A diamond is a diamond, whether extracted from the earth or grown above earth. This is a fact, a truth that is now accepted and recognized by experts and leading consumer bodies such as the US Federal Trade Commission (FTC).
This was acknowledged in the latest revisions introduced by the FTC to its Jewelry Guides that are meant to assist in correctly marketing jewellery to consumers. The FTC not only revised its primary definition of diamond, making it clear that real diamonds could be from above earth or below, but it also removed the descriptor ‘synthetic’ from its list of prescribed terms for lab-grown diamonds.
The International Grown Diamond Association (IGDA) along with lab-grown diamond manufacturers have long argued that the term ‘synthetic’ was inappropriate as it could confuse consumers about the real value and authenticity of the product.
The FTC based its revisions on its own analysis of the diamond market, acknowledging technological advancements over the past 10–15 years in growing diamonds above ground, which are identical to diamonds extracted from ground.
They rejected the suggestions from mined diamond trade organisations to align FTC’s revisions on the existing industry standards such as CIBJO’s guides or the International Organisation for Standardisation (ISO).
FTC noted that these industry standards weren’t necessarily meant for consumer marketing and, in the end, the federal body developed an appropriate and, more importantly, a technically correct terminology. The IGDA believes the revised definitions are fair and inclusive, allowing both mined and grown diamonds to be marketed to customers.
We believe that lab-grown diamonds offer a significant value and legitimate choice for consumers. Consumer confidence and communicating 21st Century facts when marketing are critical for the survival of any industry. IGDA advocates fair representation to consumers for both grown or mined diamonds, with the customer having the option and the right to choose.
MVI Marketing, an independent market research firm, has been tracking the lab-grown market for years and reports that both consumer awareness and preference had been increasing by about 3–5 per cent annually until 2016. However, around mid 2017 the numbers jumped up by 12 per cent while one year later the research reported an 18 per cent increase. This is reflective of consumer preference and demonstrates future expectations.
Writing for the Wall Street Journal, Paul Zimnisky, an independent diamond industry analyst, wrote an article on August 28, 2018 in which he stated: “At an estimated $USD 1.9 billion dollars today, the lab-grown diamond jewellery market is forecasted to grow at 22 per cent annually to $USD 5.2 billion by 2023 and to $USD 14.9 billion by 2035, equating to a longer-term growth rate of about 9 per cent.”
As consumer awareness for lab-grown diamonds accelerates (as research indicates), acceptance of the product has also climbed. In October 2018, MVI conducted research about lab grown diamonds which found a whopping 81 per cent of respondents said they would definitely buy or consider a lab-grown diamond as a centre stone in jewellery.
A 2016 report by Morgan Stanley titled Game of Stones – Lab vs Pipe, made it very clear that the cost of developing and producing lab-grown diamonds was basically the same as opening and producing from a new diamond mine. And, the report also highlighted the deep investments in technical process development required to produce good quality lab-grown diamond.
Assuming Morgan Stanley’s manufacturing cost basis calculations, coupled with the increasing consumer demand for lab-grown diamonds, it is unlikely that there would be a downward price shift for grown diamonds, specifically for the high quality lab-grown diamonds typically chosen for centre stones (1-carat and up). The key to success within the lab-grown market has been the 1.0–3-carat, good quality stones for the bridal market. And we feel that this is where the lab-grown sector will continue to see positive growth. The IGDA believe that lab-grown diamonds present an excellent growth opportunity for retailers to build a business today and for tomorrow!
Not only is a lab-grown diamond 100 per cent genuine diamond, and has the exact characteristics of a diamond it is also graded to the same standards as mined diamonds. Very clearly, consumers accept this too!
So we believe that when a consumer wants to compare lab-grown and mined diamonds to celebrate or mark an important milestone in their life, they will request an independently certified, lab-grown stone to be fully aware of what they’re buying.
In conclusion, our entire industry of lab-grown diamond producers and supply chain partners anticipate and look forward to a very promising future.
SOURCE: Jeweller Mag