Diamonds
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Ready or not, lab-grown diamond companies poised to arrive in '07
By Susan Thea Posnock
May 16, 2007
Sarasota, Fla.—For years, synthetic diamonds have been like a specter, hovering over the jewelry industry but not making much noise outside of a mainstream media story here and there.
Producers of the gems—such as Florida-based Gemesis Corp. and Apollo Diamond in Boston—say the category did not have the production, distribution or sales and marketing reach to live up to the hype and embrace the spotlight that intermittently fell upon it.
"In 2003 [in a cover story in Wired magazine], we got put on the map and there was just no distribution," Gemesis' Chief Operating Officer Clark McEwen says. "All of that awareness was wasted because people couldn't find the product."
Now it seems that the fortunes of synthetic producers are changing. Mining company BHP Billiton estimated earlier this year that synthetic diamonds will take a 5 percent stake in the market over the next five years.
And four years after the Wired story first flickered the prospect of lab-grown diamonds before consumers, McEwen says the stones are now ready for their close-up.
"Our capacity is growing steadily every day, and now we believe we have enough product that's out there and getting into the proper distribution channels so that it's time to start raising our profile," McEwen says.
He explains that the company is adding a new diamond-producing machine every two days and, with output quadrupling in the last six months, has increased its distribution.
Buoyed by the rapid growth, Gemesis named teen golf star Morgan Pressel as a celebrity spokeswoman and chose BaselWorld for another big April announcement: Joan Parker, a 30-year diamond industry veteran who was most recently head of public relations for the De Beers/LVMH (Moet Hennessy Louis Vuitton) retail venture, was being brought on as a board advisor and brand ambassador for its lab-grown diamonds.
Lab-grown diamonds are for now?
If the idea of using a brand steward and a celebrity to push a product sounds familiar, it's because Gemesis is taking a page from the natural-diamond marketing playbook.
In Parker, the company has found a key play-maker. The former director of the Diamond Information Center, Parker has been at the forefront of building up the U.S. diamond market.
"I'm happy to be back in the diamond business, even though it's a different source of diamonds," Parker says, adding that she was drawn by the opportunity to get in on essentially the ground level for a product she considers new and exciting.
"I just think it's an open book what we can do," she says. "I'll do a lot of the same things I did for De Beers and the [Diamond Trading Co.] over the years. My role is simply to raise the profile, not only of Gemesis, but the category of cultured diamonds."
That goal will involve a total marketing effort, from publicity to consumer advertising.
Parker says the reception she received in Basel was positive, but she acknowledges some in the industry are wary about lab-grown diamonds' impact on the market.
"The industry is concerned because they see it cutting into the market for natural diamonds, but there should be room for everybody out there," she says. "Because of who I am, people are saying 'How could you?' I'm still in the diamond industry, and I'm not going to do anything that in my mind will hurt the industry I was in for 30 years."
The only advantage the man-produced product has, she adds, is price. Gemesis' fancy-colored stones are about a third of the price of natural, fancy-colored stones—but that's still high-end, given how rare and expensive natural fancies are.
Gemesis can produce colorless stones but is sticking to color for now because there's currently enough mined colorless stones on the market, McEwen says.
Apollo, however, which uses the chemical vapor deposition (CVD) process to produce diamonds, is focusing on colorless stones and expects to increase its production in the next year or so, says President and Chief Executive Officer Bryant Linares.
Gemesis—which is using the high-pressure, high-temperature method to grow its diamonds—has more "mature technology," while Apollo is still in the phase of moving its growing operations into manufacturing size, Linares says.
"Three years ago, we announced to the world that we had a CVD-grown diamond and that it was possible," he says.
The next steps were to produce a diamond that was colorless; then to size. The final hurdle is volume, Linares says.
To date, Apollo has focused on 0.25-carat to 0.33-carat sizes of near colorless and colorless stones in small quantities—the hundreds of carats. But after several years of increasing its inventory of seeds to grow the diamonds, Apollo is now poised to increase both sizes and volume. Linares expects to move into 0.5-carat and 1-carat diamonds within the year, with some larger showpieces.
"The numbers will go up from the hundreds to thousands of carats," Linares says.
He doesn't have an exact time frame, but says five-figure production is in sight.
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