From the Video:
Martin: We are Diamond Foundry, and we make diamonds like nobody else. We culture them, creating jewelry grade diamond gems. Our team’s background is in solar power innovation, and we were looking for something new. The diamond industry occurred to us as a very traditional industry characterized by human rights abuses, child labor, all the really terrible things. And no one seemed to really, seriously, try to make a change in the industry. We started looking at how to make diamonds, and then people from all around the world starting knocking on our doors, saying “we want diamonds for jewelry gems.” So we switched gears and started making the kind of diamond that is the purest diamond for jewelry applications.
Jeremy: We started Diamond Foundry three years ago, and we’ve only just recently made any announcement that we even exist. We’ve been through many generations of manufacturing technology to achieve the level of purity of our product that we have today. People have been growing diamond for fifty years, but growing the purest diamond is extremely difficult to achieve.
Martin: Our process is based on putting a natural diamond into a plasma reactor. The plasma reactor contains effectively a “sun on earth” — it’s like the outer core of the sun — and under that extreme heat, we grow diamonds atom by atom on top of an earth-diamond substrate. The result of this is that our diamonds are atomically identical to mined diamond. No jewelry can tell any difference. Our product sells right now at somewhat higher level than mined-diamonds just because people appreciate the origin and it’s very limited edition right now. Our diamonds create a first class alternative to mined diamonds. And we’re finding a lot of people are interested in a product that is 100% ethical and has none of the issues associated with mined diamonds.
Joining Forces With Other Eco Conscious Groups and Innovators
In January 2018 a special event was held by Diamond Foundry.
VOW: engagement rings for the modern world was the first product of Diamond Foundry teaming up with Vrai & Oro’s founder Vanessa Stofenmacher (recently named a Forbes 30 under 30 winner) and her really talented team.
Diamond Foundry set out to reinvent diamond jewelry from mine to finger — and the launch of VOW marked the completion of this entire cycle. They create diamonds from pure atoms in San Francisco; and sell them direct to consumers with rings they design & make in Los Angeles, California.
Just like ice from a freezer is the same as ice from a frozen lake, Diamond Foundry diamonds are as real as diamonds dug out of the Earth. The origin is the only difference.
The diamonds are each unique. No two are alike. And each is rare because scaling this technology is 1,000 times more expensive than scaling mining.
As much as the technology is changing in the industry, so are the buyers and business models, and that’s why Diamond Foundry expressed such excitement about teaming up with Vanessa and her team.
It is impressive what momentum Vanessa and her team have been able to build with Vrai & Oro’s simple daily-wear jewelry. What Diamond Foundry was even more excited about with this teaming up is that they’ve had a great idea of a new kind of an offering around engagement. And what could be better than an engagement offering designed by a group of really talented millennial women themselves (as opposed to corporate executives at large jewelry companies targeting what they believe to be millennial women).
VOW is really a complete reinvention of the whole process around engagement. It starts with refreshed, simpler designs of the rings and a conscious choice of a fully transparent source of diamonds. Then it removes the barrier between store and home by allowing couples to try rings at home for free and together take their time to get comfortable with a choice and then order it. It’s part of moving engagement from a highly stressful experience towards a more collaborative and satisfying process.
A few months later, on April 1, to benefit Pure Earth, an international non-profit dedicated to cleaning up toxic pollution, New York-based jewelry designer Pamela Love teamed up with Diamond Foundry to create responsibly sourced jewelry.
The earrings were made from mercury-free gold and set with Diamond Foundry’s conflict-free, eco-friendly diamonds. The elegant designs were featured in Vogue, the earrings were modeled by Molly Bair (shown above) and photographed by Skye Parrott.
Diamond Foundry and Pamela Love both received the Pure Earth Impact Award for their commitment to sustainable practices.
As sustainable fashion becomes not just a trendy thing to do, but an actual necessity, designers and organizations are becoming dedicated to taking firmer steps toward conservation. Many of these are joining forces. Pure Earth has previously made headlines from their efforts in some of the world’s poorest communities. Their work involved combating toxic pollution, a problem linked directly to manufacturing processes. Rethinking material sourcing doesn’t mean sacrificing design, and Pure Earth has certainly proved it. The nonprofit ran Heavy Metal auction and enlisted some of the coolest jewelry labels around for this project. They featured fine jewelry from more than a dozen brands including Ariane Zurcher Designs, Mociun, Pamela Love, David Yurman, Aesa, Jeff Hoo, and Dana Bronfman.
The auction served to showcase the best in responsibly crafted pieces. All pieces were one-of-a-kind items.
Mercury emissions are a big concern, but there are mines that can produce mercury free gold. Gold mining is actually the leading source of mercury pollution in the world. Changing the manner in which gold is extracted will undoubtedly have a hugely beneficial impact on the environment.
Richard Fuller, president of Pure Earth said, “Consumers have probably heard about ‘blood diamonds,’ but few know about gold’s connection with toxic mercury,” While the company has been working directly with artisan miners to train them in mercury-free techniques, consumer buying power is really the last word and that’s where the key lies in instigating change. “Increasing the demand for mercury-free gold will help persuade more miners to make the switch. We already see progress. In Mongolia, Pure Earth has trained over 1,000 miners to go mercury-free, with many more on the waiting list.”
Getting customers on board means offering them appealing and accessible options, something the auction handles admirably. For designer Pamela Love, the decision to participate was an easy one. “It’s our job as designers and educators to make strides toward meaningful change in jewelry-making standards and practices,” says Love. “We need to push the industry to be as ethical and environmentally friendly as possible.” Love has become active in trying to bring changes to the industry, and while making the trip to Suriname to work with policy-makers connected to the mining sector, she found an ideal partner in Pure Earth. “Having seen the negative effects firsthand, I feel that I have to do everything in my power to inspire positive change. My business is far from perfect, but we are working every day to take strides.”
We’re all becoming more and more aware that the provenance of what we buy affects us all.
Questions about the things we buy are important. When we have not questioned how or where manufacturers make whatever product they want to sell us, well, they pretty much get away with selling us crap.
While diamonds sold to us are not crap unless we choose poorly, there’s a whole lot of baggage and misery attached to diamonds, even those which have gone through meticulous ethical checklists which frankly we can do without. Why should we dig a hole the size of a small village just to decorate the fingers of a dozen or less “lucky” women.
Speaking of lucky, we are actually lucky to have a company that can now create a diamond without needing to dig deep into the ground.
Diamond’s Special Place In Society
While sales of created diamonds are still just 1% of the market it is an area that is fast becoming of great interest to a great many people.
The mining of natural diamonds has gone through various stages but in the past few years there has been a sort of race to see who can get the most. Last year more than 180 million carats were dug out of the ground. Compare that to the 1990’s when 100 million carats was the going annual haul. The current rate is not going to last and eventually mining will peak. Rumor has it that diamond mining is already reaching that peak and that it will begin to decline after 2019. We know that the Argyle pink diamond mining shut down in 2018. As diamonds become rare, not everyone is going to want to spend the massive amounts that will be required to purchase them.
Created diamonds are making it possible to enjoy the diamond ring tradition without spending as much while still experiencing the beauty that the diamond uniquely gives us.
As far as innovative companies this one ranked #2, right after Gucci in Style, and in good company with fellow innovators Apple, Netfix, Square, Spotify and Amazon. “For adding sparkle to the man-made gemstone business.”
What Fast Company says about them:
This San Francisco-based company is taking above-ground diamonds to massive scale, providing the clarity and quality of mined diamonds en masse, with no ethical issues like the ones that plague blood diamonds. Through an intense lab process, this company creates jewels via plasma reactor technology that mimics the outer core of the sun. Founded in 2013, the company currently makes 100,000 carats a year in its South San Francisco facility, with 1 million carats per year on the way once its Wenatchee, Washington, factory opens in 2018. Those diamonds are then sold either wholesale to jewelers around the world, or used in-house for its direct-to-consumer jewelry brand which it acquired in November 2016. Counting Leonardo DiCaprio among its investors, this company is also wooing the fashion set with Paris Fashion Week events and partnerships with Barneys New York and Swarovski.
Comparing Diamonds with Diamonds
There have been some interesting developments in regards to advertising lab grown diamonds which will make it easier to market created diamonds.
As part of its renewed jewelery guidelines, the Federal Trade Commission (FTC) has implemented a number of small but significant changes regarding created diamonds. They begin with a new definition of diamond which is now as follows:
‘A diamond is a mineral consisting essentially of pure carbon crystallized in the isometric system’ FTC
Eliminating the word ‘natural’ from the way it was previously defined implies now that a diamond does not have to be a natural mineral. The old definition is archaic considering it was done way back in 1956. Lab made diamonds were still in the early experimental stages. The FTC said that, ‘Since then, technological advances have made it possible to create diamonds in a laboratory. These stones have essentially the same optical, physical, and chemical properties as mined diamonds. Thus, they are diamonds.’
Secondly, the term ‘synthetic’ is no longer useful. The FTC suggests that synthetic is often interpreted as being ‘artificial’ when in fact man-made diamonds are not sufficiently different to mined diamonds to be considered different.
The FTC guidelines go on to say,
‘The record indicates many consumers mistakenly believe “synthetic” means an artificial product such as cubic zirconia, which lacks a diamond’s optical, physical, and chemical properties. Given the likelihood of consumer confusion, the final Guides do not include “synthetic” among the examples of terms that marketers may non-deceptively use to qualify claims about man-made diamonds, thus eliminating the contradiction – If a marketer uses “synthetic” to imply that a competitor’s lab-grown diamond is not an actual diamond, however, this would be deceptive.’
For years, the FTC has omitted words like gem, stone, real, genuine and gemstone from their dictionary when referring to man-made diamonds. However, it said that its previous guidelines as, ‘circular, inadequate guidance that relied on highly subjective judgments.’ The FTC compared the situation with diamonds to the one with pearls which can either be found in the wild or may be cultured.
The FTC also has made clear distinctions between man-made diamonds and the much cheaper diamond simulants.
The FTC says that it is unfair or deceptive for marketers to use certain the words unless warranted. These include ‘‘laboratory-grown,’’ ‘‘laboratory-created,’’ ‘‘(manufacturer name)-created,’’ ‘‘synthetic,’’ or other word or phrase of like meaning with the name of any natural stone to describe any industry product unless such product has essentially the same optical, physical, and chemical properties as the stone named.
It is also unfair or deceptive to use the word “composite diamond,” “hybrid diamond,” or “manufactured diamond,” unless the term is qualified to disclose clearly and conspicuously that the product: A) does not have the same characteristics as the named stone; and B) requires special care. It is further recommended that the seller disclose the special care requirements to the purchaser.
Ok, so what does all this mean?
Basically it’s just an acknowledgement by the Federal Trade Commission that grown diamonds are not simulants. They are as good as the real deal.
One can even make a case that in some ways they are even better.
Diamonds as Investments
Most people hope their diamond will hold value. But does it? Should you think of a diamond as an investment?
Paying retail prices is not investing; it’s buying a luxury good.
The moment you walk out of the store, diamond in hand, the value of your diamond had dropped instantly to its wholesale market price. If you paid any more than that, you will have lost that much if we are thinking about this purchase as an investment.
Basically, it’s not an investment.
But is that the end of the story?
Retail diamonds today should really be thought of as a luxury item. Very much in the same way you would consider the purchase of a luxury item of clothing from your favorite high end designer. It’s the same with high end shoes or bags. You buy and wear because you love it, not because you plan to resell it.
There exists a niche market for collectors of unique million-dollar diamonds. This market behaves much like the art market. If you know where to spend the money you can get some very nice returns. Find a decent sized pink diamond and you will likely find it increases in value over the long term. But retail diamonds, no.
These are not part of the investors market.
Wholesale market prices for diamonds are purely a function of two forces: supply and demand. OK, it’s the same with everything. But the thing with diamonds is that there is has been just enough supply to maintain a price that supports the industry. But the supply is not tight enough to place second hand diamonds in a high enough demand to fill any shortfalls. The extent of past price stability is a clear indication to any economist that the diamond cartel has been doing a good job managing supply. Recently they have not done a good job as mined diamond prices keep dropping:
This is why it makes financial sense to buy what are being termed “aboveground diamonds”. These lab grown diamonds are identical to mined diamonds in atomic structure. And much better value. And once you realize that you are not buying an investment vehicle you can relax and just enjoy the beauty of this luxury.
In June 2018, De Beers Group gave up their long-held dogma of not offering lab grown diamonds for the jewelry market. De Beers Group has been producing somewhere upward of 30 million carats a year, but they are obviously feeling threatened by a company like Diamond Foundry that is producing a mere 100,000 carats a year.
The move, suffice it to say, surprised many in the diamond industry.
The headlines, though, were positive for lab diamond producers: “Lab Diamonds Are Now Officially Mainstream,” is the title of a July 2018 article by “Jewelry Industry Authority” JCK Online.
Lab diamonds are now legitimized and able to be purchased by every large diamond buyer in the global value chain of the industry. This is a huge huge change from when large buyers had to be fearful and proceed cautiously. Diamond manufacturers can now communicate with these large buyers via their official emails rather than clandestinely through their gmail, hotmail or yahoomail accounts.
The flood gates have opened in many ways. The minimum monthly purchase quantities that these buyers are interested in often exceed the lab growers entire production capacity. But some areas will undoubtedly have their demands filled.
Lab diamonds are on track to become the choice for 100% of all non-bridal jewelry. Consumers buy jewelry and designs in this market, and as long as it is high-quality material, the non-mined origin does not truly matter to people in this market — and likely only helps via the environmental credentials and guaranteed origin of lab diamonds.
DeBeers is offering lab diamonds only in <1ct sizes and set as part of their jewelry. (Less than 7% of the main USA lab diamond production value is diamonds up to 1ct in size.) This limits the market reach of their new product because much of the buying demand out there is for loose diamonds and rough diamond in larger sizes. Other suppliers now have the opportunity to fill that huge void while riding on the legitimization of the product category.
Growers whose technology can only grow smaller rough, yielding <1ct polished diamonds, will be impacted competitively. These are primarily the Chinese producers using fast-cycle high-pressure presses who are already dominating the melee market. However, these producers are already way ahead of the production that De Beers plans to achieve by 2020 including lower pricing. Note that the smallest, “melee” diamonds are already priced at even less per carat today. 500k carats from De Beers are not so large in an industry that shipped 180 million carats in one year. Most importantly though, De Beers is expanding the demand for the smaller diamonds by legitimizing the category.
De Beers is not competing in the most attractive market of “uniques”, that is, larger stones, which this top company is focused on. Perhaps their technology is not yet capable of producing larger diamonds. For fear they’d be polished into jewelry diamonds, De Beers’ tech unit was not allowed to grow diamonds thicker than 2mm for many years. Much of this top company that sells lab grown diamonds direct itellectual property is in how to grow >2mm thick diamonds for >1ct diamonds. De Beers has a lot of catching up to do technologically.
Growing large diamonds is a lot more difficult to accomplish as far as technology goes than producing small ones. Tools need completely different designs to work on long-cycle production and at the much higher purity and quality demanded by larger diamonds. The majority of production defects — cracking, temperature control deviations, etc. — occur as one grows diamonds thicker than 2mm. De Beers has actually little experience with creating larger lab diamonds. Their technology stagnated years ago and has now been surpassed by innovators.
The company in question has proprietary technology specifically designed for creating large, generally >10ct, even wafer sized rough diamond. There are no tools available commercially of the semiconductor grade capabilities that can compare. The entire process control system is developed for very large diamonds.
As a result, they can address the market of “uniques” — large rough that is polished into >1ct polished diamonds that are individually certified. Ever more people desire these for engagement rings and other diamond jewelry.
They also offer smaller stones, which come effectively “for free” from the larger rough. But less than 7% of their production value is diamonds smaller than 1ct in size; and the pricing for these smaller diamonds has long been less than $200 per carat even for mined diamonds. The unique value has long been in large uniques.
De Beers falls short in two key ways with their new product:
Failure to achieve eco-friendly status. De Beers’ production is scheduled to commence in 2020 with power predominantly coal fired, not sustainably sourced. De Beers recently killed 18,405 fish for Canadian diamonds when they drained an entire lake to access Canadian diamonds — at least it won’t be that bad for their lab diamonds. Still they are failing to achieve the full potential for lab diamonds in the way they choose to operate — eco-friendly status. That’s a big marketing differentiator.
Failure to certify uniques. De Beers’ failure to certify each unique lab diamond will only limit the appeal of their diamonds. Everyone else will surely keep uniquely certifying their diamonds. It is a basic truth that each diamond created aboveground grows with unique inclusions and defects just like any diamond created inside Earth. In fact, each lab diamond is so easily determined as unique that one of the leading gemological institutes (GCAL) even certifies a unique “gemprint” code for theft protection and legal recovery. This means if you present a diamond to them, mined or grown, they recognize it based on its unique crystal growth and defects — and can warrant the unique identity of a diamond to the authorities. So a thief may get jailed over the uniqueness of a lab diamond. He may then ponder for years in jail De Beers’ claim that lab diamonds are not unique.
De Beers Group has had a successful run, with one of the catchiest ad campaign slogans of all time “A Diamond is Forever”. Copywriter Frances Gerety came up with it late at night when she was nearly at the end of her wits trying to come up with the right line. The line has served the entire diamond industry well. The De Beers consumer brand has never been a household name and their latest campaigns don’t reflect any connection with today’s generation. The mistake they clearly make today is to anchor big-dollar marketing campaigns into demonstrably disputable attributes like trying to claim ‘real’ or ‘unique’. No matter the marketing budget, questionable truths have never supported any great marketing, and in this day and age are a harder sell than ever before.
‘Real is Rare’ made that mistake by going for ‘real’ at a time when the jewelry industry’s most respected editor Rob Bates editorializes “In Reality, Lab-Grown Diamonds Are Real Diamonds” and even the Gemological Institute of America’s (GIA’s) own director states “[created diamonds] are real diamonds”. The second attribute ‘rare’ is even more irritating given industrial miners produce 180 million carats a year versus less than 1 percent of that is produced aboveground.
The new campaign seeking to deny that grown diamonds are each unique starts out on equally poor footing. It’s just not true.
As for the more aspirational attribute ‘forever’, it’s hard to see why one and the same material would be forever here but not there. Diamond forms in Earth within hours actually (violently during eruption) while aboveground production takes hundreds of hours. The atoms of aboveground diamonds are as old as the universe. So why is one forever but not the other? Even then, people know that nothing is forever. The percentage of couples who do not cringe at the notion of forever even when getting engaged is a niche of the 1950s mindset.
“We do not disagree actually with aboveground diamonds being a distinct product than mined diamonds. In fact, we prefer it that way: Diamonds with better value and guaranteed origin that’s environmentally friendly. We expect educated consumers, as they already do today, to simply pick better quality and better value for the identical material.
The diamond industry has long managed to play on the typical first-time buyer in this market by confusing people with complicated offerings and pricing schemes. The future of the industry is clear.
We are looking forward to the next phase where diamonds produced aboveground are mainstream.”