The Rise and Fall of The Lab Grown Diamond

In recent years, the phenomenon of lab-grown diamonds has indeed captured the imagination of consumers and the attention of the jewellry industry.

Once hailed as a more accessible and environmentally friendly alternative to natural diamonds, their narrative has undergone a notable shift. This transformation in sentiment is marked by a closer examination of their sustainability and environmental impact.

Approximately five years ago, lab-grown diamonds entered the market, boasting prices approximately 20% lower than their natural counterparts. However, the landscape has dramatically altered since then, with the discount soaring to an astonishing 80% today. This sharp decline can be attributed to retailers continually slashing prices and the reduction of manufacturing costs, precipitating a substantial drop in wholesale prices within a remarkably short span.

Forecasts from industry analysts paint a picture of a declining trend in the popularity of lab-grown diamonds. Predictions suggest a resurgence of interest in natural diamonds in the upcoming year, prompting many jewellers to reconsider their inventory strategies and potentially opt out of stocking lab-grown diamonds altogether, favoring consignment acquisitions instead.

The fervent enthusiasm that once surrounded lab-grown diamonds, reaching its zenith in 2018, is evidently waning. While lower-priced retailers aggressively promote lab-grown stones, signaling a broader acceptance, this is coupled with an anticipation of further price declines. The trajectory observed in 2023, where prices dropped by around 20%, serves as a harbinger for what may lie ahead.

Intriguingly, some experts speculate an even more pronounced decline, with prices potentially plummeting by another 50% to 80% as the initial hype surrounding lab-grown gems dissipates. Amidst this market recalibration, the enduring allure of natural diamonds is reaffirmed, echoing the sentiment that "Only real is rare."

Initially celebrated for their affordability and near-indistinguishable appearance from natural diamonds, lab-grown diamonds are now grappling with diminishing allure as they become increasingly commonplace. Their market share, once negligible in 2015, has surged to around 20% of the total diamond market, indicating a notable shift in consumer preferences.

Despite a recent surge in sales, evidenced by a 51% increase in lab-grown diamond jewellry purchases, prices have steadily declined since their introduction. The once modest 10% discount compared to natural diamonds has now ballooned to an astounding 90%, largely attributed to the proliferation of larger lab-grown diamonds, once considered rare but now ubiquitous.

The evolving perception of lab-grown stones as a distinct entity catering to a lower-priced market segment underscores a changing narrative. While demand for lab-grown stones is expected to persist, albeit at a decelerated pace, sales growth is projected to plateau to single-digit percentages in the ensuing year.

For consumers who have invested in lab-grown diamonds, challenges may lie ahead. Pawn shops are inclined to offer only a fraction of the original purchase price, particularly for larger synthetic diamonds. Some couples have even opted to replace lab-grown stones with smaller, natural diamonds after several years of marriage.

In conclusion, the meteoric rise of lab-grown diamonds appears to have reached its pinnacle. As the jewellry industry pivots its focus back to natural diamonds, the future of lab-grown gems appears rooted in a niche market catering to those who prioritize affordability over rarity and authenticity.

Interestingly, this narrative finds resonance in a historical parallel dating back to 1973 with the surge in popularity of cubic zirconia. Much like lab-grown diamonds, cubic zirconia initially captivated consumers with its comparable sparkle at a fraction of the cost. However, over time, saturation in the market led consumers to reevaluate their preferences, gravitating once again towards the authenticity and rarity of natural diamonds. This cyclical pattern underscores the transient nature of consumer trends within the jewellry industry, where alternative gems experience a surge in popularity before eventually finding their place in niche markets.

Here at Fogal and Barnes Fine Jewellers of Harrogate, we pride ourselves on offering only natural diamonds, ethically sourced to ensure our customers receive the genuine and timeless beauty they seek.