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A Global Discussion
In our last issue, Lab Grown Magazine showcased
the first of a three-part series entitled
The Great Diamond Debate, in which author
Dan Scott took a hard look at the relationship
between mined diamonds and their labgrown
counterparts as well as the communication
coming from, and surrounding, these
two sectors.
The response from readers was immediate,
and not altogether unexpected, given the
tense situation pitting LGDs against mined
diamonds. People from around the country
(and even around the world) weighed in with
their comments. Most agreed with the basic
premise that a global discussion leading to
cooperation between the two groups is not
only important but vital to the health and
well-being of both industries.
In this issue, Scott offers the second part of
this important discussion and, in light of the
many responses globally, he has renamed it
The Global Diamond Forum.
And, in case you have not yet read Part One,
you can view our September issue online at
www.labgrownmagazine.com. In that issue,
Scott offers two cautionary tales from other
materials (metals, this time) within the jewelry
industry that should give stakeholders in
both the mined and LGD sectors a great deal
of pause.
Our second feature article in this issue talks
about innovative opportunities in the labgrown
sector, which you won’t want to miss.
As far as interesting news in lab-growns,
the International Gemological Institute (IGI)
stated that it recently graded a 10.06-carat,
fancy vivid-pink LGD, which had been graded
by IGI earlier as a fancy intense yellow.
The lab determined that the stone’s color
been changed by a dual-treatment process
of irradiation and annealing, which involved
heating the LGD to a certain temperature,
followed by a slow and controlled rate of cooling.
The IGI found that the color had basically
changed to pink while its saturation changed
from vivid to intense.
Until next time, stay safe.
Zev
The Global Diamond Forum
The overdue collective conversation on
man-made and mined diamonds continues.
Part Two of a Three-Part Series
By Dan Scott
Actionable Words
In Part One of this three-part series,
the title was The Great Diamond Debate.
Since the initial release, I’ve received calls questioning
the wording of the former title. Some
were confused with the previous headline
suggesting that I was forcing “fighting words”
to incite “dueling diamonds.” My intent then,
as it firmly remains now, focuses on assisting
a non-bias, necessary unity between LGDs
and their natural counterparts.
Since I’m constantly conversing with global
diamond producers, labs, jewelry designers,
industry organizations and salespeople,
I have the opportunity to interview a range
of leading professionals. While some discussions
remain off-the-record, many make it to
print. Yet, these man-made and mined diamond
executives all agree on one thing: the
importance of clear, consistent communication.
Thus, in the spirit of good communication,
this article, as well as the third part that
follows in the next issue, offers a more unified
series title: The Global Diamond Forum.
Regardless of the wording, there is a need
for talk. Together, we can assemble the ultimate
industry roundtable and the most powerful
force the jewelry, accessories and fashion
world has ever seen. Think about the united
global intensity and potency of the most celebrated,
but presently disconnected, diamond
sides. And then, connect them. Unstoppable.
Communication Crisis
As we continue to close the Covid-19 crisis,
no matter how much marketing is topof-
mind, we are in a diamond communication
catastrophe. Luckily, the vaccine for this
industry-created communications gap is as
simple as refined and defined discussions—
talks that focus on specific hard-hitting open
issues and how to solve them. We’ve tried it
alone and it’s ugly. Together, we offer magnifi-
cent, highly desirable eye candy supported by
a never-give-up attitude.
Imagine a town hall style environment
where the leaders from the natural diamond
sector sit down with the leaders of lab-grown.
Each side comes with an agenda approved in
advance. Each agrees to monitored response
time and the entire industry is invited to attend
live. Audience questions would be selected
in advance with respect to the speakers.
An expertly hosted and monitored live chat
would provide peer-to-peer instant integration.
Where could such a global diamond
event take place? Online.
Promoted months in advance, this conversational,
anti-debate stage is the ideal posturing
to keep diamond communications on track.
Moving readers to watchers and watchers to
participants, this live VOD business-to-business
“webinar” is currently being discussed.
The Opposite of Love
“A worldwide online meeting of the minds;
it will never happen,” exclaimed an executive
who didn’t want to be named, “but if it does,
we’ll be the lead sponsor.” We moved from
“never” to “title sponsorship” in one sentence.
It will happen. It must happen. If it doesn’t,
how much longer can natural and LG pretend
to be in love? There are serious bones of
contention. There are serious egos. There is
serious money at stake—money to make or
money to lose.
Let the hate fly. We’ll catch it, tame it and
then realize the opposite of love is not hate.
Hate is an emotion manifested from and
within love, desperately trying to solve complicated
interpersonal issues to regain and retain
love. The opposite of love is indifference.
Don’t stop caring, not even for a minute.
Home, James
The automotive industry got it right. They
have been in bed with petroleum miners and
refiners for decades and to the tune of trillions
of dollars. Trillions. Note the natural diamond
comparison… Cars need gas and oil, and we
want and “need” cars. Shiny great-looking
automobiles to see and be seen in.
Interruption. Suddenly, electric cars are the
must-own future of personal transportation.
It should be a blood bath right now between
Marathon Petroleum Corporation or Exxon
Mobil and the new name in town: Tesla. Only
seven years ago, Exxon was the largest company
in the world. Its market cap was about
$415 billion. Today it is half that, while Elon
Musk’s company has a market cap that surpasses
Exxon. Tesla’s share price has gained
3,200%. How are there not poison arrows
constantly grazing automotive headlines each
week? Have you read even one?
Here’s their secret… Oil and gas refiners
live harmoniously with electric cars, and not
because they “have to.” The oil and gas companies
know there won’t be a cosmic shift in
our lifetimes where every person is driving, or
being autonomously driven, in an electric car.
Some cars are hybrids. People drive both. The
key word is both.
Wall Street is seeing a new trend where opposites
are equal. Musk knew Tesla’s success
banked on much more than a “greener” ride.
Tesla’s fuel is the human need for advancement,
innovation and the magic of “new.” No
mudslinging, no rants, just fast global success.
Some may cite the call out of a “diamond
communication crisis” to be too dramatic. For
those, get ready to take center stage.
Two Simple Sentences
Try this basic diamond test for yourself.
What is the legal “industry definition” of an
LGD and that of a natural diamond? Two
different items (we’ll address “different” later
in the story) and two different simple, defining
sentences. One for lab-grown and one for
mined diamonds. Think you can you write
them? It should be easy, yet as an industry,
we’ve made it hard.
Now, ask a trusted industry pal to do the
same. Comparing the two, you’ll see they
won’t be the same. Similar doesn’t cut it and
using words like “identical” in the definition
raises an immediate red flag.
Now, imagine one hundred producers writing
the same definitions, or one hundred
thousand. If we can’t get two simple sentences
straight, how can we shepherd in a unified,
worldwide message? We need to talk and take
unified action. Once we do, both sides will be
able to see the white elephant in the room.
The biggest, most critical element of this entire
scenario is too often left invisible.
After diamonds shake hands with diamonds,
we need to hug the retailer and the
consumer. No cloudy communications, rather
in-demand transparency. This leads directly
into diamond grading, reporting and value—
perceived or actual—all featured in Part Three
of this series. You’ll read responses from GIA,
AGS, IGI, SGL and GCAL, all given the
same questions and you’ll read the answers.
You’re Invited
Getting back to the above-mentioned definitions,
you are invited to submit yours to
me at: dans@luxelicensing.com For privacy
reasons, I can’t share any portion of your response
or use your name or company unless I
have your direct consent. But I will share what
words are trending and provide the correct,
legal definitions for both types of diamonds.
I cannot say what’s right or wrong, although
a legal power player can, someone such as
Tiffany Stevens, CEO and general counsel
for the Jewelers Vigilance Committee (JVC).
In March of this year, Stevens didn’t touch
diamond definitions, but she did speak directly
to the permitted promotional wording
for LGDs as per the updated FTC Jewelry
Guidelines.
Full Disclosure
As for the terminology of LGD advertising
(and other forms of LGD public pronouncement),
Stevens stated, “[For] lab-grown, you’ll
want to use laboratory-grown, laboratorycreated,
or your manufacturer name–created.
With the new guidelines, as of July 2018,
there’s a new grab-bag kind of category that
contains words that might be okay. But as your
nerdy lawyer friends, we want to lower your
risk and discourage you from going there.”
Remember, this isn’t the legal definition
of an LGD, it’s the permitted promotional
wording that follows the law. And the FTC
is looking for those who don’t comply, which
may be a company in your supply chain.
If you’re doing business with an LGD company
that has a website, it may be hyping incorrect
wording or issuing incorrect or illegal
statements, so buyer beware. The need to heed
JVC’s helping hand is right now. “The FTC
did clarify that when people experimented
with words like above ground, those would not
be okay. They wanted to create room for free
speech, but we discourage people from going
there. And for SEO [search engine optimization]
purposes, if you want people to find
you, you probably want to use one of the three
approved terms,” Stevens added. If you dislike
reading legal documents, JVC has a dynamic
educational video where Stevens speaks to
this issue: facebook.com/TheDiamondFacts If
you like what you’re reading, please subscribe
and like the page; it’s where this diamond
conversation will continue virtually.
Carbon Copy
There are some among us who rightfully
hold the title of genius. They are the individuals
driven by massive doses of passion mixed
with just the right kind of intellect. This is
the kind of brain power that launches rockets,
creates humanoid robots and codes artificial
intelligence (AI) that will beat anyone at
chess, even that AI’s programmer.
From the 1940s to present day, America has
been on a beeline to brilliance. We proudly
stand tall amidst a bevy of major innovations
from the automobile to air flight. We’ve
invented satellites and cable broadcasting,
superseded by the internet and made them
pocket-sized. Humans were born to create.
But we do not create diamonds in a lab, we
copy them.
We’re so good at reproducing diamonds, we
make them perfectly. Actually, it’s the only way
LGDs can be made. One might say that we
copy diamonds better than the original. This
is because any LGD is 100% carbon, which
in the diamond world equals 100% perfection.
It’s one of the rare times the word “rare”
should be used by the natural diamond group.
Any mined diamond certified as Type IIa is
rarely found and is valuable. In the LGD sector,
it is exclusively Type IIa that is grown.
Confirmed by Geological Sciences and
GIA, Type IIa diamonds are the most valued
and purest type of diamonds. They contain
very little or no nitrogen atoms in the crystal
structure. Type IIa white stones are exceptionally
colorless and the fancy color ones tend to
have a brown, purple, blue or pink tone. Type
IIa represents a mere 2% to 5% of all mined
diamonds on the planet. Natural Type IIa diamonds
are so rare that they can command up
to a 15% premium. An example of this is the
Elizabeth Taylor Diamond, formerly known as
the Krupp Diamond, a 33.19-carat Type IIa
diamond.
No Two Are the Same
While the LGD group likes to promote
select phrases and quotes from today’s leading
natural diamond power players, one call
to any major lab will confirm that no two diamonds
are the same, mined or grown. That’s
very important and is a highly personal approach
to selling any diamond.
We should rethink using phrases such as
“lab-grown diamonds are identical to natural
diamonds.” They are not. If they were identical,
how would you tell them apart? Moreover,
Type IIa are quite rare on the natural side, but
they are routine business for growers.
Let’s compare Type IIa to Type Ia, which
accounts for the vast majority of graded
stones that nearly everyone owns. If the difference
is a “non-issue,” why did GIA publish
a report devoted to divulging the difference
in an article entitled “The ‘Type’ Classification
System of Diamonds and Its Importance in
Gemology” by Christopher M. Breeding and
James E. Shigley, published in Gems & Gemology,
Summer 2009.
While natural diamonds have embodied
the soft romance and deep emotional appeal
of earth extracted stones, lab-grown has an
equally compelling angle. A person can now
own a certified, perfect, virgin diamond. Let’s
repeat that: a person can own a certified, perfect,
Type IIa virgin diamond. Consumers
may now create their own legacy versus borrowing
from someone else’s unknown past.
It’s not one or the other. It’s both.
Science Lesson
Natural Type Ia diamonds make up the
majority of diamonds in the market. Type Ia
contains aggregated Nitrogen (N) impurities,
which include A-aggregates (IaA) that
consist of pairs of N atoms, and B-aggregates
(IaB) that are made of four N atoms around a
vacancy (V). This is according to the GIA and
retold with utter accuracy by any major lab.
But wait, haven’t we been told over and over
again that LGDs are optically and chemically
the same as their mined counterparts? For the
answer, look no further than the diamond’s
report or certificate itself.
The classification of diamond types is based
on the presence or absence of nitrogen and
boron (B) impurities and their configurations
in the gem’s lattice. The schematic diagram
included here illustrates the manner in which
N and B atoms replace carbon (C) atoms in
the diamond lattice. The diagrams are simplified
two-dimensional representations. Type
Ia diamonds contain aggregated N impurities—
including A-aggregates (IaA) and
B-aggregates (IaB). Type IIa stones contain
no measurable impurities, and Type IIb diamonds
have boron impurities.
Add to this, all CVD lab-grown diamonds
grow in one direction: up. Comparatively,
natural diamonds grow in multiple directions.
That means the lattice structure
is different. Light refraction is different.
One is pure carbon, the other isn’t. Shall
we try to define what a mined diamond
and a lab-grown diamond are again?
Walk the Walk
While Abraham Lincoln may have
taken credit for the famous slogan
“Actions speak louder than words,” the
original sentence was uttered long before
Lincoln was born. Coined by Saint
Anthony of Padua (1195-1230), the full
sentence was, “Actions speak louder than
words; let your words teach and your actions
speak.” We’d be better served—and serve
better—to borrow the last portion of that
quote rather than the first.
What we say is what we teach. It’s not just
your reputation or the hopeful avoidance of
legal hassles that are on the line; you are a
mouthpiece to a new, global diamond jewelry
industry credo. Now is not the time to mince
words. Now is the time for both sides to join
forces and speak as one.
We’ll continue to outline the many unanswered
questions entwined with significant
concerns stemming from multiple sides of the
diamond supply chain. Don’t shave off what
you don’t want to be swept up for industrial
use. We are the diamond jewelry industry. We
create opportunity. We create allure. We succeed
at selling symbolism and cater to human
emotion. Yet as smart as we like to think we
are, decades of proven opportunities lay dormant.
Let’s fix some of that right now.
Using words like “identical”
when comparing mined and
lab-grown diamonds raises
an immediate red flag.
Rough Cut
In the natural diamond space, buying rough
is as commonplace as a 1-carat, round, white
polished stone.
So, where is all the lab-grown rough? If you
look closely enough, you will find a handful,
but generally, you will be hard pressed to
find a lab-grown company focusing on rough.
Some are quick to blame certain countries for
forcing us to buy polished LGDs.
Sadly, those are the people that just won’t
make the cut. Is it acceptable that the business
mirror reflecting natural to man-made stones
fogs up whenever proven practices like buying
rough is spoken?
Bullet Proof
The diamond industry has overcome antitrust
legislation, threats from cubic zirconia,
moissanite, the film Blood Diamond, and generations
of changing consumer preferences
and cultures.
There is only one new large-scale mine
in development globally, and only one predevelopment
project that is likely to reach
production stage within the next ten years,
while close to twenty existing diamond mines
will be exhausted within the next decade. This
isn’t considering the “diving for diamonds”
endeavor, featuring the latest multi-billiondollar
diamond ship from De Beers, which is
set to suck up diamonds from the seabed.
In Part Three of The Global Diamond Forum,
we’ll take a deep dive of our own into the consumer
demand for accurate diamond tracing,
grading, reports, certificates and what modern
labs such as AGS, SGL and GCAL are doing
to ensure the security and transparency of the
diamond world, one stone at a time.
Dan Scott is a brand architect and founder of
Luxe Licensing, a New York Metro-based brand
and marketing agency catering to luxury and
demi-fine properties. Past and current clients
include Chanel, Gucci jewelry, JCKVirtual, St.
Laurent, Harry Winston and up-and-coming
brands. Dan welcomes conversation and may be
reached at +1.201.294.3697, dans@luxelicensing.
com or through www.LuxeLicensing.com ■
NOW is the Time to Start $elling
LAB-GROWN DIAMONDS
By Jerry Taylor
Last year at this time, as we geared up
for the holiday season, we could never
have expected what would meet us as an
industry starting early 2020. Coronavirus shut
many of us down in the first quarter of the year
and social distancing measures and government
mandates have changed the buying landscape
for end consumers in drastic ways.
Even now, as we prepare for the upcoming
holiday season, a certain level of unknown is ever-present
and many of us are looking for innovative
ways to revive our business and increase profit
margins and customer satisfaction.
If you’re a jeweler who has been on the fence
regarding lab grown diamonds, I have three
reasons why now is the perfect time for you to
start selling them.
Reason #1 – Many customers now have
smaller budgets.
Consumer spending is down and many
jewelers report that customers are spending
less than they did at this time last year. This
is understandable due to the economic chaos
and uncertainty that Covid-19 has caused. Yet,
customers who have smaller budgets still want
to get as big and as nice a diamond as they can.
Lab-grown diamonds accommodate this desire
very nicely.
Even if a customer doesn’t ask to see labgrown
diamonds (many still don’t know what
they are), you can show a bigger LGD next
to a mined diamond of the same price so they
can compare and decide what they prefer. Not
every customer will choose the larger lab-grown
diamond, but some will. Below, let’s look at why
that is advantageous to both the customer and
the jeweler.
Reason #2- Many customers are more
conscious of environmental issues and are
open to mine-free options when given a
choice.
The current pandemic has forced the world to
take pause and reflect on the biggest problems
facing humanity and our planet. Consumers,
especially Millennials, are interested in products
that have as little environmental impact as
possible. For that reason, many jewelers report
that customers respond very well to the idea of
buying a mine-free diamond.
Instead of selling moissanite or lab-created
sapphire to this type of customer, you can sell
a lab-grown diamond that yields much higher
revenue and profits.
Reason #3- Profit margins are higher
when selling lab-grown diamonds.
To say it’s been tough the last several months
is the understatement of the century. Online
competition is becoming more and more fierce;
brick-and-mortar competitors may be willing to
discount more just to keep inventory moving;
and on top of that, gold prices are higher than
they’ve been in many years.
Lab-grown diamonds present quite a unique
opportunity to increase profit margins. Many
jewelers report profit margin increases as high
as 50% when selling LGDs compared to mined
diamonds of the same price.
Many believe that offering LGDs will
decrease total revenue because customers
can spend less on lab-grown diamonds of the
same size and quality as the mined diamond
they’re considering. But this is the wrong way
to present lab-grown diamonds as an option to
your customer.
This is really important. When showing lab
grown diamonds as an option for your customers
to consider, keep their budget the same. If you’ve
been showing mined diamonds that are $5000,
show lab-grown diamonds that are also $5000.
Don’t show the same size LGD for less money.
It’s much more appealing to a customer to see
a larger, nicer diamond that is the same price
as the one they just looked at. Who wouldn’t
want that? Spend the time necessary to fully
disclose and educate your customer regarding
the origin differences between lab-grown and
mined diamonds.
When presented with this type of choice, your
bottom line will benefit when your customers
choose lab grown. And if they don’t, they’ll
appreciate that you gave them a choice and
spent the time to educate them.
If your customer chooses the lab-grown
diamond option, they’ll be ecstatic because
they now have a 1.73-carat diamond instead of
a 1.00-carat, and you just added an additional
$580 profit to your bottom line. Now imagine
doing that five times a month.
Over the course of one year, you will have
added $34,800 additional profit to your bottom
line. When you truly consider the numbers,
combined with the positive customer response,
it’s hard to make an argument against offering
LGDs as an option to your customers.
Below is the profit breakdown for the $5000
budget scenario discussed earlier.
Mined Diamond Option
1.00 Carat, I Color, VS2, Excellent Cut, GIA
$3492 total cost (listed on VDB)
$500 solitaire
$1000 markup added to the diamond
$4992 total sales price
Lab-Grown Diamond Option
1.73 Carat, H Color, VS1, Ideal Cut, IGI
$2912 total cost (listed on Lab Grown Source)
$500 solitaire
$1580 markup added to the diamond
$4992 total sales price
In summary, lab-grown diamonds present a
unique opportunity for jewelers who are looking
to rebound from the negative economic impact
of Covid-19. Get ahead of your competitors who
still aren’t offering this exciting new product and
enjoy the benefits of meeting this ever-growing
demand.
Jerry Taylor is CEO of Lab Grown Source and
COO of Taylor Custom Rings. Lab Grown
Source is a trading platform that gives jewelers
free access to all the major lab-grown diamond
suppliers’ inventory in one convenient place.
Taylor Custom Rings is a custom ring business
that focuses on selling lab-grown diamonds and
custom engagement rings. (labgrownsource.com,
taylorcustomrings.com)
