2021 was one of the most successful years for the world’s largest diamond maker, DeBeers, whose revenues reached $5.6 billion from $3.4 billion in 2020. Sales of rough diamonds reached $4.9 billion (compared to $2.8 billion in 2020). The year also saw 35% growth in the company’s branded jewelry business, which includes DeBeers Jewelers and De Beers Forevermark. “In 2021, demand levels were higher than before the crisis (Covid-19 pandemic). When you think about the scale of the crisis, it’s a remarkable rebound,” says Marc Jacheet, CEO of De Beers Brands, in a press release. interview with Fortune India.
While the diamond industry’s post-lockdown recovery is certainly tied to consumers’ rising disposable income as their spending on travel and other overseas activities has taken a hit, Jacheet thinks that’s the resilience of the entire industry value chain which has led to the upsurge in consumer demand. “The pandemic has forced the industry to focus much more. Resilience throughout the chain – from government partners to venue owners and retailers, their resilience to adapt, to try, to course-correct quickly and agility has been incredibly rich. In many countries, the only link with the end customer was digital and our people adapted in record time,” says Jacheet. “They responded to ambiguity with agility, their response to complexity was focus and their response to volatility was to make firm decisions to overcome difficulties and be a captain in rough seas.”
Diamonds in a VUCA world
However, with life back to normal and travel opening up, will 2022 be as successful as the past year? Jacheet says VUCA (volatility, uncertainty, complexity, ambiguity) is a way of life today. “The truth is that it is difficult to predict what the future will be, given the context in which we operate. The level of uncertainty is enormous…it started with the pandemic and now it is the events in Ukraine. This has created a double effect on the industry – disruption and destabilization of the global balance and tension on raw materials, slowing economies, reviving inflation and to fight inflation rising interest rates, contraction wealth that could lead to potential risks The war has impacted the diamond industry, but the natural diamond industry has been incredibly resilient.
Jacheet’s optimism also comes from the emotional value a diamond carries. “It’s not the first time we’ve faced a crisis. There will always be men who fall in love with women, there will always be women who turn 40 or give birth, there will always be achievements in the life you want to mark. There is a need in every human being to be believed, to belong and to be loved.”
Business with a purpose
To do business in a VUCA environment, “purpose” becomes crucial, says Jacheet. “We tell our teams to never forget who we are and where we come from. Natural diamonds are absolute wonders and miracles of nature, they were created two billion years ago or more in extremely rare conditions today.Two billion years later they are unearthed and they are sold.The way we process is unique, each rough diamond is unique and valuable.Therefore, it is important to know what we are doing and why. Our goal is to bring joy to the world through our exceptional products. , exceptional seriousness and preciousness. You must move people with a sense of purpose and the why of the company, that is what I do every day.”
The diamond industry is rather infamous for its lackluster employee practices in the mines. The De Beers boss says their mine-level HR practices are impeccable. “When we started operations in Botswana, people were suffering. There was only 3 km of road, AIDS everywhere. Today there are 3,000 km of road, thousands of little girls go to school. schools and hospitals everywhere. We are sailing towards carbon neutrality by 2030. This is far from the image that is perceived.
“We have a responsibility to the world and secondly, what we do, we do exceptionally well, with a huge sense of ethics,” he adds.
To change the mentalities
Consumers also demand purpose. They ask tough questions about whether the diamond they are buying has been mined sustainably, whether the people working in the mines are being treated ethically. There is also a lot of debate around conflict-free diamonds. “These are not hard questions, they are legitimate questions,” says Jacheet.
The next generation values the purpose in addition to the value of the diamond. “Value is the intrinsic value found in a stone, values are the impact it has. The perception of status is changing, it does not come from vanity but from generosity. We are witnessing a generation much more caring, giving, and caring. It’s not just millennials and Gen-Xers, but their mothers are also purpose-driven. They listen to their young children. We’re seeing more appetite to know where they’re coming from. diamonds because if you care about quality, you want to know where they come from, so provenance is the first sign of quality.”
DeBeers’ operations, says Jacheet, are absolutely transparent and audited. “We have the best ethical practices you can imagine. Safety is a top priority at our mines. The amount of technology investment is high tech. For example, the diamond recovery vessel we have in Namibia, 95% of the people on board this boat are engineers of the highest caliber.”
With conversations about purpose and sustainability taking center stage, there is considerable consumer attraction to lab-grown diamonds and brands around the world are offering jewelry collections made from lab-grown diamonds (which represents nearly 3/4 of the price of a natural diamond). diamond). De Beers itself owns a lab-grown diamond vertical, Lightbox. Jacheet says that while there is a market for both lab-grown and natural diamonds, he disagrees that lab-grown diamonds are more durable. “Over 80% of lab-grown diamonds are produced from non-renewable energy, these have a higher carbon footprint than natural diamonds.”
He goes on to compare the carbon dioxide used in the polishing of natural diamonds with the carbon dioxide emitted by an airplane flying between Mumbai and New York. “You need about 150 kg of carbon dioxide per carat to polish a natural diamond, whereas a Mumbai-New York plane will consume a ton of carbon dioxide. You can polish 6 carats of diamond for the price of one Mumbai-New York leak,” argues Jacheet.