A Crisis Of Value And Values - And What Marketers Can Learn From What's Happening in the Diamond Industry

I've always been drawn to diamonds. There's something about the way they catch light, the weight of history they carry, the stories they tell. I bought completely into the sentiment, the romance, the idea that these stones somehow captured forever. But watching what's happening to the diamond industry right now has even got me questioning whether lab-grown alternatives might be the smarter choice. Though I'm not entirely convinced yet. They may be cheaper, but they're still expensive for what amounts to an artificially created product, aren't they?

Here's why this matters, and why the diamond industry's current crisis affects far more than just sparkly things: The diamond industry is going through what can only be described as a perfect storm. After decades of carefully crafted mystique around "forever" stones, the sector finds itself facing challenges that seemed unthinkable just a few years ago. The numbers are brutal: De Beers, the world's largest diamond producer, has watched revenues drop by 44% and now sits on $2 billion worth of unsold inventory (Jamasmie, 2025). Russia's Alrosa has seen profits plummet by 77%, whilst companies across the value chain are shuttering operations or laying off thousands. This isn't your typical market downturn. The diamond industry is dealing with a fundamental shift in how people think about luxury, ethics, and value. At the centre of this upheaval sits a fascinating contradiction: lab-grown diamonds are simultaneously more ethical, more sustainable, and significantly cheaper than their natural counterparts. In a world where going green and prioritising ethics usually means paying more, this role reversal has caught the traditional industry completely off guard.

When Synthetic Becomes Superior. Lab-grown diamonds have become the industry's biggest disruptor. These synthetic stones are physically and chemically identical to natural diamonds, yet they sell at discounts of up to 80% compared to mined alternatives. The transformation has been swift and dramatic. Back in 2018, lab-grown diamonds commanded only a 20% discount. Today's price difference represents something much more significant than market fluctuation. Generation Z consumers are leading this charge, and their enthusiasm is reshaping everything. This demographic spends more on luxury goods than previous generations, with 58% making fashion purchases three times in the past year compared to 41% of baby boomers globally. More tellingly, 46% of engagement stones purchased in 2023 were synthetic diamonds, up from just 12% in 2019 (Bijlani, 2024). What makes this trend particularly intriguing is how it flips conventional wisdom about sustainable products. Usually, environmentally conscious alternatives come with premium price tags. Think organic food, electric cars, renewable energy. Yet lab-grown diamonds offer both ethical credentials and significant cost savings. It's a double win that traditional marketers probably never saw coming.

The Messy Reality of "Ethical" Diamonds. The environmental case for lab-grown diamonds isn't quite as clear-cut as it first appears. These stones need substantial energy to produce, roughly 250 kilowatt-hours per rough carat. Most are manufactured in China and India, countries heavily reliant on coal-powered electricity grids. So the sustainability argument gets complicated quickly. But perception trumps technical reality in consumer markets. Young buyers increasingly see lab-grown diamonds as the more responsible choice, particularly given growing awareness of mining's social and environmental costs. This shift in perception poses a massive challenge for the natural diamond industry, which has always relied more on emotional storytelling than technical specifications.

Decades of Marketing Coming Undone. The current crisis has roots stretching back decades. De Beers' legendary "Diamonds are Forever" campaign, launched in the 1940s, successfully manufactured demand for what is essentially a luxury good with limited practical use. For generations, this marketing created powerful associations between diamonds and love, commitment, and status. As De Beers' dominance weakened over the past 25 years, the industry lost its unified voice. Global marketing spend on natural diamonds has dropped to less than 20% of historical levels, leaving a massive gap in consumer awareness precisely when competition from alternatives has intensified (Bijlani, 2024). The industry now faces a tricky challenge: how to rebuild demand for natural diamonds without accidentally promoting their synthetic competitors. Recent efforts include partnerships between major producers and retailers to train sales staff about natural stones' unique qualities, echoing the promotional strategies that worked so well in the mid-20th century.

Lessons for Marketers Everywhere. This upheaval represents a textbook case of changing values completely reshaping an industry. The diamond sector has always positioned itself around scarcity, heritage, symbolism. But consumer expectations have shifted, and the market is scrambling to catch up. Newer brands are telling completely different stories. Companies now lead with messages about ethics, sustainability, individuality rather than tradition and exclusivity. These messages connect with buyers who want more than sparkle. They want their purchases to align with their principles. The lesson extends far beyond diamonds. When customer values shift, brand narratives must evolve quickly or risk irrelevance. The most effective marketing starts with listening, and the diamond industry's struggles show what happens when companies fail to hear what their customers are actually saying. Lab-grown diamonds aren't being positioned as compromises. They represent a new kind of luxury, built around choice, responsibility, beauty. They challenge the assumption that ethical products must cost more, creating what you might call a 'values bonus' rather than the usual 'values premium' for conscious consumers.

What Happens Next. The diamond industry's response will determine whether it survives this crisis. Some companies are hedging their bets, exploring lab-grown production alongside traditional operations. Others are doubling down on exclusivity and rarity, positioning natural stones like vintage wines or classic cars. Technology entrepreneur Leanne Kemp argues the industry isn't just experiencing a downturn but actively "disassembling" (Jamasmie, 2025). Industry analyst Paul Zimnisky takes a more measured view, suggesting that whilst this period has been painful, easing pressures could return the sector to growth. For consumers, the implications are increasingly clear. Shoppers face different questions now when choosing diamonds. Do you want a stone with historical weight, or one with a smaller environmental footprint? Do you see diamonds as investments or personal statements? Lab-grown diamonds offer bigger stones for the same money and better traceability, though their resale value remains uncertain as that market develops. The resolution will likely depend on the industry's ability to craft new stories that resonate with contemporary values while maintaining emotional appeal. For an industry built on promising forever, adaptation has never been more urgent.

As someone who's always been captivated by diamonds' allure, I find myself caught between sentiment and pragmatism. The romantic in me still gravitates towards natural stones and their ancient journey to my finger. But the realist wonders whether paying premium prices for that geological lottery makes sense when the alternative looks identical and costs substantially less. Though something still nags at me about spending hundreds or thousands on a laboratory creation, regardless of how much I might save compared to the "real" thing. The diamond industry's perfect storm reveals broader questions about how traditional luxury adapts to changing consumer values. In a world where younger buyers prioritise both ethics and value, the challenge isn't just marketing diamonds differently. It's fundamentally reimagining what luxury means in the 21st century.

References

Bijlani, S. (2024). The Future of the Diamond Industry: Navigating Challenges and Opportunities. Bharat Diamond Bourse Leadership Series.

Jamasmie, C. (2025, May 28). Diamond mining industry cracks under pressure. Mining.com.