For almost two decades, Michelle Graff (no relation to the jeweller Laurence Graff) has watched the US jewellery business from one of its closest vantage points. As editor-in-chief of National Jeweler, the trade publication owned by Jewelers of America, she has seen lab-grown diamonds move from industry curiosity to mainstream engagement ring choice — and watched the natural-diamond industry struggle to decide how to respond.
Her view is that the upheaval is about much more than technology. Younger consumers grew up with less diamond advertising than previous generations and with much greater financial insecurity. Lab-grown diamonds arrived at exactly the right moment: visually indistinguishable to an ordinary observer, considerably cheaper and increasingly socially acceptable.
The result, Graff believes, is a diamond market beginning to split in two. At the top end, wealthy customers still want rare natural diamonds and one-of-a-kind jewellery. Further down the income scale, lab-grown is increasingly becoming the affordable option.
FM: You grew up in the era of “A diamond is forever”. How different is the environment for younger consumers today?
Michelle Graff: When my friends started getting engaged in their early 20s, you just got a diamond ring. There wasn’t really another choice. We grew up with “A diamond is forever”, with the “two months’ salary” advertising and those De Beers commercials. It was burned into our brains that when you got engaged, you got a diamond.
Then there was a gap in that big-scale marketing. So there is a whole generation younger than me that didn’t grow up with the same messaging.
At the same time, I think a lot of people in their 20s and 30s are struggling financially. My generation grew up in America assuming our lives were going to be bigger and better than our parents’. I’m not sure younger people feel that way.
So two things are happening at once: they haven’t had the same natural-diamond marketing, and they don’t have the same sense of financial security. Then you introduce lab-grown diamonds into that equation.
FM: Why is lab-grown such a compelling proposition for that consumer?
MG: Because it’s a diamond. People don’t like hearing this, but it has the same chemical properties. Nobody seeing you on the street can tell the difference.
You can get the big diamond you want, or simply spend much less and move on with your life. You can save money for a house or pay down loans. There are a lot of issues coming to a head at the same time.
FM: Is the market now bifurcating between natural and lab-grown diamonds?
MG: I think the bifurcation in diamonds is part of the bifurcation of the American consumer market in general.
You’ve heard the phrase “K-shaped economy”: the rich are getting richer, while people who are middle class or lower income are struggling. The jewellery market is going the same way.
People with a lot of money are buying natural diamonds, very expensive pieces and one-of-a-kind jewellery. People without that kind of money are either pulling out of the jewellery market altogether or going lab-grown.
I think you are going to have two separate diamond markets. Natural diamonds will be increasingly concentrated in very high-end goods, while lab-grown diamonds will become more like fashion jewellery.
FM: Do consumers now fully understand the distinction between lab-grown and natural?
MG: Some do, but I wouldn’t say everyone has “clocked the system”.
Consumers still come into jewellery stores with questions about natural and lab-grown diamonds. We live and breathe this industry every day, so everything seems obvious to us.
But imagine you’re 26, you work in advertising and you’re interested in sports. Why would you ever have researched diamonds before you decided to get engaged?
For many consumers, the first time they seriously investigate diamonds is when they’re actually ready to buy one.
That’s one reason the jeweller’s role as an expert is still important. There is more information available than ever, but consumers also need someone to help them sort through it.
FM: Do consumers understand how dramatically lab-grown diamond prices have fallen?
MG: I don’t know that it crosses their radar that much.
There’s an irony in the industry’s obsession with the idea that lab-grown diamonds don’t have resale value. When you buy a car, you expect that in five or 10 years you’ll sell it and buy another one.
But aren’t we selling somebody an engagement ring on the promise of forever? “A diamond is forever” was supposed to mean your love is forever.
If you’re buying an engagement ring, aren’t you hoping your marriage lasts forever?
People do upgrade diamonds, of course. But I don’t think the first thought of somebody getting engaged is what they’re going to do with the ring on their 20th anniversary. They’re probably just trying to make it to their 20th anniversary.
FM: Is there still a stigma attached to proposing with a lab-grown diamond?
MG: No, I don’t think so.
A lot more couples discuss the engagement ring together now. People live together before marriage, their finances may already be intertwined, some already have children.
In the past, the man often made the decision and maybe asked her sister or friends what she would like. Now it’s much more likely to be a joint decision.
They might say: “I want a natural diamond because of X, Y and Z,” or “I want a lab-grown because I want a bigger ring, but this is our budget.” Or they might simply say: “Let’s get something inexpensive and save for a house or pay off the student loans.”
So there is less stigma because women generally have a much better idea of what they’re getting.
FM: The natural-diamond industry says natural stones are beginning to recover. Is that actually happening?
MG: Natural sales are picking up, but where the industry is really hurting is in the smaller goods.
Look at the mines that have gone into receivership or bankruptcy, that have closed or are being sold. A lot of those mines produce predominantly smaller stones. That’s the part of the market that’s really hurting.
If there is a recovery, it’s at the top. Again, it mirrors the economy. The wealthy are doing very well. Middle- and lower-income consumers are struggling.
FM: Could the proliferation of huge lab-grown stones actually undermine the appeal of size itself?
MG: I don’t think it necessarily damages very large natural diamonds.
If somebody wealthy enough to afford a five-carat natural diamond is wearing one, people generally know what they have.
But it might make somebody buying lab-grown nervous about going too big. You might be able to afford a three-carat lab-grown stone but decide to stay at two carats because you don’t want it to be so large that everyone assumes it’s lab-grown.
Some people may not care at all. But I think that’s an interesting psychological limit on the “bigger is always better” argument.
FM: Taylor Swift’s engagement ring seemed to delight the natural-diamond industry. Why?
MG: There was a giant collective sigh of relief when she didn’t appear with a lab-grown diamond and give some speech about it being more ethical.
She obviously doesn’t need to save money, but it was still important symbolically.
And there’s another interesting aspect: her diamond has a warm tone. It’s not a colourless D, E or F stone.
That happened just as De Beers is pushing its “Desert Diamonds” programme — warmer yellow, light brown and brownish diamonds, the kinds of stones consumers were historically trained not to want. So her ring was a huge boon for that whole idea.
FM: Is the Desert Diamonds campaign working?
MG: It is De Beers’ first “Beacon” programme in something like 17 years — the first major category-marketing initiative in a very long time.
In the past there were things like the right-hand ring, encouraging women to buy jewellery for themselves, and the three-stone ring.
I haven’t spoken to enough retailers yet to say how many customers are actually walking in asking for “desert diamonds”. But they’ve had tremendous celebrity exposure. Bad Bunny wore a brown diamond shaped like a football at the Super Bowl, and we’ve seen brown diamonds on red carpets at the Golden Globes, Oscars and SAG Awards.
Whether that translates into mass retail sales is still difficult to say.
FM: Both the natural and lab-grown industries increasingly make ethical claims. Is that going to decide the competition?
MG: Lab-grown’s claim is generally that it’s more environmentally friendly. But growing diamonds takes a huge amount of power and water. It’s not a zero-impact process.
And on the other side, you have to ask what happens to jobs and communities in Africa when natural-diamond mines close. Look at Venetia in South Africa. Closing a mine like that affects hundreds or thousands of people.
So I don’t think it’s accurate for lab-grown producers simply to present their product as environmentally cost-free. Growing something in a factory still takes significant energy and water.
FM: Does lab-grown ultimately need the natural-diamond business to survive?
MG: For sure.
Lab-grown depends on the natural-diamond industry continuing to generate interest in diamonds generally.
That’s something that sometimes gets missed. Lab-grown diamonds didn’t create the cultural desire for a diamond engagement ring. They entered a market whose symbolism had already been created over generations.
So the future may not necessarily be one side destroying the other. They may have to find a way of coexisting.
FM: And if you were getting engaged tomorrow — natural or lab-grown?
MG: Natural.
The conversation has been edited and condensed for clarity.