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Over the past 130 years, the De Beers Group has become the largest and most powerful diamond company in the world. It is responsible for excavating, selling, and trading most of the world’s mined diamonds, earning more than $6 billion annually.
Because of its historic and extensive involvement in mined diamonds, De Beers has been an aggressive opponent of synthetic diamonds, man-made stones that are grown in labs. This is, after all, the company that coined the marketing slogan “A Diamond Is Forever.” De Beers is also a major sponsor behind all those “Real Is Rare” commercials you might have seen on TV; the marketing campaign is paid for by the Diamond Producers Association, which De Beers is a part of. The “Real Is Rare” attitude holds strong to the decades-old agenda De Beers has dutifully stood by: that a lab-grown diamond is a product it would never sell to customers. Until now.
In a complete 180, De Beers announced on Tuesday that this September, it is launching a new brand, Lightbox, which will feature synthetic diamonds. In a press release, CEO Bruce Cleaver says that “while it will be a small business compared with our core diamond business, we think the Lightbox brand will resonate with consumers and provide a new, complementary commercial opportunity for De Beers Group.”
De Beers has technically been in the lab-growing business for 50 years. But that arm of the company, Element Six, up until now has been making synthetic diamonds used in industrial tools for the oil and gas sectors, and for research purposes. In 2015, the company told Bloomberg that it would never do anything that would “cannibalize” the industry (since an uncontrolled amount of diamonds would bring down the value of such a commodity). In 2016, when Racked wrote a longform story about the lab-grown diamond industry, a rep for De Beers said that the company sees synthetic diamonds as “costume jewelry.”
But the way De Beers is jumping into lab-grown diamonds now is extremely strategic. To the naked eye, synthetic stones are impossible to tell apart from mined ones; special technology is needed to make that distinction. The formula also creates Type IIa diamonds — rare stones that only make up about 2 percent of the diamonds that come from mines. As a result, lab-grown diamond companies have typically been able to price synthetic stones at a premium. While a 1-carat mined diamond can cost several thousand dollars (Blue Nile lists 1-carat stones starting at $3,500), synthetic diamonds are priced much lower; Brilliant Earth, for example, sells a 1.5-carat diamond for $1,500.
De Beers, on the other hand, is pricing 1-carat stones in jewelry at $800, while quarter-carat diamonds in accessories will cost $200. The intention here, clearly, is to upend the synthetic diamond industry by completely devaluing the current market.
“Our extensive research tells us this is how consumers regard lab-grown diamonds — as a fun, pretty product that shouldn’t cost that much — so we see an opportunity here that’s been missed by lab-grown diamond producers,” says Cleaver. “Lab-grown diamonds are a product of technology, and as we’ve seen with synthetic sapphires, rubies, and emeralds, as the technology advances, products become more affordable. After decades of R&D investment, we’re able to offer consumers a better price today.”
As Racked reported in 2015, the question of whether lab-grown diamonds will invade the market is now a matter of when, not if. An alternative to stones whose extraction methods are reportedly harmful to the environment is of interest to millennials, especially when they are a quarter of the cost, so it was really only a matter of time before De Beers got involved.
Synthetic diamonds are created by heating carbon to 5,000 degrees Fahrenheit and applying extreme pressure with a heavy hydraulic press — a method called HPHT. While a mined diamond is formed over the course of billions of years, advanced lab-growing technology can now create diamonds in as little as two weeks.
“You have two diamonds: One comes from a clean laboratory, where everything is done precisely, and the other involves a lot of digging into the earth and has workers in not the best environments,” Danny Baruch of the New York City-based American Grown Diamonds, whose tagline is “Saving the earth, one diamond at a time,” told Racked in 2016. “The lab-grown is the safer option. It’s eco-friendly, and there are no negative connotations in the background.”
“When I first started here,” Lisa Bissell, the former CEO of the lab-grown stone company Pure Grown Diamonds, added, “I wasn’t sure if consumers would respond, but after speaking to so many people, I’ve realized that everybody who sells mined diamonds will probably sell lab diamonds too. It’s just a matter of time. The diamonds are beautiful, and often the quality is finer than a lot of the diamonds fashion jewelry uses.”
Certainly, synthetic stones will earn De Beers plenty of profit; it will also be able to prove its strength against competing lab-grown diamond companies that have caught the attention of customers (like Diamond Foundry, the Silicon Valley lab-grown startup that has investment from Leonardo DiCaprio). But De Beers also announced it’s pumping $94 million into a new production facility of synthetic stones in Portland, Oregon, which will be able to produce half a million rough diamonds a year. Essentially, it’s looking to flood the lab-grown diamond market, essentially sticking to the message it’s been promoting aggressively for a while now: Real is rare, especially if De Beers has something to do with it.