Editor’s Note
This article examines how De Beers historically consolidated production and distribution to control diamond supply, a strategy that stabilized prices in a once-volatile market.
Looking back at history, in the late 19th century, the global diamond market was fragmented and volatile. Diamond production from different mining regions was unpredictable, leading to sharp price fluctuations and inconsistent quality. De Beers implemented a new model, consolidating diamond production from various mines and coordinating the distribution channels uniformly. It then strategically released diamonds into the market to maintain long-term price stability. This model formed the cornerstone of De Beers’ future diamond pricing system, which was widely recognized for bringing order to a turbulent market.
However, market control alone was not enough to establish diamonds as a global status symbol. In 1947, De Beers launched the now-famous slogan “A Diamond is Forever,” marking a turning point for the industry. This marketing move had a profound, industry-disrupting impact: diamonds became the preferred choice for engagement rings.
As times changed, the diamond market continued to evolve. Competitors emerged, consumer demands shifted, and the global market began demanding higher standards for compliance and transparency in diamond mining.
The subsequent major industry transformation stemmed from technological breakthroughs. The emergence of lab-grown diamonds provided consumers with a new choice—these diamonds are more affordable and visually very similar to natural diamonds. The Boston Consulting Group estimates that the production of lab-grown diamonds has increased tenfold within six years.