Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The judges of the Goldsmiths’ Craft and Design Council Graff jewellery award were in for a shock when they selected the Atelier Asymmetric Bow suite of jewels as their 2019 winner. The prize was withdrawn after they discovered the diamonds used had not been mined, but “cultured” in a laboratory, and sourced by Lark & Berry, a newly launched luxury jewellery design company based in London, which had commissioned the piece.
Lark & Berry’s founder is Laura Chavez, a Mexican who took a history of jewellery course at the London Jewellery School, in 2017, while studying for her MBA. She resolved to challenge the industry and “do things differently” after learning that lab-grown diamonds could provide a way around the extensive conflict and human rights concerns caused by gem mining.
Chavez knew she would face consumer resistance, hostility from the traditional jewellery industry, and the threat of competitors. At first, she was motivated primarily by a concern for human rights. “I remember the movie Blood Diamond coming out and people really becoming aware of how diamonds were sourced, and the things that were done to the communities — kids losing arms and things like that,” she says. “That was horrible.”
Companies often exploit employees who work in diamond mines, paying very low wages and even using slave and child labour. In India, an estimated 20 per cent of diamond miners are children. In the past few decades, African nations including Sierra Leone, Liberia, Angola, the Republic of the Congo, Ivory Coast, the Central African Republic and the Democratic Republic of Congo, have endured violent conflicts fuelled by demand for diamonds.
For Chavez, there were also important environmental concerns. The four major kinds of diamond mining — open-pit, underground, alluvial and marine — all have harmful impacts. These include soil erosion, which contributes to deforestation, as well as deleterious effects on water resources, air quality, wildlife, soil quality and direct CO₂ emissions. The clearance of forests and vegetation has also reduced CO₂ uptake.
The cultured alternative
Lab-grown diamonds, like mined ones, also consume large amounts of energy in their production. A 2010 study found that Florida-based Gemesis used 20kW of energy to create each carat of synthetic stone, producing about 11.8kg of CO₂ emissions. However, the Canadian Ekati diamond mine — which is widely recognised for its emissions reductions — created more than five times more: 64.8kg of CO₂ emissions per carat mined.
As lab-grown diamonds became less expensive to make, Chavez noticed that increasing numbers of customers began to express concern over sustainability. “We needed to remind customers — or inform [those] who weren’t aware — that cultured diamonds and stones are the only gemstones that can be sustainable for the planet,” she says.
She focused on educating the marketplace by using trusted sources in the media to boost the credibility of her message. She also staged events that attracted the world’s fashion press, gaining endorsements from supermodels and celebrities.
Lark & Berry became the first brand in the world to offer diamonds for engagement rings made in the UK using 100 per cent renewable energy. About two years after launching her company, Chavez had visited Skydiamond — the lab-diamond manufacturing company of British serial entrepreneur Dale Vince — and saw the potential for reducing carbon emissions in the sector. The process used at Skydiamond captures CO₂ directly from the air and produces diamonds using a renewable-energy powered electrolysis machine.
The Natural Diamond Council is made up of seven of the world’s leading diamond-mining companies, including De Beers, Alrosa and Rio Tinto. In 2016, when it was known as the Diamond Producers Association, it launched an advertising campaign targeting millennials. In a drive to enhance the appeal of “natural” stones, forged from the earth, the campaign used the slogan “Real is rare”.
But some mining companies have also began developing their own lab-grown versions. Chavez wonders if she might need to start manufacturing herself or to expand geographically — for example, establishing a physical presence in the US, one of the biggest consumers of jewellery in the world and the largest consumer market for lab-grown diamonds. That would require reflection on her brand’s sustainable and ethical positioning, and how to sell and distribute its products.
Questions for discussion:
-
As sustainability becomes a competitive imperative, is it possible for lab-grown diamonds to fully address the ethical and environmental issues associated with the traditional diamond industry? What trade-offs might persist and how should companies such as Lark & Berry address them?
-
In an industry historically shaped by exclusivity and tradition, can a brand such as Lark & Berry redefine luxury without compromising its core values? How can it foster long-term cultural change in consumer perceptions of lab-grown diamonds?
-
With falling prices for lab-grown diamonds and increasing competition from traditional players, should Lark & Berry focus on scaling operations, innovating in sustainability, or solidifying its ethical narrative? How can these priorities be balanced strategically?
Further reading in the FT:
Ioannis Ioannou is associate professor of strategy and entrepreneurship at London Business School; Nick Mickshik is a consultant case writer and editor.
This is an edited and updated version of the https://publishing.london.edu/cases/lark-berry-the-diamond-disruptors/ teaching case
