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09 december 2019

jean_marc_lieberherr_xx.jpgWith over 25 years of experience in a variety of leadership positions across many geographies, functions and businesses, Jean-Marc Lieberherr has more than 10 years’ experience as a diamond industry leader, which includes as a Board member of the World Diamond Council.

As a co-founder of the Diamond Producers Association (DPA), its first chairman, and then its first Chief Executive, Jean-Marc dedicated himself to promoting diamonds as a unique miracle of nature and symbol of love, as well as to supporting the diamond industry on its path towards ever greater levels of responsibility and transparency. As CEO, Jean-Marc oversees all aspects of the DPA's operations, reporting to its Board of Directors.

Here, in an exclusive interview with Rough & Polished, Jean-Marc Lieberherr takes us down the road of DPA’s journey since it was founded to promote diamonds globally.

Some excerpts:

Can you spell out DPA’s initiatives to protect and promote the integrity and reputation of diamonds and the diamond industry since inception and specifically since you took over as CEO of DPA?

Will just pick on a few major initiatives to illustrate our activity:

The first thing we did was to establish a new communications platform which is anchored to some deep millennial insight: In a world where virtual, fake and artificial seems to take center stage, people crave for real and authentic. What is more real and authentic than a unique, 3 billion-year-old diamond from deep within the Earth, as old as life on Earth, the oldest thing you’ll ever get to touch or own? Hence “Real is Rare, Real is a Diamond” is a powerful communication platform. Arguably a complex thought to communicate but one that is deeply relevant to consumers, like natural diamonds. We have launched this platform in the US, China and India, and our last global campaign “The Diamond Journey” (soon to be launched in India) is a beautiful tale of a diamond’s 3-billion-year journey.

As part of reinforcing stakeholder confidence in the diamond supply chain, we commissioned the first-ever independent survey of the socioeconomic and environmental impact of large scale diamond mining. The survey, conducted by Trucost, an S&P company, covers all DPA members operations which represent together 75% of world diamond production. It is available at totalclarity.com and shows that DPA members create $16 Billion per year of net value through their diamond mining activities. Of this benefit, 80% flows to the local communities through employment, local purchase of goods and services, and taxes and royalties paid. The report, which became the base of our educational platform --Total-Clarity.com, provides access into a highly scrutinized, yet largely misunderstood sector.

Finally, we have launched an important programme called ASSURE, aimed at supporting the diamond trade on synthetic diamond identification and providing them with an independent, third-party evaluation of different detection instruments available. The contamination of natural diamond inventory with lab-grown diamonds is a potentially disastrous phenomenon for the whole industry. The ASSURE programmes aim to accelerate the dissemination of effective diamond identification equipment and practices across the supply chain. We have details of nearly 30 of the leading instruments in our directory diamondproducer.com/assure and our programme is expanding quickly.

These are some of the main initiatives we take. There are many others, including on the terminology front. We have spearheaded the development of the Diamond Terminology Guidelines, signed by all major industry organisations, essential one-pagers that explain to the trade of various countries how they should call natural and lab-grown diamonds to conform to industry standards and local legislation. The Guideline applying in India is the International Guideline available at https://diamondproducers.com/diamond-industry/diamond_terminology/

What’s your opinion of the current global diamond industry? How does the future look to you, what with all the challenges negatively impacting growth in recent times?

Following a strong 2017 and firm 2018, worldwide diamond jewelry market growth has been slowing down in 2019 mostly as a result of economic uncertainty and temporary market factors, especially in China and India. In particular, the pipeline has restocked and resulted in a lower need for new polished and rough to enter the pipeline, which has had an impact on prices.

At the DPA though, our horizon is inherently long term and we look at fundamentals. Our research shows that diamond desirability among consumers is high in all key markets, and we expect China and India to be future growth engines as desirability translates into purchases beyond main cities. In the meantime, the key challenge is to translate this appetite for demand into actual consumption growth and polished price growth, as consumers are cautious in the current environment. As the situation stabilizes around the world economy and local factors such as trade tensions ease off, we expect to see the situation improve significantly and diamonds have a great future. The recent news of the acquisition of Tiffany by LVMH is a sign of the potential of the diamond and high-end jewellery business which has performed well in recent years and has significant growth potential.

The recent press reports mention that WFDB would work closely with DPA on generic promotions of natural diamonds. In what areas will this cooperation be? Please give details.

The DPA is keen to work with all major industry organisations to ensure that all members of the diamond trade are pulling in the same direction and amplifying each other’s efforts. This is the sense of our collaboration with the WFDB.

What initiatives are being formulated by DPA and its associates to strengthen the natural diamond sector in the present scenario, when lab-grown diamonds/jewellery sector seems to be growing by the day?

It is normal that lab-grown diamonds should be growing, starting from a very small base, as they provide an interesting fashion jewelry alternative in a segment in which natural diamonds are not very present and where synthetic coloured stones and simulants dominate. As manufacturing grows and costs continue to decline, they are going to become even more attractive as accessories.

It is an occasion for us to reiterate the fundamentally unique proposition of a natural diamond as a rare, precious stone that carries enormous symbolism and has enduring value. Natural diamonds have been around for billions of years, have fascinated mankind for thousands, the advent of synthetic replicas will not take anything away from the mystique and value of the real thing. We have seen this in synthetic coloured stones or in the art world where excellent replicas have challenges experts without fooling them and not has any impact on the value of authentic prices. In the end, consumers know what is precious and valuable and what is not.

As explained above, we also bring home the enormous positive socio-economic impact diamonds have on the world and where consumers are concerned about environmental matters, we explain the reality of modern diamond mining which has a very small environmental footprint, lower in fact than that of a lab-grown diamond which takes huge amounts of energy to produce and uses almost exclusively high carbon fossil fuel.

We continue to promote differentiation in terminologies and full disclosure to ensure that consumers make an informed choice. As the value of natural diamonds and LGDs continue to diverge, consumers will become increasingly vulnerable to deceptive marketing tactics. That needs to be tackled through clear standards, norms and regulation wherever possible. We have seen in the US how the FTC has had to warn 8 LGD brands about deceptive marketing earlier this year. A lot of our education material on these important matters is available at https://diamondproducers.com/diamond-truths-infographic/.

In terms of promoting natural diamonds, which are the campaigns that were initiated by DPA to date? How effective were they in countries like the US & China where some campaigns have been released?

In the US, we have launched earlier this year a self-purchase campaign called “For Me, From Me,” which is promoting diamonds to women as a self-purchase item. It is the first diamond campaign that directly talks to women and empowers them explicitly to buy diamonds for themselves. It has been very well-received by the trade and we have seen continuous growth in campaign adoption.

It is a new market for us as we opened our office in March 2018. We have identified that the opportunity in China is to talk about diamonds as a symbol of precious and authentic love and move away from marriage rituals or luxury codes. Like all other consumers, Chinese consumers want authenticity in what they buy. Our campaign “Cherish Precious Love” mobilises 15 celebrities who talk about their own love experience and the symbolism of diamonds in their life. We have launched it only in Shanghai and Beijing for the moment for budget reasons and to learn before we expand, and results have been excellent and we will intensify our action next year along these same lines.

India is one of the major consumers of diamonds/diamond jewellery, but DPA campaigns in the country have been far removed. According to industry members, frequency of ad campaigns from DPA should be increased for a sustainable effect. Your thoughts?

In India, we are in our second year of investment and we believe that we have a strong marketing and communications programme in place. Increasingly, our investment in digital, which is not as visible to many, especially to the trade, but reaches consumers in a more personal and targeted manner. Having said that, we have been active for over 26 weeks this year on television, and we are amongst the most active players in the category. But again, it is targeted to our target audience and not necessarily as visible to all as before as the media scene is more fragmented.

India is a market which continues to invest and believe in gold. For consumers to begin to view diamonds as being integral to their special moments, it will take a shift in perception which takes time. It is not an overnight job and the efforts are continuing to drive this change.

As an industry body, our campaigns will be generic at a category level. The onus then lies on retailers to build on our work and translate into sales. We are keen to partner with retailers to make that happen where possible, but our main role is to inspire consumers to consider diamonds and that is being done under the pillars of emotion, education and advocacy. We have seen a transition from a focus on the emotional symbolism of diamonds to bringing in aspects around the diamond’s remarkable journey.

This year, the #Real is Rare: New Mom Gift initiative has been a piece of communication offering a specific call to action to consumers. We have invested significant monies for a high impact promotional campaign across mediums, and also on-boarded key retailers as partners. At the same time, we want to establish a positive sentiment for natural diamonds and are furthering this through a focused campaign featuring spokespeople from the trade & also influencers.

Going forward, do you see a future where both the natural diamond sector and the lab-grown diamond sector co-exist in the global market? Or is that ‘Utopia’ we are dreaming of?

Lab-grown diamonds and natural diamonds can co-exist. The markets and consumers both cater to are extremely different. Lab-grown diamonds have a definite place in the fashion jewellery segment, but natural diamonds will continue to be the choice for the significant moments of life and where enduring value and symbolism matters. Right now, consumers are a bit confused, especially in the US, because prices of LGDs remain fairly high and they don’t understand what they are. As prices go down, which they will as sure as gravity exists, it will be clearer that LGDs are an accessory product that does not carry any inherent value. The problem right now is consumer confusion, which is dangerous for the market as a whole and deceptive marketing tactics used by many LGD brands.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished