LONDON – The diamond industry is looking to up the ante on its effort to win over younger consumers more interested in gadgets and gastronomy.
The Diamond Producers Association lobby will ask its backers including top miners De Beers and Alrosa PJSC to raise its budget to as much as $60-million a year from $6-million, said people familiar with the plans, who asked not to be identified as discussions are private.
The group was set up in 2015 with an eye to try reviving the glory days of half a century ago when slogans like "a diamond is forever" were ubiquitous in popular culture. Such dominance, with help from stars such as Marilyn Monroe, coincided with De Beers’ near monopoly of production, allowing it to benefit directly from the increase in demand that followed its advertising efforts.
The collapse of De Beers’ monopoly, after losing a 10-year legal battle with the US over price-fixing in 2004, left the industry splintered and individual miners unwilling to pay for promotion that would aid rivals. At the same time, younger consumers with money to spend drifted to electronics and fine dining.
Prices for polished gems are near a six-year low and global diamond demand slipped 2% in 2015. At the same time, factory-made diamonds are posing a threat to miners as manufacturing becomes easier and cheaper.
De Beers cut its marketing budget in half to about $100-million a year through the 2000s. In 2015, it spent about $20-million on a new campaign to shore up demand among so-called millennials in the US and China, the biggest markets.
The lobby created the same year sought to extend such efforts by uniting miners behind a new slogan “Real is Rare. Real is a Diamond.” Member’s payments are set by sales levels, with De Beers and Alrosa paying the most.