Lab Grown Diamonds to follow rapid US growth

Thursday 12th December 2019The saying goes, “Pioneers end with arrows in the back and settlers make money”. Michael Hill International (MHI) have been criticized for…

Thursday 12th December 2019

The saying goes, “Pioneers end with arrows in the back and settlers make money”. Michael Hill International (MHI) have been criticized for their advertising of Laboratory-grown diamonds (LGD), but as an Industry magazine we feel a duty to give a voice to both sides of the story for the industry. Showcase started the ball rolling with the introduction of ALTR Created Diamonds into store. ALTR CEO Amish Shah said he has removed many arrows from his back. While some may criticize the move, MHI should be applauded by the trade for opening the doors wider by accepting that LGD has a place in the industry and in their stores. With the confusion in the industry round synthetic or created or Laboratory-grown diamonds there is no wonder retailers are also confused when promoting LGD to the consumer.
 
Our December magazine provides updates on CIBJO’s plans to create a Laboratory-grown Diamonds Committee to manage rapid changes they see in the industry. In only a matter of weeks, however, I have been inundated with fresh developments in the LGD segment, that point to rapid growth in the sector. From news of changes to tariff regulations for lab-grown diamonds, to Goldmark’s launch of lab-grown diamonds last week and Michael Hill’s announcement that their Lab-grown diamonds trial is set to expand further in the next six months. The industry has picked up pace to prepare for a steep growth curve, that has been seen in the US over recent years.
 
An interview this month with the CEO of ALTR Created Diamonds, on Fox News in the US, referred to Lab-Created Diamonds as a US$150m industry in 2016  but estimated that in 2020 it will be a USD $1 billion industry.


For industry observers, the magnitude of this change was foreseeable. ‘Near term and high potential impact’ was how Bain & Co. categorised three interconnected trends affecting the Diamond Industry in their 2018 report – digital technologies, developments in Laboratory-grown diamonds; and generational shifts in consumer preferences. Their report predicted an annual growth rate in the sector of 15% – 20%.
 
Last month Grand View Research Inc released figures showing that while the Global Diamond Market as a whole is expected to grow at a rate of 3 per cent (CAGR) to reach well over USD 120 billion by 2030; LGD will grow at more than triple that rate, at 10% CAGR and are expected to account for USD 15 billion by 2035.
 
In January of this year, Stockhead.com quoted independent diamond analyst Paul Zimnisky, “I see the Laboratory-grown diamond jewellery market growing from $US2 billion today to $US15 billion by 2035, with market share encroaching more on the fashion jewellery market than the fine jewellery market”.


Others have been more bullish, LGD start-up, Diamond Foundry’s Martin Roscheisen was quoted in December 2018, as saying the industry could eclipse mined diamonds by 2030, citing a doubling of the company’s production and sales every quarter.


‘Innovate or perish’ is a well-worn refrain in most industries that have already felt the pain of digital disruption – in the traditionally slow moving jewellery industry however, a tidal wave of change looms high. Industry disruption was listed as the eighth biggest risk facing the Mining and Metals industry in a 2019-2020 report on the topic by EY. For mining and metals industry stalwarts, the advice has been clear: “We are now in an era of constant disruption, and it is coming from unexpected places. Instead of seeing it as a threat, you should see it as a great opportunity to innovate, evolve and thrive,” Paul Mitchell -EY Global Mining and Metals Advisory Leader.
 
At the opposite end of the spectrum, one major Australian retailer who is innovating in this space is Michael Hill, they have already expanded their initial trial of LGD’s from 11 stores to 23 stores across three countries plus its online channel in recent months and plan further expansion across its markets in the next six months. Let’s also reflect on what MHI does for the industry with their marketing strategy. All the advertising MHI do to promote their brand and products, stimulates and excites the consumer toward a jewellery purchase which we all benefit from.
 
According to Michael Hill, CEO, Daniel Bracken who is a little over a year into the job, the trial is the first of its kind for a major retailer in Australia and makes the business an industry disrupter.
 
He cites two key triggers for rapid growth in the Laboratory-grown diamond segment: The launch of DeBeers’ Laboratory-Grown Lightbox Jewellery and the planned unveiling in 2020 of DeBeers’ USD $94m manufacturing facility in Oregon – which will produce 500,000 polished carats per annum or $200m worth of sales.
 
Of the US, he says “It’s a much more mature market there and some retailers are saying that Laboratory-grown diamonds make up 20 percent of their bridal solitaire business”.


Responding to accusations that Michael Hill had not been fully compliant in its language describing Laboratory-grown diamonds across its marketing materials, the CEO said:
 
“Michael Hill has always sought to be transparent to the market and to show customers very clearly the process by which Laboratory-grown diamonds are made. As our first venture into market with Laboratory-grown diamonds we have taken a test and learn approach as we continually refine our response.
 
Mr Bracken also says the controversy is not surprising, citing the US experience as having ‘a handful of detractors’, before the industry understood and adopted the conventions for marketing Laboratory-grown diamonds.
 
“This is a game changer for the industry over time, our role is to help educate consumers along the way.”
 
Whilst many have speculated about the continued movement of DeBeers in the industry to both secure its mined diamond business and invest heavily in the LGD space. Others such as Diamond Foundry Chief Executive Martin Roscheisen, claimed that DeBeers have ‘primarily legitimised the man-made category’.
 
Legitimacy is at the heart of the controversy surrounding Laboratory-grown diamonds and it’s one that is in decline as consumer perceptions evolve and LGD gain popularity due to high affordability and low cost.


A survey by market research company MVI, showed that the attractiveness of a LGD for an engagement purchase had risen from 55 per cent in 2016 to almost 70 per cent in 2018.


While calling out manufacturing capacity limits, and other constraints such as access to technology, and funding; Bain & Company, Partner – Olya Linde also suggests the industry can have it both ways with the accessibility of Laboratory-grown diamonds for a wider consumer market, they could increase demands for diamonds in general.

Further reading:

Comment section

247 thoughts on “Lab Grown Diamonds to follow rapid US growth

  1. I’m impressed, I need to say. Really rarely do I encounter a blog that’s both educational and entertaining, and let me tell you, you have hit the nail on the head.

  2. However, it is virtually all done with tongues rooted solidly in cheeks, and everyone has absolutely nothing but absolutely love for his or her friendly neighborhood scapegoat. The truth is, he is not just a pushover. He is basically that special variety of person strong enough to take all of that good natured ribbing for exactly what it is.

  3. Pick your Party Dancers and put the names of strippers on the order form. I like to go over something people today seem to think everything is on demand when it comes to ordering strippers and Party bus that’s not the case you might want to book your shows at least 1 to 2 weeks In advance to ensure proper Service and also engage in properly Preparing your friend or loved one’s party in advance this is something that needs to be done. Thank you very much we do appreciate your business we also do accept last minute show.

  4. I wanted to check up and let you know how, a great deal I cherished discovering your blog today. I might consider it an honor to work at my office and be able to utilize the tips provided on your blog and also be a part of visitors’ reviews like this. Should a position associated with guest writer become on offer at your end, make sure you let me know.

  5. Good day! This is my first comment here so I just wanted to give a quick shout out and say I really enjoy reading through your articles. Can you recommend any other blogs/websites/forums that cover the same subjects? Thanks a lot!

  6. Have you given any kind of thought at all with converting your current web-site into French? I know a couple of of translaters here that will would certainly help you do it for no cost if you want to get in touch with me personally.

  7. Your idea is outstanding; the issue is something that not enough persons are speaking intelligently about. I’m very happy that I stumbled throughout this in my seek for one thing regarding this.

  8. Good day! This is my first comment here so I just wanted to give a quick shout out and say I really enjoy reading through your articles. Can you recommend any other blogs/websites/forums that cover the same subjects? Thanks a lot!

  9. of course like your web-site however you have to check the spelling on several of your posts. Many of them are rife with spelling problems and I find it very troublesome to tell the reality then again I will surely come back again.

  10. While this issue can vexed most people, my thought is that there has to be a middle or common ground that we all can find. I do value that you’ve added pertinent and sound commentary here though. Thank you!

  11. Im impressed. I dont think Ive met anyone who knows as much about this subject as you do. Youre truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog youve got here.

  12. Thanks for some other great post. Where else may anybody get that kind of information in such an ideal method of writing? I’ve a presentation next week, and I am at the look for such information.

  13. Cautions. drug information and news for professionals and consumers.
    ivermectin uk
    Get warning information here. Comprehensive side effect and adverse reaction information.

Leave a Reply

Your email address will not be published. Required fields are marked *

arrow-rightcaret-downchevron-leftchevron-rightclosefacebook-squarehamburgerinstagram-squarelinkedin-squarepauseplaysearchtwitter-square