Thursday, 1 November 2007


Beneficiation has become the new buzz word of the diamond industry, as was amply illustrated by the recent conference in Antwerp. So, as the politicians, major producers and overpaid celebrities battled it out for brownie points in front of the world press, local diamantaires, justifiably more interested in the black on their balance sheets than in African empowerment, bemusedly asked each other how one makes money from it.

Though this perspective might sound cynical, I personally believe it is a valid perspective and one that should be explored for the sake of the industry as a whole. The DTC has long been complaining that the diamond industry’s management behaviour is insufficiently corporate. That is changing under their coercive guidance, and the structure and approach of most middle and large sized diamond traders today is palpably closer to that of other industries. Still, most diamond trading companies trail far behind companies of comparable size in other industries in their middle to long term focus and vision. Their new obsession with beneficiation for Africa is, in my view, a good example of a lack of both.

Diamond jewellery, lacking as it does the central marketing it relied on when De Beers controlled the lion's share of the market, has lost much of its appeal for the younger consumer. The youth of today spends vast amounts of money on fashion, fad electronics and other non-essentials, yet emphatically skip diamonds on their lists of desirables, unless you count engagement rings. If diamonds are to maintain their value - and beneficiation is useless if they don't - this is what the diamantaires in Antwerp should be concerned with. It is the responsibility of politicians, mining companies and producers on an institutional level, to ensure that the supply is ethically and morally sustainable.

Starbucks do buy Fair Trade coffee to the tune of almost 20 million dollars annually which is marketed separately to those who wish to pay the premium. They are seriously committed to social responsibility and claim to pay, on average, over twenty percent more for all their coffee than the New York going price, yet they do not allow that issue to dominate their marketing. For good reason. Their job is to sell coffee not ethics and most commuters picking up a latte on their way to work might not want to feel like colonial exploiters but nor do they want to be confronted with these oppressive issues along with their morning caffeine fix.

The real market, which is driven much more by the consumer than the creators of campaigns will have you believe, and to a certain extent the diamond industry itself, is hoist on it own petard. The 'Diamond is Forever' campaign that has defined the market and marketing for a long time is also probably part of the reason that youngsters are indifferent towards them. An upwardly mobile twenty-something year old does not think twice about spending a couple of thousand Euros on the latest gadget, must-have shoes or a ridiculously priced fashion accessory; impulsive indulgences the fast earner feels he can afford. And they do so with surprising regularity. Buying a diamond however is seen as a momentous decision that has long-term implications. Thinking of posterity is not in their zeitgeist which might well be why diamonds are indeed not perceived as a regular luxury purchase. Patek Philippe watches, marketed as 'not to be owned but held for future generations' are not targeted toward the youth for precisely that reason.

It is heartening to see that some companies are applying some truly novel and daring marketing techniques to their wares. The latest bombshell from Hearts on Fire to grab the attention of those with ready money to burn is the diamond bra. The garment marketed by Victoria's Secret and naturally targeting the younger wearer, sports over eight-hundred carats of diamonds and has a price tag of a cool six and half million Dollars. It has masterfully and ostentatiously focused the attention of a generation not interested in fogey old diamond brooches, on assets most definitely not stripped from Africa and thereby given a new edginess to diamonds that has been sorely lacking in the mainstream.

The era of Forever is passing. In our fast-changing world the focus of consumers is on the here and now, so if we indeed want to ensure that diamonds are forever we should concentrate first on making them contemporary, fresh and eminently desirable. We should be creating new impetus and new reasons for buying them and, to paraphrase that great campaign for fresh cream in England, if 'naughty but nice' is what the consumers want then that is what they should have.

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