“A natural one-carat stone costs about $10,000 for lab-grade and about $2,000 for lab-grade, so there’s a huge polarization between the two,” says Brett Afshar, M.D. and founder of Queensmith Jewelers.
Lab-grown diamonds are no longer a new technology in the jewelry industry. While they were originally created in the 1950s, they didn’t really take off in the consumer jewelry industry until the late 2010s.
Queensmith’s 2019 study found that lab-made diamonds accounted for about 1 percent of its engagement ring sales. By 2023, that number has risen to 53 percent and will only continue to rise.
Lab Incubation is now an emerging industry.Allied Market Research estimates that the entire lab incubation industry will be worth about $22.3 billion by 2021 and is expected to grow to $55.6 billion by 2031.
“If we look at the February figures, 74% (of sales) were lab-grown and 26% were natural, but we are very well positioned to offer lab-grown products (as a customized workshop), so we’re not surprised that “as far as labs go, it’s so high,” Afshar explains.
As a custom shop/retailer in Hatton Garden, Quinsmith is in a unique position to describe the state of the lab-grown versus natural diamond market. The company has a wide range of consumers who are looking for the perfect ring, and Afshar reveals that while many customers have already decided whether they want a lab-grown diamond or a natural diamond, there is still a large percentage of consumers who have the option to go either way.
“There’s a big segment in the middle, between the two of them, like swing voters, and that’s probably where the real interest in this industry lies. While there is a cost of living crisis, the desire to have something beautiful, big and gorgeous is still there, and often the price difference between natural and lab-grown means that more customers are looking at natural and choosing natural lab-grown, ” he says.
The cost difference, especially in the current economic climate, seems to be driving the surge in lab-grown diamonds. Afshar explains that many customers don’t see the value in the rarity of natural diamonds.
“I would say that customers, like everything, are value-driven, and if they don’t see the value in the rarity of nature, they’re going to go with the lab-grown product. It looks the same and is essentially the same,” he says.
According to Afshar, it is cost that is creating this trend. In his view, natural diamonds have long been too expensive, and lab-grown diamonds create a two-tiered market that can better reach lower-income people.
“There are some sad stories in this industry about how the diamond market has been hit hard by the growth [of lab-grown]. Lab-grown products are disruptors in a market that hasn’t been disrupted in 3,000 years. Consumers researching online will make their own informed decisions; they will naturally consider price and value and make decisions based on whether they want a natural lab-grown product.
“But it’s a decision that the industry has no control over. You can’t influence one way or the other. We learned early on that we couldn’t control whether our customers wanted naturally grown or lab-grown; we had to offer both. As a business, I believe the two will coexist very comfortably as compatible products.” Afshar said.
Costs aside, Afshar also believes that another reason for the growth of lab-grown diamonds is that more and more people want their diamonds sourced ethically and sustainably. This means that Queensmith places great importance on knowing where its diamonds come from.
“Many of our clients are very interested in sustainability, and it is certainly becoming more and more likely that we can prove that our diamonds are grown using ecological methods such as GSM or wind and solar power. Many of our clients want it to be based on modernism, but it is sustainable. We are therefore making a positive decision to establish clear and close links with our suppliers.” Afshar notes.
That said, Afshar believes that growth has leveled off and that eventually lab-grown market share will probably take about two-thirds, with naturally-grown market share probably taking the remaining third. He believes natural diamonds will always have a place in the jewelry market because of the prestige and emotional value they still hold for some consumers.
“It’s hard for some people, no matter how smart, to assign emotional meaning to something one creates. So there will always be big clients who want something natural, but can’t get their sentimental feelings in something created in a lab. It doesn’t have those nice romantic connotations,” he explains.