De Beers is repositioning natural diamonds to capitalize on a consumer preference for authentic products over artificial ones, a strategy aimed at revitalizing demand amidst competition from lab-grown stones, subdued Chinese luxury demand, and the ongoing sale process of its owner, Anglo American. CEO Al Cook believes consumers are increasingly gravitating towards genuine and natural items across various sectors, from food to art, and aims to leverage this trend to boost demand for natural diamonds. This approach comes after a period where De Beers acknowledges it underspent on advertising, which had noticeable negative effects on consumer perception.
The natural diamond industry has faced significant challenges. Between 2015 and 2025, the natural diamond market experienced a 16% drop in volume, from 128 million carats to 107 million carats, and a 33% decline in value, from $15.6 billion to $9.5 billion. In contrast, synthetic diamond production surged 170-fold, reaching 34 million carats, with its total value increasing from $170 million to $3.4 billion during the same period. The market for natural diamonds has been further impacted by factors such as the cost of living crisis, tariffs in the US, China's property crisis and declining marriage rates, geopolitical instability, and soaring gold prices.
Despite these challenges, De Beers observes encouraging signs, particularly in the US, its primary market, where natural diamond jewelry sales have resumed growth in the first half of the year. Data from analytics company Tenoris indicates that in the US, lab-grown diamonds constituted 25% of the volume and 18% of the value of diamond jewelry sold between January and May this year. For engagement rings, lab-grown diamonds accounted for 57% of units and 30% of value during the same period, a substantial increase from 10% and 9% respectively in 2020. The average retail price of a one-carat round lab-grown diamond decreased by 79% to $768 between January 2020 and May 2026, while a comparable natural diamond saw a 24% dip to $4,553. Marketing efforts, such as the 2024 return to global category marketing and the Desert Diamonds campaign, are underway to reignite consumer interest. De Beers believes its traditional slogan, "A Diamond is Forever," resonates with a new generation seeking permanence in a fast-paced world, representing an aspirational ideal of genuine connection.
Industry experts also note a price recovery for natural diamonds since August, with a natural diamond index rising 4% over the past six months, while the synthetic diamond equivalent fell 7%. Tighter supply, including mine closures, is contributing more to this recovery than increased demand. Analysts anticipate wealthier consumers will continue to opt for larger natural stones, while the lower end of the market will largely be dominated by smaller lab-grown gems. The US jewelry retail market is bifurcating, with items priced at $2,500 and above seeing increased demand for natural diamonds, suggesting a shift towards a luxury market for natural diamonds, with lab-grown likely capturing other segments. Millennials, representing 32% of US natural diamond consumers, account for 55% of demand value, and Gen Z is the second-largest group of buyers, making targeted marketing through new channels crucial.
