Browse Articles by Category
How Lab Grown Diamonds Can Help Shorten and Diversify Your Supply Chain
In a time of labor shortages, shipping delays, and high fuel costs, supply chain issues can harm your bottom line. Long supply chains are an inexorable part of the jewelry industry—you can’t move the mine closer to consumers. But for diamond retailers and suppliers, there is an alternative. Working with a manufacturer or supplier of lab-grown diamonds located closer to you can help ease the problems brought on by long supply chains, particularly when it comes to the costs of transportation. With lab-grown diamonds, you can bring the beginning of the supply chain closer to you.
Supply Chain Issues Since the Pandemic
While ports are not facing the same levels of congestion that they had to deal with last year, supply chains are still plagued by many of the same issues that have been causing problems since the pandemic. Continued COVID outbreaks, geopolitical turmoil, and an uncertain economic outlook all continue to threaten the stability of global supply chains. For these reasons, businesses at all levels of the supply chain have been looking to diversify.
These same issues have affected the diamond industry, but it has also faced its own challenges. Sanctions on Russian diamonds following the nation’s invasion of Ukraine have compounded these problems. Russian mining company Alrosa supplies nearly 30% of the world’s rough diamonds, and the resulting shortages have already led to higher diamond prices.
Diversifying Your Supply Chain
That need to diversify extends to the diamond sector, both mined and lab-grown. As of 2020, China was the world’s leading manufacturer of lab-grown diamonds, producing 3 million carats that year. India produced half that amount in 2020, and the US one-third. While the US lags behind China and India in LGD production, the advantage of lab-grown diamonds is that their production isn’t limited by the whims of geology. There are producers of LGD in the US, and they can help you shorten your supply chain.
While the location of diamond mines necessitates a long, complex, and expensive supply chain and byzantine regulations regarding provenance and chain of custody, lab-grown diamonds can be produced anywhere. There are hundreds of growers in the United States, and while cost might be one reason to turn to manufacturers in China and India, supply chain costs and delays can negate those savings. After all, you can’t sell a product you don’t have. Having manufacturers in the US you can turn to in times of instability can be a lifesaver.
While lab-grown diamonds might not seem like a solution to mined-diamond supply chain issues, consumers are quickly coming to accept lab-grown diamonds as legitimate alternatives to mined diamonds and not as some lesser substitute. LGD have been making inroads even in the bridal category since 2019, demonstrating that many consumers, especially younger ones, feel that LGD are just as special as mined diamonds, choosing them for their most important diamond purchase. A 2019 survey found that 70% of Millennials would consider buying LGD, while a 2022 survey found that 72% of respondents were “purchasing [LGD] for themselves and as a gift for others.” While they’re not for everybody, they are an option many consumers would consider.
Shorter Supply Chains as a Deliberate, Sustainable Choice
Shortening the supply chain doesn’t have to just be a compromise. It can be a selling point for today’s environmentally conscious consumer. Millennial and Gen Z consumers are beginning to prefer lab-grown diamonds for ethical and environmental reasons. Shortening the supply chain might be an economic necessity, but it is also marketable to socially conscious consumers.
One of the lessons of the pandemic is the necessity of being flexible in your choice of suppliers. For retailers, diversifying suppliers can help ameliorate shortages and high shipping costs. And for suppliers, having local manufacturers they can rely on will help ease the burden of shortages and other delays.