We believe it was the right time to come back and to tell that story.”

For much of the 20th century, De Beers controlled the world’s diamond trade, and as such, much of its marketing revolved not around the De Beers brand, but the diamond category as a whole. In 1947, it essentially invented the concept of a diamond engagement ring back in 1947 with its now iconic “A Diamond Is Forever” campaign.

But by a few years into the new millennium, legal challenges had eroded De Beers’ control of the industry, and its marketing shifted to be more De Beers-specific. In 2015, the Diamond Producers Association was formed to fill that void, and in 2020, it rebranded to the Natural Diamond Council “in anticipation of a need to speak very specifically to the unique values of natural diamonds,” said David Kellie, chief executive of the NDC. Today, the organisation still markets that proposition, positioning mined diamonds as “real, responsible and rare.” Just this week, it dropped its latest campaign starring actress Lily James.

But De Beers still needs to do more to convince consumers that despite the fact that their variations are indistinguishable to the naked eye, natural and lab-grown diamonds are, in fact, different — for both the industry’s sake and De Beers’ itself.

After two blockbuster years during the pandemic, De Beers had a very tough 2023: Sales fell by a third, forcing it to drastically pull back on diamond production and stockpile stones in a bid to stop slumping prices. At its first sale of 2024, it cut prices by 10 percent.

The stakes for a turnaround are high as majority owner Anglo-American explores options to divest from the company, including a sale or spin off. The collapse of a $49 billion takeover deal of Anglo-American from its rival BHP could add further pressure to separate from its underperforming gemstone unit.

Diamond suppliers generally have faced a challenge in consumers’ embrace of lab-grown diamonds, which has been growing for the past decade. In 2023, they made up around 17 percent of the overall market, according to diamond research firm Edahn Golan. A survey from wedding website The Knot also found that 46 percent of couples planned to select a lab-grown stone for their engagement rings.

But as demand for lab-grown diamonds has grown, so has supply, which has impacted prices. Lab-grown stone prices have fallen since 2015: Then, a man-made stone was sold at about a 10 percent discount to a mined one, today that number is about 90 percent.

In that sense, it’s an effective moment for natural diamonds to make a marketing comeback.

When it comes to selling jewellery, “marketing is the most important factor,” said diamond industry analyst Paul Zimnisky.

“It’s establishing natural diamonds as a product category,” he said, adding that doing so is more necessary today, as the industry faces “immense competition from lab grown diamonds but also just other luxury discretionary products and just a younger generation of consumers that wasn’t exposed to ‘A Diamond Is Forever’.”

That generation now has a chance to get to know the campaign for themselves after De Beers relaunched “A Diamond Is Forever” last year. Of course, it’s a very different environment: There’s endless competition for consumer attention, and to bring the iconic campaign into the 20th century, it’ll need some updates.

“It’s about marketing towards the diverse people who want to mark the most important moments in their life with a diamond,” said Cook. “In 1947, that was a white boy meets a white girl, that’s not the case now.”

The imagery De Beers released as part of the campaign last fall focussed on highlighting their diamonds’ natural components, with taglines like “Artist credit: Mother Nature,” and “Nature’s mic drop.” The company is also planning to ramp up its messaging around its sustainability efforts, including plans to be carbon neutral by 2030.

The hope is not to eliminate the competition from lab-grown diamonds, Cook said — a goal that, at this point, would be impossible to achieve. Even luxury labels are buying in, with Prada, watchmaker TAG Heuer and LVMH-owned jeweller Fred all rolling out lab-grown products in recent months. Instead, it’s about positioning and getting consumers to think about the two differently.

“One is a very precious rare stone that you bite to commemorate the most important moments of your life,” said Cook. “The other costs less than the cost of the dinner you’re having to celebrate your engagement.”

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Compiled by Yola Mzizi.