Let’s Talk Synthetics—Or Not

One subject has dominated every diamond industry gathering for the last few years: synthetic diamonds. Or is it cultured diamonds or man-made diamonds or just plain diamonds?

The question pivots on who is speaking. Most of the diamond industry, especially diamond producers and their main clients, want the issue to go away. Fat chance. Retailers are divided, from “Bring it on” to “I’ll never touch it.” Jewelry companies are equally divided.

This reflects a failure to look an issue straight on and accept facts. Let’s state a few.

Man-made diamonds—call them what you will, but I’ll call them MMDs—are here to stay. Diamond people have a fear, legitimate or otherwise, that the loss of diamond mystique will hurt the business. On the other hand, we see these goods sold every day without a problem. So the question may come down to whether one is in business to make money or protect mystique.

Wouldn’t it make sense for everyone to accept a future with MMDs and figure out how to make that future work? We know it will be a long time—if ever—before mined diamonds are essentially replaced by MMDs. The public holds huge stocks all over the world, and those stones will not simply be thrown away. They may in time represent the “mines” of the future as worldwide demand continues to grow and new mines become harder to find.

So MMDs could be important in maintaining the business, never mind hurting it. The diamond mystique is a bulwark of the business, but more people will find diamond prices out of reach. The public can be divided into thirds: One-third want to buy the mystique, one-third will be happy to find diamonds (MMDs) at a price they can afford, and one-third may go either way depending on occasion and mood.

Anyone who thinks that trumpeting naturals will assure that the public will buy nothing else is dreaming. Making that an implicit part of a message delivered at the time a consumer is seeking to make a purchase is far more appropriate. Sure, everything should be disclosed, but value perception is utterly subjective and we cannot make that decision for the consumer.

Recently we saw two indicators of where it’s all going. Chinese manufacturers jumped onto the palladium bandwagon to hold down prices on finished products. So have some U.S. manufacturers. That’s a market-driven move necessitated by a loss of important white-metal price points. Platinum prices remain very high, and 18k white gold has suffered as gold prices have risen. The solid growth of moissanite has demonstrated the need, and MMDs will only do better. For that matter we see jewelry made with steel, titanium, wood, rubber, and plastic. The advent of 585 platinum is a reaction to market conditions. Looked at honestly, diamond companies should favor all those materials, since it frees consumer dollars for more diamond content in any piece.

Why would MMDs be any worse an answer to the same pricing issues? Didn’t the fashion industry do the same thing? Synthetic fibers (I mean truly synthetic) seem to be doing quite well. And in that industry, synthetic does not necessarily mean cheap.

The industry’s ambivalence is shown by GIA’s waffling on the issue of offering reports on MMDs. They decided the stones should be graded (in a way) and identified, and then held off in the face of industry pressure. This is mindless denial. GIA made a move in the right direction and should proceed with it.

The FTC probably reflects public sentiment—call it what you will, so long as you state that they are man made. Good enough for me.

I have seen MMDs sitting comfortably in a good store, right next to naturals. The jeweler had no problem explaining what they are, or selling them. In a way, the stones showed a glimpse of the future. They were set with naturals as accent stones.

We’re in a state of transition where a relatively new and disruptive technology is shaking our foundations. We fear the devil we don’t know, even though he’s coming straight at us. The devil we do know has not been promising us much lately. Ben Janowski has spent more than 34 years in the diamond and jewelry industry. For the last 14 years he has been a business consultant focusing on strategic planning for the U.S. market.

benjanow@gmail.com