Can lab grown diamonds sparkle all the way?

A natural diamond is the only diamond, but the silent synthetic revolution cannot be brushed under the carpet observes Vijetha Rangabashyam. The curious case of CVD (chemical vapour deposition) more commonly known as ‘lab-grown’ diamonds still remains curious. Their composition may be born out of pure science and may be clear-cut (no pun intended!) to understand, but their viability in the market still seems to be somewhat murky.

Much has been discussed about lab grown diamonds and as much as the natural diamond manufacturers like to deny it, lab-grown diamonds’ increasing popularity has been a cause for concern. And the infiltration of lab-grown diamonds in the pipeline of natural diamonds hasn’t really helped. Something as pure as diamond, is a thing of rarity and has to have come from beneath the earth after being there for eons, and the very idea of simulating it in a laboratory is nothing short of blasphemy, the natural diamond manufacturers opine. But in reality, these synthetic diamonds, initially created for industrial purposes cost 40 per cent lesser than the natural ones.

Lab-grown diamond companies on the rise
Asia Pacific remains to be the largest market for synthetic diamonds “due to increase in end-use applications in the region” and accounted for more than 50% of the global synthetic diamond market in 2014 reports Transparency Market Research. The increase in demand has given rise to many a laboratory which are indeed doing path breaking work in manmade diamond that is so difficult to differentiate from the natural ones. The only technology that can tell the difference between a grown diamond and natural is Spectroscopy, where X-ray is used to identify nitrogen defects in synthetics. One such start up synthetic diamond laboratory is the LA-based Diamond Foundry founded by Martin Roscheisen which has garnered about $100 million in funding and is backed by the likes of Leonardo DiCaprio, Facebook co-founder Andrew McCollum and Twitter co-founder Evan Williams. “The fact that a mined diamond has been buried in the soil for a billion years is a random fact. Why not 2 billion or one tenth of a billion of years? It’s all the same. Atoms in the universe are all the same age. So our diamonds’ atoms are as old as the universe we could say,” says Roscheisen. Manmade diamonds might account for a mere 1 per cent of this glamorous $14 billion industry but companies like Diamond Foundry are certainly on the rise.

How low can the price go?
The synthetic market of other precious gems like rubies and emeralds is thriving and today it is way bigger than its natural counterpart, but can the same be true for diamonds? “I have read search reports from Morgan Stanley and Merrill- Lynch indicate earth diamond sales amongst millennials are down and lab-grown diamond sales are up. According to some of our clients, the fact that a woman can gift herself with a laboratory pink diamond, which is very rare in nature and unaffordable to most people, would corroborate the growing trend toward labgrown diamonds in the way lab-grown rubies and emeralds are gaining popularity,” says Bryan Glazer, President, World Satellite Television News & Media Relations. He is the architect of the launch of Pure Grown Diamonds and the launch of MiaDonna Grown-inthe- USA laboratory diamonds. It was not until 2013 that the world’s largest (1.29 ct), a Type IIa, whitest E color, VVS2, emerald-cut diamond was produced by Pure Grown Diamonds (Gemesis). Even with this technological advancement, the lab-grown diamond manufacturers are in no position to sell these diamonds at the same price at which a synthetic emerald or ruby could be sold. “Producing diamonds is a lot more expensive than producing emeralds or rubies. So diamonds will always be a lot more expensive,” argues Roscheisen. So, even with the competitive p

Lab-grown diamonds are no easy feat!
To those who are under the impression that manmade diamonds are simple, creating diamonds in the lab of such high quality, perfect colour and clarity is no easy feat. It is not as simple as procuring synthetic crystals in the market or purchasing the necessary equipment. The process needs precision with several scientists being involved at the same time and the amount of time and research that goes into creating such diamonds is enormous, not to mention the operational costs. A machine used to create such diamonds costs something like half a million dollars. The stone may not have soiled in the earth for millions of years but the process of creating diamonds in the lab is still very complex. The idea of mimicking earth’s natural growing environment in a laboratory by itself is extremely complicated and needs serious man hours.

Let’s talk marketing
The game-changer in all this would actually be how effectively the lab diamond industry uses marketing to push their product to their target audience. The demand for natural diamonds is not going to die, the emotional bond that people share with diamonds is stronger than the many bonds that actually make a diamond. But creating a demand for a new category that claims to be optically, chemically and atomically similar to a mined diamond is a massive challenge. “For the most-part, the half dozen lab-diamond growers and the hundreds of retailers are doing very little advertising. A few are relying on news coverage to promote the product. Some of it is strategically orchestrated and some of it is occurring by happenstance,”emphasizes Glazer. But Chaim Evan Zohar from Diamond Intelligence has a different view. In the Mines to Market conference that took place in Mumbai recently, he urged the industry to look up to the marketing strategies used by the likes of Swarovski because they are clever. “If you look at some of the advertising videos the synthetic diamond producers are making, if we were to play that here, everyone would walk out to buy synthetics,” he cautioned the audience.

Who are really buying these diamonds?
But who is exactly buying these lab diamonds? Right now, the millenials of course. They are also relatively environmentally and ethically conscious and affordability is a huge factor. “While there is a certain romance and mystery and rarity associated with earth-mined diamonds, public perception amongst millennials appears to be very different than their parents’ generation. Millennials appear to be more concerned about the origin of their diamonds, the environmental impact of diamond-mining, the history of worker’s rights violations and the cost of earth diamonds,” says Glazer. But no one is addressing the brand conscious older millenials who have hefty disposable incomes, who still like their luxury product to be one of a kind. A majority of them are entering their peak earning years and have the income for luxury. Is the grown diamond industry even concerned about targeting this crop of millenials or is it purely riding high on the cost factor? We don’t really know. “We’re here to create change, however, we’re not about forcing people into making decisions their not comfortable with. We’re providing consumers an alternative choice, and by highlighting the benefits of our technology we’re empowering consumers to make an educated choice that best suits their lifestyle and budget. Lab-grown diamonds are not for everyone, just as mined-diamonds are not for everyone. We want customers to have a choice,” says Andrew Puddifoot, General Manager, MiaDonna & Co.

The road ahead
The truth is, globally, the economy is going through a phase of turmoil and the luxury goods market is facing the brunt of this crisis and diamonds aren’t getting any special treatment. Moreover, the excessive production of diamonds as witnessed in the past few years has added fuel to the fire. In a report furbished by Morgan Stanley, diamonds feature way below iron ore, steel, coal and aluminum in the list of most preferred commodities. All this has given rise to a general apathy amongst the buyers in the industry and in turn has opened a substantial window of opportunity for the synthetic diamond market. Frost & Sullivan, in a report claims that the demand for lab diamonds will touch 20 million carats by 2026. “The question is not IF created diamonds resonate with consumers, rather HOW they do. There is consumer demand for created diamonds, today. Consumer research indicates this and the fact that leading retailers offer the material does, as well. The real challenge is positioning created diamonds as a material in its own right and in a long-lasting way that is complementary to mined diamonds,” says Cohen. Can this utopian view become a reality? Can the two industries coexist peacefully without one dissuading the other? Only time will tell. While the purchase of a diamond at large is still sentimental and needs to be one of a kind for the consumer, buying a conflict diamond is harder on the conscience today than it was a few years ago. And for those who can’t afford natural diamonds, price trumps provenance any day. Saying that “synthetic diamond market” is the only future may be hyperbolic, but to say that it doesn’t have any future at all is also incorrect.