At the recent Dubai Diamond Conference panel on lab-grown diamonds, William Shor, managing partner of Caspian VC, one of the companies backing Diamond Foundry, made a startling suggestion.
“My colleagues would welcome the opportunity to co-market with [natural] diamond producers,” he said.
On one level, Shor’s suggestion makes no sense. His colleague, Diamond Foundry chief executive officer Martin Roscheisen, just wrote a magazine piece that accuses diamond miners of “price collusion.” (He provides no real evidence for this claim.) Doesn’t look like he’s ready for co-marketing.
On another level, Shor’s suggestion makes all the sense in the world. Why can’t the two sectors work together? Neither sector is going away. They both have money. They both need customers. A large number of companies currently sell both, including, of course, De Beers.
The fact is, the two sectors are intimately connected: on a retail level, on a distribution level, and on a consumer-perception level. They use the same cutters, the same vendors, the same retailers, the same manufacturers. When any part of that chain is hurt, that trickles down to the rest. Many lab-grown diamond sellers even use natural side stones.
They are also connected as far as pricing. Most lab-grown diamonds are sold based on their discount off the Rapaport price for natural diamonds. (Those are the same prices, by the way, decried by Roscheisen.) When natural diamond prices fall, so do lab-grown prices.
What brings this up is the Diamond Producers Association’s recent spots produced by Funny or Die, which takes several shots at lab-growns, calling them “microwave diamonds” and “factory diamonds.”
The day before I wrote the piece on that, I watched a Netflix special called Diamonds, Explained, where Jason Payne, head of Ada Diamonds, called natural diamonds “dirt diamonds.”
Does this kind of childish name-calling really help anyone? As the Vox-produced show points out, without the traditional diamond market, there would be no lab-grown industry. The reason people want to buy any diamond engagement ring is because of the brand equity that the natural industry has built up over decades. If that is destroyed, all sectors are destroyed.
We see this also with the eco-claims. This week, Ryan Bonifacino, the chief marketing officer of Clean Origin and Great Heights, called lab-grown diamonds “environmentally conscious”—even though the Federal Trade Commission has explicitly warned lab-grown companies not to use general environmental benefit terms such as eco-friendly and sustainable.
