Are Diamonds Even a Luxury Anymore?

Summary

Podcast Summary: "Are Diamonds Even a Luxury Anymore?"

Podcast Information:

• Title: The Journal
• Host/Author: The Wall Street Journal & Spotify Studios
• Description: The most important stories about money, business, and power. Hosted by Ryan Knutson and Jessica Mendoza. The Journal is a co-production of Spotify and The Wall Street Journal.
• Episode: Are Diamonds Even a Luxury Anymore?
• Release Date: July 24, 2025

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Introduction: The Eternal Allure of Diamonds

The episode opens with Jessica Mendoza reflecting on the ubiquitous slogan, “A diamond is forever,” coined by De Beers. This tagline, introduced in 1947, became one of the most iconic advertising slogans, embedding the idea that diamonds symbolize eternal love and commitment (00:05 - 01:17). Jenny Strasberg, a reporter on the diamond industry, emphasizes the effectiveness of this marketing strategy in shaping consumer perceptions and driving diamond sales.

De Beers' Dominance in the Diamond Market

For much of the 20th century, De Beers maintained a near-monopoly over the global diamond supply, controlling approximately 80-90% of the market (01:29). This dominance allowed De Beers to influence diamond prices and consumer behavior effectively. However, technological advancements have since disrupted this control, enabling the creation of lab-grown diamonds and reducing the company's market hold (01:41 - 02:06).

The Rise of Lab-Grown Diamonds

The advent of lab-grown diamonds marked a significant shift in the diamond industry. Unlike natural diamonds, which are mined from the earth, lab-grown diamonds are created under extreme pressure and heat in controlled environments, ensuring they are chemically identical to their natural counterparts (05:03 - 06:04). Jenny Strasberg explains that these diamonds have been used industrially since the 1950s but have only recently entered the jewelry market in a significant way (05:14 - 05:32).

Impact of Blood Diamonds and Changing Consumer Awareness

In the early 2000s, awareness of the ethical issues surrounding diamond mining, particularly the phenomenon of blood diamonds, began to surface. The 2006 film Blood Diamond, starring Leonardo DiCaprio, played a pivotal role in highlighting how diamond sales were financing brutal conflicts in countries like Sierra Leone and Angola (03:45 - 04:08). This revelation tarnished De Beers' reputation and led to increased scrutiny and calls for responsible mining practices (04:00 - 05:03).

Technological Advancements and Market Shift

Lab-grown diamonds have significantly impacted the diamond market by offering a cheaper and ethically superior alternative to natural diamonds. The price of a 1-carat lab-grown diamond has plummeted by 86% since 2016, making them an attractive option for budget-conscious consumers (10:44 - 11:09). Jenny Strasberg notes that lab-grown diamonds now constitute about 20% of global diamond jewelry sales, a dramatic increase from less than 1% in 2016 (15:16 - 15:57).

De Beers’ Strategic Response

In response to the rising popularity of lab-grown diamonds, De Beers has employed several strategies to reaffirm the value of natural diamonds. CEO Al Cook refers to aspects of the lab-grown diamond market as a “huge con” (12:53) and emphasizes the rarity and authenticity of natural diamonds as their key selling points (12:16 - 13:10). De Beers has introduced the Diamond Proof machine, which helps consumers distinguish between natural and lab-grown diamonds by scanning them on the spot (13:48 - 14:09).

Additionally, De Beers has partnered with Botswana, a major diamond source, to highlight the economic benefits of natural diamond mining for local communities. This collaboration aims to reinforce the narrative that purchasing natural diamonds supports sustainable development in mining regions (14:27 - 15:12).

Consumer Perspectives: Embracing Lab-Grown Diamonds

The episode features a personal story from Kayla Goosby, who opted for a lab-grown diamond for her engagement ring. Initially unaware of lab-grown options, Kayla was swayed by the ethical considerations and significant cost savings. She states, “I don't want anyone to die over this diamond,” highlighting the moral impetus behind her choice (16:24 - 16:57). This anecdote underscores a growing trend among younger consumers who prioritize ethical consumption and value for money over traditional symbolism (15:12 - 17:21).

Challenges and Future Outlook for De Beers

Despite De Beers' efforts to maintain its market position, the surge in lab-grown diamond popularity poses a substantial threat. Anglo American, De Beers' parent company, has responded by marking down the value of its stake in De Beers by 45% over recent years, reflecting the company's declining fortunes in the face of market disruption (08:21 - 08:59). De Beers is actively seeking potential buyers or strategic partners to navigate this challenging landscape (08:07 - 08:41).

Jenny Strasberg highlights the rapid consumer pivot towards lab-grown diamonds, which many in the industry did not anticipate. This shift has forced De Beers to reassess its marketing and operational strategies in an increasingly competitive environment dominated by mass-produced, affordable alternatives (09:06 - 09:57).

Conclusion: The Evolving Landscape of Diamonds

The episode concludes by acknowledging the transformative changes within the diamond industry. While De Beers struggles to preserve the allure of natural diamonds, the market continues to embrace the accessibility and ethical advantages of lab-grown options. As consumer preferences evolve, the future of diamonds as a luxury persists, albeit in a more diversified and democratized form (15:57 - End).

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Notable Quotes:

• Jenny Strasberg [00:27]: “It put into the popular culture this idea that if you love someone, here's how you show it.”
• Jenny Strasberg [01:33]: “Most of it, right? 80 to 90%... really vast majority.”
• Al Cook, CEO of De Beers [12:53]: “Huge con.”
• Kayla Goosby [16:24]: “I don't want anyone to die over this diamond.”
• Jenny Strasberg [15:57]: “From 1% to about 20%... that's global.”

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Key Takeaways:

1. Historical Monopoly: De Beers historically controlled the diamond market, shaping consumer perceptions through iconic marketing.
2. Ethical Concerns: The revelation of blood diamonds led to increased consumer awareness and demand for ethically sourced gems.
3. Technological Disruption: Lab-grown diamonds have democratized the market, offering affordable and ethical alternatives that have rapidly gained market share.
4. Strategic Challenges: De Beers is actively seeking ways to differentiate natural diamonds and maintain its luxury status amidst rising competition.
5. Consumer Shifts: Younger consumers prioritize ethical considerations and value, driving the surge in popularity of lab-grown diamonds.

This episode of The Journal provides an in-depth analysis of the evolving diamond industry, highlighting the tensions between tradition and innovation, and the shifting values of modern consumers.

Transcript

[Jessica Mendoza]

There's a slogan about a gemstone that I've been hearing my entire life. You've probably heard it too.

[Jenny Strasberg]

A diamond is forever.

[Jessica Mendoza]

De Beers. A diamond is forever. The tagline of the original global diamond company, DeBeers.

[Jenny Strasberg]

It was the early version of Put a ring on it. Right.

[Jessica Mendoza]

My colleague Jenny Strasberg has been reporting on the diamond business, so I gave her a call.

[Kayla Goosby]

Where did the idea of a diamond engagement ring come from? What's the origin story here?

[Jenny Strasberg]

In 1947, the slogan that everybody knows a diamond is forever was born. And it's become one of the most iconic advertising marketing slogans of all time. What it really did is it put into the popular culture this idea that if you love someone, here's how you show it. And the idea that this gemstone would be a symbol of love, commitment, elegance, timelessness. You know, that was really a manufactured idea to sell diamonds. And it worked extremely well.

[Kayla Goosby]

It was brilliant. Some might say it was.

[Jenny Strasberg]

It was.

[Jessica Mendoza]

Throughout most of the last century, De Beers was the main supplier of diamonds to the entire world.

[Kayla Goosby]

At its peak, how much control did De Beers have over the diamond market?

[Jenny Strasberg]

I mean, most of it, right? 80 to 90%. Kind of depends on who you ask, but really vast majority.

[Jessica Mendoza]

De Beers controlled the diamond market back when a diamond was something that you mined out of the ground. But the industry has been shaken up by new technology. Today, if you're looking to source diamonds, you don't need a mine. You can create them in a lab. And that's slashed the value of both diamonds and the company best known for selling them.

[Jenny Strasberg]

Their value has been challenged by all these market forces.

[Jessica Mendoza]

With diamond prices falling, customers looking elsewhere, and a market flooded with cheaper alternatives, De Beers iconic brand is in need of rescue. The challenge? Convince a new generation of customers that natural diamonds are a luxury worth investing in.

[Jenny Strasberg]

The CEO, Al Cook. He used the words huge con.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Thursday, July 24th. Coming up on the show, how De Beers lost its sparkle.

[Leonardo DiCaprio]

Foreign.

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[Jessica Mendoza]

De Beers convinced the world that a diamond was forever, and buyers were willing to shell out big bucks for them. But in the early 2000s, people started to question the real cost of their forever.

[Jenny Strasberg]

And there was controversy and increasing awareness around what became known as blood diamonds.

[Jessica Mendoza]

Blood diamonds, like in the 2006 blockbuster starring Leonardo DiCaprio, which helped bring the dark reality of the diamond trade into the spotlight.

[Jenny Strasberg]

Tell me, how is that?

[Leonardo DiCaprio]

Who do you think buys the stones that I bring out? Dreamy American girls who all want a storybook wedding in a big shiny rock.

[Jessica Mendoza]

Audiences across the US came to see how diamond sales were being used to fund bloody civil wars in Africa, especially Sierra Leone and Angola.

[Jenny Strasberg]

And it really brought it to life just how families were torn apart and countries were being just torn asunder by this thing that was a luxury for wealthy people.

[Jessica Mendoza]

A lot of that criticism fell on De Beers because of its huge role in the market.

[Jenny Strasberg]

De Beers and other industry players started to develop processes that would ensure, or try to ensure that diamonds were sustainably and responsibly mined, that wars weren't being funded by sales of diamonds. And it was really a reform time for the industry and a test for the industry.

[Jessica Mendoza]

But in the 2000 and tens, a new kind of diamond started going mainstream.

[Kayla Goosby]

What are lab grown diamonds, broadly speaking? How do you make them? How does it all work?

[Jenny Strasberg]

We're talking about chemically the same as a mined diamond just created in a lab under extreme pressure, extreme heat. So recreating that in an industrial machine.

[Jessica Mendoza]

Lab grown diamonds have actually been used in industrial processes since the 1950s. Diamonds are the hardest known material, so they're really useful for sawing, drilling, and grinding. And after years of technological advances, lab grown diamonds started getting cut, polished, and turned into jewelry.

[Kayla Goosby]

What's the difference? Are lab grown diamonds essentially real diamonds?

[Jenny Strasberg]

Well, chemically, yes. So they are. They have the same hardness, the same sparkle, the same 100% carbon makeup.

[Jessica Mendoza]

So lab grown diamonds are real diamonds. It's just that they're made by humans and machines, not the earth, and in a lot less time.

[Jenny Strasberg]

And only you know the difference. Right.

[Jessica Mendoza]

I wanted to understand if the difference between lab grown and mined really matters to buyers. So I reached out to someone who's been waiting her whole life to shop for an engagement ring.

[Leonardo DiCaprio]

Hi, my name is Kayla Goosby. I live currently in Los Angeles, California, and I am 32 years old. In a month. Oh, in less than a month, actually.

[Kayla Goosby]

Well, I want to Start off by asking about your love life.

[Jessica Mendoza]

How did you meet your partner and.

[Kayla Goosby]

How long have you two been together?

[Leonardo DiCaprio]

I actually met my partner on a dating app and we've been together for five years now.

[Jenny Strasberg]

Wow.

[Kayla Goosby]

I love it when the apps work.

[Leonardo DiCaprio]

Right. Me too.

[Jessica Mendoza]

Kayla had found the perfect guy and they'd agreed they wanted to get married. But first she wanted to make sure she had the perfect ring.

[Kayla Goosby]

Is an engagement ring something you've always wanted?

[Leonardo DiCaprio]

Yes, an engagement ring is always something I've wanted. I've always believed that I wanted to pick out my wedding ring. I wasn't into, like, wearing the wrong right wedding dress or having the wedding per se, but I've always wanted to be the girl to pick her own wedding ring.

[Kayla Goosby]

So it was the ring for you? It was all about the ring, not any of the other stuff.

[Leonardo DiCaprio]

It was all about the ring? Yep, it was all about the ring.

[Kayla Goosby]

And why a ring specifically? Like, what is it about the ring that really spoke to you?

[Leonardo DiCaprio]

There's other things, you know, that's new coming out in our generation. Could have thought about a tattoo.

[Jenny Strasberg]

But.

[Leonardo DiCaprio]

The ring ultimately was the one that's the one that you put on your finger. That's the one that everybody knows remembers, and that's the one that, you know, ultimately people see you as, okay, she's taken. That's the one.

[Kayla Goosby]

Heard the slogan diamonds are forever?

[Leonardo DiCaprio]

Yeah.

[Jenny Strasberg]

Yeah.

[Leonardo DiCaprio]

Going into it, I never knew about a lab grown diamond. I only knew about the natural. So my mind is thinking natural is where it's at.

[Jessica Mendoza]

More options have been good for shoppers like Kayla, but it's been bad news for De Beers. So bad that De Beers parent company, mining giant Anglo American, wants to get out of the diamond business by selling its majority stake of De Beers.

[Jenny Strasberg]

You know, what is Anglo American going to get for this company? Will it be a sale to a strategic buyer? Will it be an ipo? You know, I think all options are on the table, but it is a process that could extend into next year. And they had really hoped to maybe.

[Jessica Mendoza]

Be further along because of the struggling diamond market. Anglo American has marked down the value of its stake in De Beers by a whopping 45% over the past couple of years, or $4.5 billion. De Beers is in the process of talking to potential buyers and has been considering other options.

[Kayla Goosby]

Did it come as a surprise to the industry how quickly consumers would pivot to lab grown diamonds versus natural ones?

[Jenny Strasberg]

I think it did to a lot of people in the industry. And it also was a bit of a Like how could this be happening?

[Jessica Mendoza]

How De Beers is fighting back is these days shoppers can find lab grown diamonds online, in shopping malls and even in budget big box stores.

[Jenny Strasberg]

Jenny calls it the democratization of diamonds for a mass audience.

[Jessica Mendoza]

And nothing says mass audience like Walmart.

[Jenny Strasberg]

So Walmart entered the lab Grown Game in 2022 and Game Changer, there is just a mind boggling array of diamonds that you can buy. Suzanne Kapner, my incredible retail coverage colleague in the US who's the expert on retail, she actually talked to Walmart for this story and they told us that these lab grown stones now make up half of their diamond jewelry assortment. Nothing to 50% the impact of this flood, and it really is a flood of lab grown diamonds in the past, especially five, six years, has really changed the pricing of the entire market. Both mined diamonds, you know, natural mined.

[Jessica Mendoza]

And lab grown lab grown diamonds were always less expensive than natural ones. But the technology needed to make them has only gotten cheaper and easier to come by. They're now being mass produced at factories in China, India and elsewhere. So the price of a lab grown has plunged. The cost of a 1 carat diamond is down 86% since 2016 and the price of natural diamonds has dropped as well.

[Jenny Strasberg]

The US is a very important market for De Beers and if you can go to Walmart and pick up dog food and motor oil and, and a.

[Kayla Goosby]

Tennis bracelet on the way like, and.

[Jenny Strasberg]

Also like a beer, some diamond studs that are lab grown for a fraction of the prices as you would pay. Their goal is not to compete with Walmart. The goal is to have the De Beers name even more so than it is now. Be a consumer facing luxury retail brand.

[Jessica Mendoza]

That's led De Beers to adjust its strategy. Work harder to convince consumers that natural diamonds are just more precious than lab grown because they're rare.

[Jenny Strasberg]

This is one of the challenges that De Beers faces. And Al Cook, the CEO, is working very hard to reiterate the idea that rarity is value and something special is not what you walk into Walmart and buy. That was created over three weeks and then put on a boat from India.

[Kayla Goosby]

Right. There's sort of a romance to the process of a diamond making its way from under the earth to your finger as a symbol of something.

[Jenny Strasberg]

Right? And that romance is exactly what they're trying to rekindle now. They're trying to make that the acceptable version of value. If it didn't come from deep within the earth, it's just not the real thing.

[Jessica Mendoza]

De Beers is leaning into that idea in its recent marketing campaigns.

[Leonardo DiCaprio]

Because just like your journey, a natural diamond is worth the wait.

[Jessica Mendoza]

De Beers CEO Al Cook told Jenny that jewelers who sell Lab grown diamonds at a steep markup are being dishonest with their customers. He said that they masquerade their products as rare, even though lab grown diamonds are now widely available. That's why he called elements of the Lab grown diamond market a huge con.

[Jenny Strasberg]

And he said that's a problem. People are getting ripped off by believing that they need to walk into a jeweler and pay thousands of dollars for a diamond that they could go to Walmart and get for $100 or $200.

[Jessica Mendoza]

DeBeers says there's not a lot of difference between those lab grown diamonds. But the company says there is a noticeable difference between lab grown and natural diamonds, even if it doesn't seem that way to the naked eye. And De Beers is now trying to help jewelers make it easier to show customers that difference.

[Jenny Strasberg]

So they have this machine called Diamond Proof, and it's about as big as a large air fryer, and it can sit on a jewelry store counter.

[Jessica Mendoza]

De Beers says the machine scans a diamond and usually seconds later, it reveals whether or not it's natural. The company hopes this moment gets in a shopper's head.

[Jenny Strasberg]

If this machine can tell so easily, then don't you care that it's so easy to tell the difference between the two? So that's the message. This fits the whole theme of differentiation, that these are not the same thing.

[Jessica Mendoza]

The other part of the strategy emphasized that natural diamond mining practices can provide a significant economic boost to the countries mining them. De Beers is stepping up marketing alongside Botswana, its biggest source of diamonds, to drive the point home. Botswana is a minority owner in the company.

[Jenny Strasberg]

They're big partners, Botswana and De Beers. And so part of the hope is the real and authentic and the way to support these countries that are so dependent on diamond mining. And if we want to help these countries modernize and do all that they want to do for people who live there, you know, this is the way to do it.

[Kayla Goosby]

Is this all working? How are things looking for De Beers as a company?

[Jenny Strasberg]

I mean, it's been really, really tough. So last year, more than half of the engagement rings purchased in the US had lab created diamonds.

[Kayla Goosby]

Wow.

[Jenny Strasberg]

And that's up about 40% from 2019. That's according to a survey by the Knott, the wedding planning website. Less than 1% of the market was lab grown in 2016. Last year, lab grown made up about a fifth of global diamond Jewelry sales.

[Kayla Goosby]

Wow, that is a huge rise in a decade. Less than a decade.

[Jenny Strasberg]

So that's less than a decade, from 1% to about 20%. And that's global.

[Jessica Mendoza]

Sellers of lab grown diamonds say companies like De Beers are stuck in the past and in self preservation mode. And for some shoppers, like Kayla and her partner, tradition isn't the deciding factor.

[Kayla Goosby]

And so what did you decide to go with in the end?

[Jessica Mendoza]

Natural or lab grown?

[Leonardo DiCaprio]

So I went with lab.

[Kayla Goosby]

Ah.

[Jessica Mendoza]

And why.

[Kayla Goosby]

Why go with the lab grown option? What tipped the scales for you in the end?

[Leonardo DiCaprio]

I don't want anyone to. I don't want it to be. I don't want nobody to die over this diamond. It's not that serious for me, but ultimately it's just a ring that I'm gonna put on my finger. It's, you know, it's still of substance to me, and I'm more so focused on getting the house. Like, that's my thing right now.

[Kayla Goosby]

So the price point helped.

[Leonardo DiCaprio]

The price point was a big factor in it all.

[Jessica Mendoza]

You're not bothered?

[Kayla Goosby]

You know, some people who are critics of the lab grown diamond would say, you know, it's not a quote unquote, real diamond. Yeah.

[Jessica Mendoza]

That doesn't bother you?

[Leonardo DiCaprio]

No, because I don't care what people think. At the end of the day, it's between me and my union, you know, and at the end of the day, if we're both satisfied, we're both happy with the decisions that we made, then, you know, that's all that matters.

[Jessica Mendoza]

Well, do you have the ring yet?

[Kayla Goosby]

Can we see it?

[Leonardo DiCaprio]

I don't know, actually. The ring, he put it up. It's somewhere. He didn't give it to me before he left.

[Kayla Goosby]

Oh, it's hidden.

[Leonardo DiCaprio]

It's hidden? Yeah. It's gonna be really nice.

[Kayla Goosby]

Congratulations, Kayla.

[Leonardo DiCaprio]

Thank you.

[Kayla Goosby]

I know it hasn't quite happened yet, but it's basically about you. So congratulations. So excited for you.

[Leonardo DiCaprio]

Thank you.

[Jessica Mendoza]

That's all for today. Thursday, July 24. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Suzanne Kapner. Thanks for listening. See you tomorrow.