De Beers' Quest: Positioning Natural Diamonds as the Epitome of Authenticity

In a bold move to revive its heritage, De Beers announced it will cease producing lab-grown diamonds for jewelry, focusing instead on natural stones. This decision follows a tough year of declining sales and strategic uncertainties, as parent company Anglo American considers divestiture options.

A Strategic Shift

In 2018, De Beers launched Lightbox, a brand for lab-grown diamonds. Now, six years later, the company announced at the JCK jewelry trade show that it will stop new lab-grown diamond production for jewelry. Lightbox will continue using existing inventories, with future production shifting to industrial applications.

De Beers' CEO, Al Cook, introduced the “Origins” strategy to promote mined diamonds by highlighting their unique stories and attributes. “We need to better tell the story of where the natural diamond comes from; why it’s so special,” Cook said.

However, the announcement met with mixed reactions. Some audience members pointed out that De Beers played a significant role in legitimizing lab-grown diamonds when they launched Lightbox. "They created this mess," one attendee remarked. "Years ago, when they burst onto the scene with Lightbox and lab-grown, De Beers legitimized and signaled the market. They f*cked it up themselves". Others merely shrugged their shoulders in acceptance.

New Partnerships and Technology

To support this strategy, De Beers is partnering with major jewelry retailers like Chow Tai Fook and Signet Jewelers. A new campaign highlighting the unique qualities of mined diamonds will launch in Q3.
The collaboration but will involve "educating consumers - 'zillenials' - on the extraordinary attributes of natural diamonds."

De Beers also unveiled a diamond verification tool to distinguish between mined and lab-grown diamonds and plans to use blockchain technology to trace diamond origins, enhancing transparency.
As part of “Origins,” De Beers aims to cut $100 million in costs through restructuring and divestitures. Cook emphasized the authenticity of natural diamonds, created over a billion years ago. “A natural diamond is by definition, the epitome of authenticity,” he said.

Market Context and Challenges

Historically, De Beers dominated the diamond market with campaigns like the 1947 “A Diamond Is Forever.” However, legal challenges in the early 2000s reduced its control, and the Natural Diamond Council now promotes the virtues of natural diamonds.

Despite this, De Beers faces competition from lab-grown diamonds, which accounted for 17 percent of the market in 2023. Prices for lab-grown stones have dropped significantly, making this an opportune moment for natural diamonds to reclaim market share.

Looking Ahead

After a difficult 2023, De Beers is working to stabilize prices by scaling back production. The stakes are high, as Anglo American considers divesting De Beers, a move complicated by a failed takeover bid by BHP.

De Beers aims to reposition natural diamonds without eliminating lab-grown options. As luxury brands embrace lab-grown diamonds, Cook insists natural diamonds will remain the choice for life’s most significant moments. “One is a precious rare stone for important moments; the other costs less than the dinner celebrating your engagement,” he said.

With a renewed focus on authenticity and heritage, De Beers is set on redefining its legacy in the diamond industry.
 

photo credit: De Beers Group