The Diamond Industry’s Battle for Your Ring Finger

Sarah Jessica Parker (0:02)

Bloomberg Audio Studios.

Al Cook (0:04)

Podcasts, radio, news.

SPEAKER_3 (0:08)

We have a full house tonight, so thank you so much for enjoying these events, and thank you for being here.

Stacey Vanek Smith (0:16)

Colleen Rooney is an executive at Signet Jewelers Limited, which owns Jared, Kay, and Zales. She's one of a handful of speakers at a swanky Italian dinner on the Upper East Side of Manhattan. The mood is light, everyone is joking around.

SPEAKER_5 (0:28)

This is my real hair, so it is not lab-grown, it is all mine.

Stacey Vanek Smith (0:34)

The restaurant is full of high-powered diamond industry leaders. The topic on the menu?

SPEAKER_6 (0:40)

Many of you are fully aware of the disruption that's happened with lab-grown diamonds.

Stacey Vanek Smith (0:47)

Lab-grown diamonds have caused a massive panic for the diamond industry. You can grow them in days. They're beautiful and chemically identical to diamonds that come out of the ground. They are also cheap, really cheap. It costs less than $20 a carat to grow a diamond.

At the same time, the stigma around buying a synthetic diamond is fading away. Even celebrities like Sarah Jessica Parker are on board. She just launched a collection of lab-grown diamonds with Astria London.

Sarah Jessica Parker (1:17)

I don't even look anymore at the collection and think, God, these are really exquisite lab-grown. I don't even see it anymore. I walked in today to see the collection in person finally, and I just thought, my God, those are beautiful diamonds.

Stacey Vanek Smith (1:35)

A pair of SJP's pink lab-grown diamond earrings cost about $1,300.

A natural pair could run you tens of thousands. OG diamond companies have spent hundreds of millions of dollars to stay competitive with new product lines and marketing campaigns.

SPEAKER_7 (1:53)

Every diamond is a story.

Stacey Vanek Smith (1:56)

But will the story resonate with buyers as less expensive, equally sparkly alternatives flood the market?

I'm Stacey Vanek Smith in for David Gura and Sarah Holder, and this is the Big Take from Bloomberg News. Today on the show, with the diamond industry under threat from lab-grown alternatives, how the old guard is fighting back.

Edahn Golan (2:26)

When a jewelry store sells a diamond, it's not really selling a diamond, it's selling a story, a whole package.

Stacey Vanek Smith (2:35)

Edahn Golan is the founder of Tenoris, a jewelry industry consultancy and data analytics company.

Edahn Golan (2:42)

Diamonds had a fantastic story for literally centuries.

Stacey Vanek Smith (2:48)

Diamonds formed in the earth billions of years ago. They're made of carbon, crystallized under extreme heat and pressure. Each stone is unique, perfectly imperfect, the hardest substance on earth.

Until recent decades, there wasn't a way to replicate that process in a lab. And diamond companies like De Beers, which commands about a third of the world's mined diamonds, held a pretty firm grip on the diamond market.

Edahn Golan (3:13)

De Beers really, right after World War II, was really good at taking the idea of a diamond ring and the value of a engagement ring, putting them together and tying to the idea of love and emotion.

SPEAKER_9 (3:29)

The diamond engagement ring, how else could two months' salary last forever? A diamond is forever, De Beers.

Stacey Vanek Smith (3:38)

De Beers' classic slogan, a diamond is forever, caught fire. Just a few years ago, engagement and wedding rings were responsible for about a third of mined diamonds' sales revenue. Today, it's closer to a quarter.

That's because last year, more than 60% of couples in the US opted for a lab-grown ring. That's according to data from The Knot, a wedding planning website.

Edahn Golan (4:01)

We're looking at about $6,000 for engagement rings set with natural diamonds versus $2,200 for those set with lab-grown.

Stacey Vanek Smith (4:13)

Oh, so like less than half.

Edahn Golan (4:15)

Yes, and that's why I think it's a cultural change, and it's not about something valuable. It's about buying, sort of still buying into the tradition.

Stacey Vanek Smith (4:25)

The technology to grow diamonds in a lab dates back to the 1950s. But for a long time, synthetic stones were mostly used for industrial products like drill bits. Jewelers often didn't stock lab-grown diamonds or hid them away.

And that mattered, because until 2020, almost all diamonds were bought in person. But when COVID hit, suddenly people were shopping online.

Edahn Golan (4:49)

People were sitting at home and had nothing to do with their money. They're kind of having the conversation that you and I are having. We see each other from our shoulders up.

Stacey Vanek Smith (4:57)

And people basically wanted Zoom-friendly bling.