The natural diamond industry is finally confronting a question it perhaps should have asked much earlier: Did it underestimate the speed, scale and nature of the laboratory-grown diamond (LGD) revolution?

For years, laboratory-grown diamonds (LGDs) were treated by much of the natural diamond industry as a niche product—an inexpensive alternative with limited appeal to serious jewellery consumers. The assumption was that the emotional value, rarity and geological origin of natural diamonds would ultimately prevail.

That assumption now looks increasingly questionable. Laboratory-grown diamonds have moved from the fringes of the jewellery business into the mainstream. Their prices have fallen dramatically, retailers have embraced them, consumers have become more familiar with them, and younger buyers increasingly view them as a legitimate choice rather than an imitation.

The most striking admission came recently from Anglo American CEO Duncan Wanblad, who said that, with hindsight, De Beers and the wider diamond industry should have reacted more aggressively to the signals coming from laboratory-grown diamonds. He acknowledged that the natural diamond industry had underestimated their impact and had expected the traditional diamond market to recover much more quickly from its downturn.

The issue is not simply whether laboratory-grown diamonds are taking market share from natural diamonds. The bigger question is whether the industry misunderstood what was changing in the consumer’s mind.

The biggest advantage of lab-grown diamonds has been price. Their wholesale prices have fallen dramatically, allowing consumers to purchase significantly larger stones for the same budget. This has not merely created a competing product; it has changed consumer expectations. A buyer who can purchase a three-carat lab-grown diamond for the price of a much smaller natural diamond may begin to question why the natural stone commands such a premium.

For retailers too, lab-grown diamonds offered an attractive proposition: affordability, larger sizes and a product that could appeal to a new generation of buyers. As more retailers embraced the category, consumer awareness increased—and the market gathered momentum.

Traceability may prove to be one of the natural diamond industry’s strongest answers to laboratory-grown competition. Consumers increasingly want to know where products come from. De Beers, for example, has been expanding its Tracr blockchain-based traceability platform, while its ORIGIN De Beers Group offering seeks to differentiate responsibly sourced natural diamonds at retail.

The industry should go much further.

Imagine a consumer buying a natural diamond and being able to scan a code and discover:

• where the diamond was mined;
• its journey through the supply chain;
• how it was cut and polished;
• the communities benefiting from diamond revenues;
• environmental and social standards associated with its origin;
• and the people who transformed the rough stone into the finished jewel.

That is a story laboratory-grown diamonds cannot replicate. The natural diamond industry’s advantage is not merely that its diamonds are “natural.” Its advantage is the entire journey of the natural diamond.

There is another issue that cannot be ignored: consumer perceptions of investment value. For years, diamond marketing often created an impression that diamonds were stores of value or assets that would naturally appreciate.

The experience of the past few years has complicated that proposition. If the industry wants to rebuild trust, it should avoid exaggerated claims. A natural diamond should be presented primarily as a luxury product with emotional, cultural and rarity value—not as a guaranteed financial investment.

This distinction is essential. Consumers today are more informed than ever. If marketing promises something the resale market does not deliver, trust suffers.

The consumer has changed:

The natural diamond industry’s bigger challenge may not be laboratory-grown technology itself, but changing consumer attitudes. Today’s younger buyers are more price-conscious, digitally informed and willing to question traditional luxury conventions. They want to know not only what they are buying, but also why it is worth the price.

The traditional argument that a natural diamond is “real” is no longer sufficient. Laboratory-grown diamonds are diamonds in their physical and chemical characteristics; the fundamental distinction is their origin. The natural diamond industry therefore needs to explain why natural origin matters rather than simply telling consumers what laboratory-grown diamonds are not.

Natural diamonds still have powerful advantages:

The situation is certainly not one-sided. Recent consumer research continues to show strong demand for natural diamonds. De Beers’ 2026 US research found that natural diamonds remained the most desired luxury jewellery product, while Gen Z accounted for 23% of natural diamond demand value.

This demonstrates that younger consumers are not necessarily rejecting natural diamonds. They simply need a stronger reason to choose them. That reason can be found in the qualities that laboratory-grown diamonds cannot reproduce: natural rarity, geological history, provenance and finite supply. But these qualities need to be communicated much more effectively.

The natural diamond industry should not attempt to compete with laboratory-grown diamonds on price. That would be a losing proposition. Instead, it must establish a clear distinction between the two categories.

Lab-grown diamonds offer affordability, size and technological innovation. Natural diamonds offer rarity, natural origin, heritage and a connection with the Earth that goes back billions of years. The industry must make consumers understand that they are not simply choosing between two stones; they are choosing between two different propositions of value.

Provenance and traceability could become among the natural diamond industry’s strongest competitive advantages. Consumers increasingly want to know where luxury products come from. The ability to demonstrate a natural diamond’s origin, journey through the supply chain and positive contribution to producing communities can add a powerful dimension to its value. The industry’s future marketing therefore needs to move beyond the traditional emotional message and embrace origin, responsibility and transparency.

Did the industry react too late?

In hindsight, the answer appears to be yes. The industry recognised laboratory-grown diamonds but underestimated how quickly technology, falling prices, retailer acceptance and changing consumer attitudes would combine to create a serious competitive force.

The natural diamond industry still possesses a product with an extraordinary story—formed naturally over billions of years, finite in supply and deeply embedded in global culture and tradition. The challenge is to tell that story in a way that resonates with today’s consumer.

The way forward:

The industry now needs to move from defending natural diamonds to celebrating what makes them different. It must invest in consumer education, strengthen marketing, embrace younger buyers, promote traceability and build a modern narrative around natural rarity and provenance.

The future is unlikely to be a simple case of laboratory-grown diamonds replacing natural diamonds. More likely, the market will develop into two distinct segments, with lab-grown diamonds competing strongly on affordability and size, while natural diamonds occupy the premium space based on rarity, origin and emotional value. The industry’s biggest mistake may have been taking the consumer’s preference for natural diamonds for granted.

Its biggest opportunity now is to earn that preference again.

NOTE: gems2jewellery.com initiates debate on this issue. Leaders of the industry are invited to share their opinions on suresh@gems2jewellery.com. Their esteemed opinions with their names and designations will be published on this website.