Blogs: Cutting Remarks / Diamonds / Industry

Pandora’s Bollocks: How a Charm Company Manipulated the Media


Just about everyone in the jewelry trade—as opposed to just about everyone in the consumer media—agrees that Pandora’s decision to stop carrying natural diamonds and launch a lab-grown line was no big deal.

After all, in 2018, only 0.04% of the gemstones—of any kind—Pandora used were natural. Last year, it sold 55,000 pieces with natural diamonds, out of 85 million jewelry items total. I can think of a dozen jewelers that could cause an earthquake if they decided to no longer sell natural diamonds. Pandora isn’t one of them.

So why did its announcement make headlines across the world?  Most likely, it was because of how the company framed the decision. “[M]ined diamonds will no longer be used in Pandora’s products,” its statement said—without mentioning it didn’t use many in the first place.

Instead, Pandora cast its decision as all about ethics. CEO Alexander Lacik told the BBC that selling $350 lab-grown diamond bracelets would leave the world in “better shape.” (If only it were that easy.)

Don’t get me wrong: Sustainability is extremely important. I believe Pandora’s concern about it is sincere. But just because you’re doing something to achieve a noble goal doesn’t mean that what you’re doing is right, or that it’s been thought through, or that there’s not considerable self-interest involved.

On “sustainable jewelry Twitter,” which consists of people who study and live and breathe this stuff, few were as impressed with Pandora as Pandora was with itself, as shown by this thread:

There’s also been industry blowback, as Pandora wasn’t exactly a beloved company to begin with. My old colleague Russell Shor called the announcement “disingenuous at best and destructive at worst.”  Probably the nicest words came from Idex, which called the announcement a “PR masterstroke.”

Yet one wonders how this brilliant PR coup went over at chains like Ben Bridge and Reeds, which own several Pandora franchise stores but also do considerable business in mined diamonds. (Both declined comment.)

One jeweler, Larry Sanders, owner of Sanders Diamond Jewelers, in Pasadena, Md., which has carried Pandora for 13 years but doesn’t sell lab-grown, says Pandora’s statement was “the last straw” and he’s now quitting the line.

“I just didn’t like the way they went about it,” he says. “I don’t know why they had to put [mined diamonds] down.… It’s become about what’s good for Pandora, but not about anyone else.” (He has also had other issues with the company.)

Last Friday, the Natural Diamond Council, which has generally tried to stay above the fray—but, like Al Pacino, keeps getting pulled back in—responded with a statement that was co-signed by several other diamond associations. (Pandora did not respond to a request for comment.)

Perhaps the most interesting signatory was the Responsible Jewellery Council (RJC), of which Pandora is a member. Pandora used RJC audits to back up its lab-grown sustainability claims, so it’s striking that RJC added its voice to a statement that dubbed the company’s rhetoric “misleading.” I’ve never seen the RJC publicly call out a member before.

As diamond-war statements go, the NDC’s was pretty restrained. (Perhaps we can thank the National Advertising Division for that.) It didn’t call lab-growns synthetics, didn’t imply they were fake, and didn’t talk about decreasing value. It simply objected to the ethical framing.

The industry employs tens of millions of people around the world and their families and communities depend on the income and welfare that the natural diamond industry provides. These communities need the support of the industry now more than ever given the hardship brought on by the COVID-19 pandemic. The misleading narrative created by the Pandora announcement implying the natural diamond industry is [less ethical]…can have unintended but substantial consequences on communities in developing nations.

While I agree with that statement, it also gave me a headache. Do we need to keep debating this, year after year?

Most sensible folks in this industry—a smaller group than one would hope—have recognized the hostilities are pointless and destructive to both sides. So many companies now sell both; it makes no sense for the sides to battle. If you don’t like natural or lab-grown diamonds, don’t sell them. It’s also silly to make overarching generalizations about large sprawling industries.

Yet, by stirring the pot, Pandora has shown there’s good PR to be gained. That could lead to copycats. Which I dread.

So does Lenore Fedow, who writes in National Jeweler: “I do not want to hear another word about lab-grown versus natural diamonds. Not another panel, webinar, think piece, or article. Minus this one, of course.” (And this one.)

Her piece was titled “We Need to Change the Way We Talk About Lab-Grown Diamonds,” but maybe the issue should be who talks about them.

Do the Natural and World Diamond Councils really think that the consumer media knows, or cares, who they are, or what they think? Nelson Mandela once called the diamond industry “vital to the South African and southern African economy” and warned that a negative portrayal of the diamond industry could “result in the destabilization of African diamond-producing countries, and ultimately their peoples.” Why weren’t his quotes used in that statement? As far as consumer credibility, 1,000 industry organizations don’t equal one Mandela.

While Madiba is no longer with us, the affected communities are still around, and since they’re the people the industry is purportedly protecting, it should let them talk. Those tens of millions of people aren’t props, they aren’t human shields, nor are they abstract victims of high-tech “disruption.” They are human beings. They should have a voice in this discussion.

Groups like the Kimberley Process Civil Society Coalition (KPCSC) might not always praise every aspect of the diamond industry, but they have made it clear, numerous times, they don’t want to see it destroyed. The same with the Diamond Development Initiative. Of course, the industry won’t like all that the activists and local residents have to say. NGOs can be critical, and demanding, and while some countries have benefited from diamonds, others have not. The NGOs are not on the industry’s team. But shouldn’t the industry be listening more to outsiders, instead of just talking to itself?

Most of the people the NGOs call out are legitimate bad actors. They shouldn’t be on our team. Some have hurt the trade far more than lab-grown diamonds. (Some even now sell them.)

Any PR strategy that tries to whitewash the industry’s problems is doomed to fail. The trade has plenty of good points, but sadly, we haven’t gotten rid of the bad.

That said, just about everyone who truly cares about and has studied these issues—and views them as problems to be solved rather than marketing hooks to be exploited—has consistently said that destroying the diamond trade would be disastrous. The Silicon Valley motto is “move fast and break things,” but I hope people there think long and hard before they break millions of people (more than they already have).

Which brings us back to Pandora. The company has spent the last week patting itself on the back, but in my view, it has little to be proud of. Not only was its framing arguably misleading, and potentially harmful, but I’m not sure it even makes sense from a business point of view.

Remember the Blood Diamond movie? You think Pandora got huge publicity? That movie got 10 times more press. Which, you’d think, would make it a hit. Instead, it came in fifth on its opening weekend; one diamond dealer joked that if the entire trade hadn’t seen it, it would have come in seventh. (And in fact, the next week, it dropped to ninth.) All that press didn’t portray the film as what it was: a run-of-the-mill action flick.

Granted, the culture has changed since 2006, but most folks go to movies for fun. That’s the same reason they buy jewelry. They don’t consider buying baubles a form of social work.

Lacik is an extremely smart guy, and, might I add, an excellent podcast guest. But this whole affair reminds me of Pandora’s war against Alex and Ani, and the latter company’s fight against other charm brands.

I don’t want to say those wars hurt the charm business, but what happened to those companies afterward speaks for itself. As I wrote back then, they were engaging in a “pie-splitting” strategy, which the Harvard Business Review said tends to “drive short-term, unsustainable results where companies are merely ‘renting share.’ ” The publication added that “pie-growing” strategies are, to use an overused phrase, more “sustainable” in the long run.

The irony is, Pandora selling lab-grown diamonds will hopefully enlarge the overall pie. That’s good. But its current messaging risks hurting the diamond business the same way the company damaged the market for its signature charms.

It’s sad. I had hoped Pandora had learned from its mistakes. Here’s hoping it can course-correct.

(Photo courtesy of Pandora)

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By: Rob Bates

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