Imagine for a moment that you’re a consumer. You’ve read the Wired cover story on “cultured” diamonds. Or you saw them on Good Morning America or a PBS show or one of the many media outlets that have done synthetics stories in the past year. You’ve heard that synthetics are just the same as natural stones. Cheaper, too. They are revolutionizing the diamond industry. You want some.
But here things get tricky. Chances are, no stores in your town carry synthetic diamonds. None in nearby towns, either. None even in your state. A search on the Internet unearths more articles about the stones than actual diamonds. And, it turns out, many “cultured” gems sold online are really cubic zirconias—a misleading practice, says the Jewelers Vigilance Committee.
Which raises a point that’s been lost in the recent media coverage: Large quantities of synthetics may hit the market some day. But they aren’t here yet.
“Synthetics are barely out of the starting gate,” notes Tim Dabson, manager of De Beers Consumer Confidence department. “The numbers they are talking about are very, very small—almost infinitesimal compared to the natural diamond market.”
A flurry of activity. Availability aside, this is a time of unprecedented activity in the synthetic sector. Boston’s Apollo Diamond will “soft-launch” its Chemical Vapor Deposition (CVD) created near-colorless stones at the end of the year. Gemesis, Lucent Diamonds, and Chatham Created Gems already are selling colored synthetics (mostly yellows) produced using the HPHT growth process. And Chinese scientists are working on a third method of production—carbon dioxide-based—that may be the cheapest yet.
But there is a reason that no company has released large quantities to the market: They don’t have them. Gem-quality diamonds are hard to grow. Most Gemesis stones, for example, are under 1.25 cts. And while the company once talked about selling colorless synthetic diamonds, it now says it can’t get the price low enough to make it worthwhile.
“One of the misconceptions is that these diamonds are grown like a synthetic ruby or emerald,” says David Hellier, chief marketing officer for Gemesis. “Diamond is the most fickle of gemstones to grow. We can only control the color range within a certain extent. We can say ‘This machine will grow yellows,’ but we can’t say, ‘It will only grow fancy intense yellows.’ There are just too many variables in the growth process.”
Apollo has been similarly frustrated. It can produce 1-ct. G, H, and I near-colorless stones and high-color (D, E, and F) small stones, but so far not many high-color large ones have been created. “This is new technology, and we are going down this path basically alone,” says Apollo CEO Bryant Linares. “We know we can grow high-color small diamonds, but can you consistently produce 1-ct. D-Flawless stones? That’s going to take some time.”
The diamond industry, of course, is not waiting around for this to happen. The World Federation of Diamond Bourses met recently in London to figure out just what to do about these stones, and the Israel Diamond Exchange has actually banned them—a tactic it tried years ago, unsuccessfully, with fracture-filled stones. (For Chatham’s response to the IDE, see JCK‘s Web site at www.jckgroup.com.) The IDE president compared them to conflict diamonds, although it should be noted that synthetic diamonds are a legal product, while conflict diamonds are not.
Top concerns. The industry’s concerns fall into three categories:
Consumer confidence. Right now, most jewelers and even many gemologists cannot tell the difference between a synthetic diamond and a natural stone. A TV reporter armed with this information could cause lots of trouble.
Fortunately, all synthetics are distinguishable with the right equipment. (This is not the case with natural diamonds that are color-enhanced by HPHT, in which the treatment is undetectable on a small percentage of stones.) Some scientists can visually identify synthetics, though this is harder to do with CVD-grown synthetics than with HPHT-grown stones. “You don’t have the identifiers of flux, nor do you have some of the growth characteristics that occur in the HPHTs,” says GIA’s vice president of gem identification Tom Moses.
Fortunately, in the next year, the identification process might become easier. De Beers is making plans to release DiamondSure, a user-friendly machine that detects synthetics, moissanites, and Type II diamonds, which can be color-treated using HPHT. The only problem is that the machine sometimes delivers false positives, and a definite identification can be made only with advanced equipment.
Still, gemologists like EGL’s Branko Deljanin are hopeful that there might soon be easier ways to detect the stones. “We are always looking for ways to identify these things, just as the manufacturers are always looking for ways to improve their products,” says Sharrie Woodring, EGL’s senior gemologist.
The ‘cultured’ conundrum. Most credit Gemesis and Apollo with sharing their technology and committing to disclosure. But there is one point of contention—the word “cultured.”
Both Gemesis and Apollo plan to market their stones as “cultured,” although industry groups hate that description. JVC’s Cecilia Gardner calls it “insufficient” as disclosure, noting the diamond-growing process bears no resemblance to culturing a pearl. GIA’s Tom Moses agrees: “I don’t think it is a very good term. I think it crosses over into being confusing.” De Beers executives are so dead-set against it that they refer to it as “the C-word.” One industry group has even looked into fighting it legally.
It’s not clear whether they’d have a case. The issue has been litigated once—in the 1960s, when Carroll Chatham was told he could not use the word “cultured” to describe his emeralds. But that shouldn’t be considered the last word on the matter, says Gardner: “That opinion is old and not necessarily authoritative. The FTC’s standards have changed, and the facts on the ground are different.” Gemesis officials point out that the FTC has not said the term is misleading, and that the company’s marketing materials also include the more accepted term “created.”
“We do think what happens to our diamonds is similar to what happens to a cultured pearl,” says Hellier. “If you talk to consumers and ask them what ‘cultured’ diamond means, they will say ‘man-made.’ We want to make sure consumers know exactly what this product is.”
Competition. That leads us to our final question: Once they know, will they buy? Will consumers care whether a diamond was created in the Earth or by human hands?
The industry line is that synthetic emeralds and sapphires have not killed the market for those gems, and that created diamonds are the latest in a long list of look-alikes—from moissanite to cubic zirconia—that haven’t dented the diamond market.
All true. Below the surface, however, there is the uneasy sense that synthetics are a more serious competitor than cubic zirconia. CZs look like diamonds, but they are not the same stone. Lab-grown stones are chemically, optically, and physically no different from anything that comes from a De Beers sightbox.
They resemble natural diamonds in another important way, too—price. Tom Chatham once boasted his synthetic colorless gems would sell at one-tenth the price of naturals, but today’s producers are talking about much higher price tags. The Gemesis fancy colored stones are sold at a quarter of the cost of natural yellows—about the same as a near-colorless stone of comparable size and clarity. That’s a bargain for colored diamond fans but not necessarily for the average consumer. Apollo’s colorless stones will likely sell for 30% less than comparable naturals—again, a decent discount, but hardly a steal.
This news has disappointed some consumers. Karl Shrode of Shrode Jewelers in Sarasota, Fla., who sells Gemesis stones, says he’s “had people who look at [synthetics] and think that they should be priced the same as cubic zirconias. They say, ‘If these are man-made, why aren’t they a much lower price?'”
Still, the few retailers selling synthetics say there has been surprisingly little resistance from customers. “Most of the resistance we’ve seen wasn’t because the stones were grown,” says Alan Miller of Alan Miller Jewelers in Oregon, Ohio. “It was that they were yellow.” Shrode says carrying the stones has been worth it just for the publicity they’ve brought. “People are just intrigued by the idea of a man-made stone,” he says. “I can’t tell you the number of people who have come in our store who never knew we existed.”
If synthetics do come to market, conventional wisdom is that they will be used more for fashion than bridal jewelry, as not many suitors want to give a token of love that could be called “synthetic.” Still, marketers are thinking big. Linares notes that $2 billion worth of cubic zirconia is sold annually, and he predicts that synthetics will be a $1 billion industry within five years. “The diamond market is projected to hit $78 billion by then,” he says. “So a $1 billion sub-market is not unreasonable.”
Of course, a lot depends on the effectiveness of the companies’ marketing. Plus, it’s possible the mined diamond industry will mount a counterattack. De Beers executives already are stressing the benefits of natural stones.
“Synthetics are a totally different product from natural diamonds,” says De Beers’ Tim Dabson. “Our consumer research shows natural diamonds have emotional connotations—like love, commitment, and permanence—that you don’t find in something that was popped out of a factory three days ago.”
But Linares says his message “will be very supportive and complementary to the mined diamond market. This will create another niche. We want to show that a diamond is for everyone.”