Welcome to episode four of The Diamond Dudes. In this discussion, hosts Rob Bates (founder and editor of the Jewelry Wire), Avi Krawitz (founder of the Diamond Press), and Edahn Golan (partner in Tenoris and independent analyst) unpack the most pressing dynamics hitting the global diamond trade. From shifting contract criteria in Botswana to unexpected consumer trends driven by pop culture, the industry is witnessing a recalibration across both natural and lab-grown sectors.
Here is a comprehensive breakdown of the major talking points, debates, and market realities facing the trade today.
De Beers’ Latest Sight, Pricing Adjustments, and Sightholder Changes
The latest De Beers sight sparked immediate conversation across the industry, following a Bloomberg report highlighting heavy discounts and an overall downward adjustment in pricing. While the overarching trend points to De Beers lowering prices to match a slower market, the reality on the ground appears more nuanced.
The Nature of the Price Corrections
Edahn Golan clarifies that these adjustments are standard price corrections. They occur when De Beers realizes its pricing has fallen out of alignment with current market realities, responding to a combination of broader economic pressures and direct client feedback. According to Edahn, individual price movements were mixed, some lines went up while others went down, meaning the price changes themselves were not entirely dramatic.
However, the hosts hold differing views on what these price drops signify:
- Market Uptick vs. Market Alignment: Avi Krawitz questions whether the pricing adjustments should be interpreted as a sign of structural improvement. Historically, De Beers holds off on adjusting prices during weak market phases, typically making moves only when they want to stimulate the rough market or when they perceive an opportunity to offload rough inventory. Avi suggests this could indicate that polished inventories have been depleted, prompting a potential uptick in polished sales that warrants a response.
- Competitive Pressures: Rob Bates presents an alternative view, suggesting that De Beers is modifying prices to remain competitive against lab-grown diamonds, aiming to either reclaim market share or force synthetic prices down further.
- The Counter-Argument: Both Edahn and Avi push back against the lab-grown connection. Avi notes that rough price reductions are intended strictly to align with the natural polished market, not to compete with synthetics. Edahn firmly agrees, stating that pricing today has nothing to do with lab-grown diamonds, which exist in a separate market entirely. Instead, producers are focusing purely on maximizing income based on changing consumer demand across primary global hubs like China, India, the United States, and Japan.
The Sightholder Cuts: A Strategic Shockwave
While price fluctuations are standard, the true shockwave of this sight was the official implementation of De Beers’ new contract. De Beers had previously avoided introducing a new contract for years, repeatedly extending the old one due to COVID-19 and ongoing market instability.
The new contract brought a dramatic reduction in the Sightholder list. While one new Sightholder was added, a considerable number of long-standing, highly regarded companies were not renewed.
The hosts view this contraction through different lenses:
- The Ethical and Operational Dilemma: Rob expresses confusion over the elimination of well-regarded, honest companies that have historically demonstrated an ability to buy and distribute goods efficiently. He questions the logic of dropping stable, decent partners when many larger operations have historically run into major financial or operational crises. While acknowledging that dropping Sightholders every five years saves money and consolidates less available supply, Rob emphasizes the importance of retaining reliable people in the industry.
- The Efficiency and Supply Reality: Edahn offers a supply-driven explanation. When a producer’s total supply is actively shrinking, it becomes impractical to dilute allocations into small, $2 million-a-year contracts. Instead, it makes structural sense to allocate goods to larger, highly efficient operations. De Beers continuously monitors client metrics, including manufacturing yield, pricing efficiency, and inventory turnover speed, giving a natural advantage to the most efficient firms.
The Botswana Factor and Declining Allocations
Avi points out that the Sightholder cuts are directly tied to De Beers’ long-term supply realities, notably the landmark De Beers-Botswana agreement. Under this arrangement, the government’s share of Debswana’s production (a 50/50 joint venture between De Beers and Botswana) will progressively shift away from De Beers to the state-owned Okavango Diamond Company (ODC). ODC’s allocation will rise to 40% by the end of the current five-year contract and ultimately reach 50% over the next decade.
With massive chunks of volume exiting De Beers’ allocation, combined with the impending closure of mines in Canada and a long-term transition at Venetia, De Beers’ available rough pool is shrinking rapidly. The company’s future mining footprint is poised to become heavily centralized in Botswana and Namibia, necessitating a leaner distribution network.
What Falling Global Diamond Production Below 100 Million Carats Means
Recent data published by Kimberley Process (KP) revealed a historic milestone: global diamond production has officially fallen below 100 million carats for the first time since KP began tracking and publishing data in 2004.
KP Historical Production Benchmarks:
- 2004 (KP Inception): 159 Million Carats
- 2020 (Previous Low): 107 Million Carats
- Latest Figures: Under 100 Million Carats
Structural Realities vs. Historic Forecasts
For decades, the diamond industry relied on supply-and-demand charts projecting a looming drop in supply alongside a steady rise in demand, which was supposed to drive prices up. Rob and Edahn reflect on how those classic charts proved incorrect regarding both actual supply timelines and consumer demand realities. Edahn notes that the predicted production decline was perpetually forecasted as being “five years away,” but the sub-100 million carat threshold confirms that the contraction has finally arrived.
Despite the drop in volume, the KP data showed a 5.7% increase in the average price per carat. Edahn notes that these official numbers reflect export values, meaning De Beers’ exports align with their sales values, though countries like Namibia, Angola, and Russia operate on entirely different pricing levels.
Country-Specific Anomalies
The production landscape features several notable country-level dynamics:
- Angola: Angola has emerged as an incredibly strong global player, though it acted as a market wild card by releasing massive quantities of lower-cost goods into the market. Avi notes that Angola operates under distinct institutional rules; they are sensitive to the economic and community needs of the populations relying on mining production, which influences their volume decisions.
- Russia: Russia continues to sell significant volumes into the global market. Edahn highlights that the world’s largest known remaining diamond resources sit in Russia, with Alrosa historically claiming an underground reserve of an additional one billion carats. Even if those estimates are over-reported by 20% to 25%, the sheer volume suggests that as African deposits deplete over the next 20 to 30 years, global mining could shift toward Russian dominance.
The hosts agree that sub-100 million carats represents the new normal. Barring the discovery and a lengthy 20-to-25-year development of a major third mine in Angola, global natural supply will continue its downward trajectory.
Natural vs. Lab-Grown Diamonds: Retail Economics and Market Positioning
The relationship between natural and lab-grown diamonds (LGD) remains one of the most heavily debated topics in modern jewelry retail.
The Symbiotic Dependence
Avi introduces a foundational premise: the lab-grown industry fundamentally requires a sustained, healthy natural diamond industry to survive. Since its inception, the synthetic sector has piggybacked entirely on the messaging, marketing, and romance built by the natural diamond trade.
Rob strongly echoes this point, expressing disappointment that lab-grown marketing has failed to innovate over the last decade. Despite ongoing warnings from regulators and industry bodies, LGD marketing continues to rely strictly on repetitive “eco-friendly” narratives rather than developing distinct, exciting product positioning that harnesses the unique capabilities of tech-grown gems.
The Brutal Math of Retail Margins
Edahn provides a sobering breakdown of the macroeconomic data separating the two sectors at the retail counter:
| Metric | Lab-Grown Diamonds | Natural Diamonds |
| Average Engagement Ring Price | $2,000 – $3,000 | Over $7,000 |
| Wholesale Price Trajectory | Down over 96% | Historically stable by comparison |
| Retail Price Trajectory | Down over 50% | Aligned with luxury benchmarks |
| Inventory Turnover Speed | Rapid turnover | Slow (averages ~2 years in case) |
While independent retailers initially flocked to lab-grown diamonds due to high percentage margins and fast turnover, the collapsing absolute dollar value is creating a sustainable business crisis. Rob and Edahn note that gross margin dollars for lab-grown goods are shrinking. A retailer cannot sustain a specialty storefront, let alone sell prestigious watch brands like Rolex or Patek Philippe, if their bridal business model shifts from a historical $3,400 benchmark down to a low-cost $2,000 or $2,500 operation.
The Consumer Psychology Trap
Edahn warns that the collapsing value of lab-grown jewelry poses a psychological risk to retail brands. If a consumer purchases a lab-grown ring for $3,000 and returns a few years later to see the exact same item retailing for 30% less, it damages their perception of the store’s prestige. True luxury brands like Cartier or Tiffany & Co. never allow their product lines to devalue in this manner.
Furthermore, the rapid descent of retail prices has exposed early adopters to extreme depreciation. While the average consumer buys lower-priced synthetic items, Edahn reveals he knows of an individual who spent $200,000 on a high-end lab-grown jewelry piece, an asset whose secondary market value has effectively dropped to zero.
Cultural Implications on the Engagement Tradition
This price collapse has upended decades of stable cultural norms. For generations, the average price of an American engagement ring remained remarkably steady between $3,200 and $3,400, adapting naturally to wages and inflation. This financial boundary was backed by the historical marketing of spending a two-to-three-month salary.
By tumbling straight through this historic pricing floor, lab-grown diamonds change the social dynamics of bridal shopping. Edahn poses a critical question about the social significance of the engagement ring: if an engagement ring no longer carries a significant financial sacrifice, does it signal to the partner that the buyer is being cheap? If the traditional concept of a “dowry” or significant financial commitment is entirely removed, the long-term cultural necessity of a diamond engagement ring could face an existential threat.
Gender Dynamics in the Showroom
Avi shares an insightful counter-perspective from a previous interview with an independent retailer who operates two distinct storefronts, one dedicated exclusively to lab-grown and the other to natural diamonds. The retailer observed clear behavioral differences between the two consumer bases:
- The Lab-Grown Showroom (Female-Driven): Lab-grown purchases are heavily driven by the female consumer. Couples typically shop together, with the woman actively directing the choice toward a lab-grown stone. Because it is a collaborative, practical financial decision focused on maximizing size for cost, the traditional stigma of the partner being “cheap” is entirely removed from the equation.
- The Natural Showroom (Traditional Male Hero): The natural diamond showroom maintains traditional bridal choreography. At a certain point in the sales process, the woman intentionally steps back, allowing the partner to step forward as the “male hero” to independently take on the financial sacrifice and purchase the natural gem.
Can De Beers Become a Luxury Brand?
As rough production inevitably declines, the question of De Beers’ long-term corporate identity becomes critical. Avi envisions De Beers transitioning into a three-pillar corporation over the next 20 years:
- A consolidated mining and rough diamond business.
- A synthetic technology play heavily anchored in Element Six’s quantum and high-tech applications.
- A premium retail and luxury branding business.
The Envisioned 20-Year De Beers Model:
- Core Mining & Rough (Centralized in Botswana/Namibia)
- Element Six Technology (Quantum & Synthetics)
- Luxury Retail & Consumer Branding
The Retail Failure and the “London” Debate
Rob points out that De Beers has tried to establish a profitable retail footprint for over twenty years without success. Edahn goes further, labeling the retail operation a massive financial drain that has lost over $1 billion across its history.
The hosts analyze several critical missteps in De Beers’ retail history:
- The Brand Identity Crisis: Rob notes that when a consumer seeks top-tier luxury, names like Cartier and Tiffany & Co. carry clear, distinct emotional meaning. De Beers, conversely, has struggled for two decades to define what its retail brand actually stands for. For older generations, the name is historically tied to monopolies or blood diamonds; for younger consumers, it often projects an image of a generic corporation.
- The Rebranding Flop: Avi criticizes De Beers’ decision to rename its retail division “De Beers London,” arguing that appending the city name diminishes the global weight of the core De Beers brand. Rob notes the corporate logic was likely to mimic heritage houses tied to specific luxury centers (like Tiffany New York or Cartier Paris), but Avi maintains it was a mistake.
- Design Failures: Edahn points out that for years, the retail stores’ top-performing item was a simple solitaire ring, a product consumers can buy anywhere. The stores lacked a unique design language to differentiate themselves. An early attempt to launch an avant-garde, “Africana-themed” flagship store on London’s Old Bond Street featured heavy involvement from supermodel Iman, but it failed to resonate with consumers and was eventually abandoned.
- The LVMH Partnership: De Beers previously formed a 50/50 retail joint venture with luxury conglomerate LVMH. Despite LVMH’s unparalleled retail expertise, the venture stalled, and LVMH eventually sold its stake back after walking away from a $200 million investment. Avi notes that the partnership was fundamentally conflicted, as LVMH had little long-term incentive to aggressively promote a retail brand that competed directly with its other jewelry houses.
Diverging Paths Forward
The hosts disagree on what De Beers should do with its retail division:
- Edahn’s View: Retail and branding were never meant to be primary profit centers; they exist solely to support the mining side by positioning the product. If De Beers ever decides to exit retail, selling the business is difficult because the brand name is its only real asset.
- Rob’s View: De Beers needs to return to basics: focus entirely on core mining operations and revive category marketing for natural diamonds. To relieve themselves of the retail burden without cheapening the name, they should look into licensing the De Beers brand to an outside specialist excited to run the retail side.
- Avi’s View: Avi believes previous retail losses are a failure of past management rather than an indictment of the brand’s potential. The foundational association between De Beers and diamonds remains strong and skews positive for most consumers. For De Beers to achieve a sustainable 100-year legacy as mining resources deplete, leaning directly into a premium luxury brand strategy remains their most viable path forward.
Old Mine-Cut Diamonds and Changing Consumer Tastes
In a market facing headwinds, old mine-cut diamonds have emerged as a massive bright spot, fueled by pop culture and shifting consumer desires for individuality.
The Taylor Swift Effect
The ultimate testament to this trend is pop icon Taylor Swift’s engagement ring, which featured a historic old mine-cut diamond. This high-profile placement has sent ripples through consumer demand. Edahn shares retail data showing that sales of old mine-cut diamonds surged by an astonishing 500% in June, followed by a doubling in sales for Asscher cuts. The trend is so powerful that a robust market has emerged for recutting modern, generic diamond cuts back into historic old mine-cut proportions. Avi adds that the lab-grown sector has seen skyrocketing demand for vintage designs and antique cutting styles.
The Rise of “Desert Diamonds”
This desire for uniqueness also underpins the industry’s focus on alternative natural diamond categories, such as the “Desert Diamonds” campaign. This marketing push takes heavily included, flawed, or brown diamonds, goods traditionally dismissed by the trade, and reframes their structural flaws as unique, storied features that make them entirely one-of-a-kind.
Rob observes that this approach successfully targets middle-market consumers caught in a financial squeeze. Outside the ultra-wealthy elite, everyday consumers face high gas prices and an uncertain economic future shaped by technological disruptions like AI. Confronted with a choice between a large, mass-produced lab-grown stone or a generic natural diamond, many consumers find the story of an affordable, highly unique, included natural diamond compelling.
What’s Next for the Industry
As the conversation wraps up, the hosts look ahead to upcoming developments shaping the next few months:
- The World Diamond Congress in Singapore: Rob will be attending and moderating panels at the upcoming World Federation of Diamond Bourses (WFDB) and International Diamond Manufacturers Association (IDMA) gatherings. The conference will focus heavily on arbitration frameworks, trading support, and category marketing. The hosts agree that with the natural market swimming against tough economic currents, the entire value chain must remain laser-focused on reviving consumer demand.
- A Looming Wholesale Shift: Edahn previews his upcoming quarterly wholesale lab-grown price list, which contains an unexpected anomaly. For the first time in LGD history, where prices have traditionally plunged despite rising demand, a specific category is experiencing a notable price increase: one-carat round brilliant synthetic stones. While consumer demand has shifted toward larger four- and five-carat stones, leaving the one-carat range stagnant, wholesale prices for these smaller stones are rising. The trade will be watching closely to see how this counterintuitive dynamic plays out across other size ranges.
- A September Surprise: The Diamond Dudes close the episode by teasing a major, unannounced joint project scheduled to debut in September, keeping the details under wraps for now.
Where to Watch and Listen
You can stay up to date with every episode of The Diamond Dudes. Catch the latest insights, market debates, and full episodes through the following platforms:
- Watch on YouTube: Episode 4 is available here. Full video episodes are available on my YouTube channel.
- Listen on Your Favorite Podcast Platforms: Stream or download the audio episodes on major podcast networks, including Spotify and Apple Podcasts.
- More platforms: Our RSS and other links.
- Connect and Submit Questions: Have questions or feedback for the hosts? You can reach the team directly or inquire about advertising opportunities by emailing DiamondDudesPodcast@gmail.com.
For more independent research and written analysis from the hosts, visit their official websites:
- Rob Bates: The Jewelry Wire
- Avi Krawitz: The Diamond Press
- Edahn Golan: Edahn Golan Diamond Research & Data and Tenoris
