Jewelry brand Pandora launches a new collection using lab-grown diamonds (LGD). According to the brand, the decision is part of their sustainability strategy which includes the plan to ensure its operations are carbon neutral by 2025. Pandora CEO Alexander Lacik stated the LGD collection stands as a testament to the company’s ongoing and ambitious sustainability agenda and proves “Diamonds are not only forever, but for everyone.”
And it’s especially the last part of the sentence that seems to be key in the brand’s decision.
Production of lab-grown diamonds is approaching 7 million carats, marking a double-digit growth over the past two years. Production costs are coming down fast, passing on cost savings to retailers. At the moment, a polished lab-grown diamond costs roughly a third of its natural polished counterpart and the price gap is expected to grow even further as China ramps up mass production.
Pandora’s statement says they will no longer use natural diamonds, so the move begs the question how diamonds were used in Pandora’s low-threshold, low price ticket items. Last year, the company used (small) natural diamonds in about 50,000 pieces out of a total of roughly 85 million pieces of jewelry, equaling a share of not even 1%.
As LGD prices continue to drop, the price element seems to play the biggest role in Pandora’s decision to move into LGD. The brand clearly is looking to boost the production and sale of its diamond jewelry, which only fits in Pandora’s business model if cheaper LGD’s are used.
Pandora’s decision ties in perfectly with Bain & Company’s prediction that lab-grown diamonds will become accessible to broader groups of price-sensitive consumers and will migrate from the engagement and wedding ring sector into the fashion category.
In this trend of differentiation, LGD and natural diamonds are increasingly considered two different products, targeting different consumer (experiences) with different emotional and financial values attached to them.
The new Pandora collection includes rings, bangles, necklaces, and earrings, each featuring a single lab-grown diamond ranging in size from 0.15 to 1 carat, with prices starting at US$350, Pandora added.
Image Source: Pandora A/S – Pandora jewelry with lab-grown diamonds.