January 2021 | Lab Grown Magazine

January 2021 | The Lab Grown Diamond Resource Book 14 To advertise call (888) 832-1109 | January 2021 15 I t’s easy to play Monday morning quarter- back. Passing judgement on what should have happened in the past months is as simple to state as it is worthless to say. That noted, there are two strong reasons to look back—to learn and to leverage the lessons learned. We are no longer on a retail related Co- vid-19 crash course, but don’t be too quick to jump on the success superhighway just yet. Having an overtly optimistic outlook is as fail-safe as Lucy pulling the football from Charlie Brown. Being positive leads to productivity, of course, but only with a proven plan.And that plan must focus on consumers. Vaccination programs and government-controlled relief packages are solid steps towards a Covid comeback, but a stadium event is lackluster without crowds filling the seats. Let’s play to win and focus on how you can fill your stadium in 2021. Turn Hope to Happen To borrow from Greek mythology, Zeus vowed vengeance by packing a jar (not a box) full of sickness, death, and turmoil to be un- leashed if Pandora opened it. As the myth goes, she eventually lifted the lid, releasing devastating world despair.The only thing that didn’t escape her jar of misery was “hope.” How do you define “hope?” Is it an an- ticipation of positivity? Or is it a deceptive expectation for those without a plan. Some historians translate the “hope” trapped in Pandora’s jar as a metaphor of imprisoned possibilities. Others theorize that “hope” was meant to escape since an empty self-promise is just as destructive as the demons housed in this ancient parable. Discarding hope may appear to be unnecessarily negative or a quick means to a demise, but let’s keep things in context. I’m reminded of the late Scott Kay who utterly despised hope. He regarded all things “hope” as a weak tool of the “hopeless.” Scott thought of hope as a whim of distraction occupying space that should be replaced with strategy. He promoted the same mindset whenever anyone wished him “good luck.” Those two words would instantly irritate him. Scott regarded “luck” for the “lesser than,” those who must lean on hope to win, rather than formulating and activating a calculated plan for success. The first time I heard this rationale, it seemed to join those who labeled Scott a pessimist—and an angry one at that. Working as Scott’s right hand, I stayed by his side for a decade as CMO, primarily since I, too, believe in actualization over ambi- tion, conversion over craving, and wages over wishes. While navigating the 2021 highway of uncharted sales territory, would you take the exit you hope is right or the one based on a road map? Destination: Success The global lab-grown diamond (LGD) market continues to climb. With advancing technologies, resource allocation, consumer awareness, and demand growing year-on- year, analysts predict a global market with revenue surpassing $23.8 billion. But analytical forecasts for man-made dia- monds must be compared to natural stones as well as the jewelry market overall, other- wise we’re back to hope in a jar. Let’s take a hard look at what was (pre and peak pandemic) and what mined diamonds and the worldwide jewelry market were dealing with in order to strat- egize for 2021 and beyond. Voice of Reason Paul Zimnisky, a highly regarded, independent dia- mond industry an- alyst and consultant, based in the New York City/metro area, had this to say: “While the pandemic brought about an unprecedented shock to the whole diamond value chain in 2020, in a way, it may also have acted as a catharsis of sorts for an industry that has been struggling to regain footing in recent years, in part due to a misalignment of supply and demand.” The end-consumer has been somewhat capricious in recent years, adopting colored gemstones for engagement ring centers, which we will address later in this article. On the white LGD supply side, increasing output is quite apparent, part- ly since rough prices hit an all- time high in 2011. “Over the longer term, end- consumer demand likely re- mains the most important fundamental factor leading to a prosperous diamond in- dustry, as strong demand ul- timately pulls excess supply though the supply chain,” says Zimnisky. “In the short- and even medium- term, an oversupplied market can greatly limit the ultimate health of industry, which we have seen in recent years.While the pan- demic has undoubtedly shaken an already fragile diamond industry vying for a recov- ery, it also seems to have accelerated a much- needed supply shedding that will help posi- tion the industry for a more sustained recov- ery and a return to a much healthier state in the years to come.” Volatility and Veracity It’s clear that the diamond industry has witnessed high volatility, especially over the past few years. 2019 ushered in short- term revenue chal- lenges impacting the upstream (min- ing) and midstream (distribution) rev- enues, which shrank by 25% and 10%, respectively, in that year. In early 2019, diamond mining delivered near record production (note that this mostly came from lower-quality mines), yet it faced lower than expected demand dur- ing the same period. The blame for a lower-than-forecast desire for diamonds went to the macroeconomic and geopolitical tensions across the world. The $80 billion forecast wasn’t realized and the top three largest jewelry markets (the USA, China, and India) were hit the hard- est.Declining consumer confidence based on labor market uncertainties, recession rumors, Lawrence Almna-Tadema’s watercolor painting of an ambivalent Pandora holding the jar of misfortune, circa 1881. (Image: Tadema library)