This Valentine’s Day, lab-grown diamond jewellery brand Kimaï set up shop in Paris, offering a physical touchpoint and consultations for loved-up shoppers looking to buy engagement rings and other romantic gifts in The City of Love.

It’s the kind of marketing activation that co-founder and chief executive Jessica Warch thought she wouldn’t be planning for several years. “We never thought [consumer interest in our] engagement rings would happen that fast,” she said.

Lab-grown diamonds, which are manufactured rather than mined, hit the commercial market around a decade ago. Though chemically identical to natural diamonds, the stones faced an uphill battle to carve out space in a hostile market, with the mining and luxury jewellery sectors waging an active campaign to discredit lab-grown stones as inauthentic trinkets.

“In the early days, a lot of the retailers didn’t want to work with lab-grown diamonds,” said Warch. But that’s changed dramatically over the last few years, as tech improvements, competitive pricing and zeitgeisty positioning as a sustainable alternative to environmentally-and-ethically messy mined diamonds have helped boost appetite for synthetic stones.

Kimaï has had a small but successful partnership with Net-a-Porter since May last year. Vrai, another lab-grown diamond jewellery brand, has gone from having none to six major stockists in the last year, including Selfridges, Saks Fifth Avenue and Moda Operandi. It’s launching with Bergdorf Goodman at the end of this quarter.

Lab-grown diamonds accounted for 10 percent of all global diamond jewellery sales last year, up from just 2 percent in 2018, according to diamond analyst Paul Zimnisky. He expects the category to see double-digit annual growth for the rest of the decade.

In 2021, high-street jewellery brand Pandora announced it was going to ditch mined stones altogether in favour of lab-grown alternatives, a decision framed as part of a sustainability push. There are even signs that luxury players are warming to synthetic stones; last year, LVMH invested in Israeli lab-grown diamond producer Lusix, while watch brand Breitling plans to phase out mined stones altogether by the end of 2024.

The rapid rise of lab-grown stones raises questions about whether natural diamonds truly are forever, at least in terms of their market share. It is perhaps the most prominent example of disruption taking place throughout the industry, as new technology and growing interest in sustainability rewrite what is considered luxury in even the most traditional of markets. For the sector, it opens up both new opportunities and challenges.

The Innovation Boom

The technology to make diamonds in a lab has existed since the 1950s. But the process was expensive and unpredictable; suitable for creating industrial cutting tools, but not fine jewellery. Over the years, innovations helped bring down the amount of energy needed to grow a stone and improve control over the final product. The real breakthrough, however, came with machines that could grow larger stones and multiple diamonds at a time, suddenly making it commercial to produce gem-quality diamonds.

Initial uptake was gradual and marked by a heated fight over what constitutes a “real” diamond. But in 2018, the US Federal Trade Commission changed its guidelines so lab-grown stones could be included in its definition of diamonds. After that, mining giant De Beers — initially a fierce opponent — launched its own lab-grown diamond brand.

As supply increased, retail prices came down, resulting in a greater price differential between natural and lab-grown stones.

Nowadays, lab-grown stones can be up to 75 percent cheaper than natural diamonds, according to Zimnisky. For brands like Pandora, it’s a development that has helped democratise access to diamond jewellery.

“We are now aiming to make [diamonds] quite a meaningful part of our business,” said Mads Twomey-Madsen, Pandora’s senior vice president of global communications and sustainability. “We very much changed our whole approach.”

All The Glitz at Lower Impact

While innovation engineered lab-grown diamonds’ path to market and competitive pricing opened up new consumer opportunities, savvy marketing that leaned into growing interest in environmental and ethically responsible products gave synthetic stones an edge.

Mined diamonds’ links to financing war and forced labour are well established in the cultural consciousness, largely due to the “blood diamond” scandal of the 1990s that linked the sale of sparkly gems to bloody conflicts. Meanwhile, the process of mining diamonds, which involves extracting stones formed deep below the earth’s surface, carries a hefty environmental footprint. More recently, the war in Ukraine has added to the ethical complexity involved in buying diamonds, with nearly a third of the world’s supply wiped out by sanctions against Russia.

Lab-grown diamond producers and jewellery brands have leaned into the sustainability narrative, promoting transparent and simplified supply chains free from the baggage of human rights and environmental concerns.

“A lot of customers liked the idea that [lab-grown stones] didn’t come from digging up the earth and disturbing the land, ... that it was actually done in a controlled setting,” said Lorraine Brantner, sales manager at online jewellery retailer JamesAllen.com, which began selling lab-grown diamonds in 2019.

Lab-grown jewellery brands also seized on the e-commerce and direct-to-consumer boom, allowing them to disrupt the very traditional, small world of diamond retail and enter the market on their own terms, control messaging about lower impact and better traceability, and test the waters for consumer appetite before major stockists came knocking.

“There were so many issues around blood diamonds and child labour, but on top [that], the way brands were communicating with their customer was unchanged compared to the way they were talking to our great-grandparents,” said Warch, who herself comes from a diamond trading family.

To be sure, lab-grown diamonds come with their own environmental issues: it takes a lot of energy to recreate the high temperatures and pressure in which diamonds form underground. Some companies, like Lusix and Vrai-owner Diamond Foundry, are looking to boost their eco-credentials by powering machinery with renewable energy, while New York-based Aether creates diamonds from carbon extracted from the atmosphere.

The Future of Lab-Grown

As lab-grown diamonds have gained ground with consumers, the luxury sector’s hostility towards them has thawed. Several industry stalwarts are now embracing the stones — albeit cautiously.

Some see an opportunity to leverage the tech to create otherwise impossible products, that don’t compete, but distinguish themselves from their mined counterparts. LVMH-owned Tag Heuer created an experimental 20-diamond watch face with Lusix that would have been astronomically expensive to produce with natural diamonds. Vrai, meanwhile, sells crosses and Star of David designs cut from a single rough diamond.

“Differentiation is a key game,” said Eyal Axelrod, vice president of sales and marketing at Lusix. “It’s a monetary thing; you can actually think differently about the product.”

Heritage jewellers are also increasingly open to lab-grown diamonds as an entry-level purchase for aspirational customers who might later graduate to bigger-ticket natural diamond jewellery, said Maiko Eaton-Kinjo, UK sales director at Ofer Mizrahi Diamonds, which launched lab-grown subsidiary Green Rocks in 2016. “It’s almost a diffusion line into the brand,” she said.

Industry watchers see even bigger opportunities to grow the overall size of the market, with lab-grown stones opening up a new, accessible niche as companies and producers scale up supply.

“I think there’s going to be less cannibalisation [of the natural diamond market] going forward,” said Zimnisky. “The natural diamond industry will maintain its place,” while lower-priced lab-grown gems “bring a whole brand new demographic of diamond consumers to the market.”

Lab-grown brands, meanwhile, are keen to push themselves upmarket too. Vrai is launching a cut-to-order service later this month, a bid to mimic the kind of bespoke offering usually reserved for high-end jewellery clients that could make the shopping experience, not just the provenance of the materials, a differentiating factor.

“Who are we to continue to say that luxury is natural diamonds?” said Eaton-Kinjo.

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