Breitling Embraces Lab-Grown Diamonds in Watches

Some experts have said that global sales of jewelry featuring lab-grown diamonds this year will top $10 billion, or about 10 percent of all jewelry sales. But in luxury watches, lab-grown stones still barely register.

So Breitling’s announcement last month that it would phase out natural stones by the end of 2024 in a bid to be what the news release described as “more sustainable” caught the industry by surprise. It would be the first major Swiss watch brand to move entirely to lab-grown diamonds; other brands, including Cartier, have dismissed them.

Watch companies, like many luxury brands, have tiptoed around the subject of lab-grown stones since they first became commercially available in the 1980s. While most would like to avoid being linked to the ecological damage and conflict issues rife in gemstone mining, lab-grown diamonds, which require large amounts of energy to create, have their own murky sustainability reputation.

And then there is the question of value: Will watches featuring lab-grown stones hold their value as well as those with natural gems do? According to a diamond industry report published earlier this year by Bain & Company and the Antwerp World Diamond Center, an increase in the availability of lab-grown diamonds depressed 2021 wholesale prices to just 14 percent of natural diamonds’ prices, a decline from 20 percent in 2020.

Yet Breitling, primarily owned by CVC Capital Partners, has expressed confidence in its decision. “Lab-grown diamonds are a new paradigm,” Breitling’s global head of sustainability, Aurelia Figueroa, said in a video call. “I hope that as we begin to place status on things like social and environmental impact and traceability, the inherent value of lab-grown diamonds will grow.”

Breitling says its lab-grown gems, created in India by Fenix Diamonds, have the same physical properties as natural diamonds and are produced over a period of two to four weeks by, as the news release described, “applying gas and heat to a diamond slice in a vacuum” — what the industry calls the Chemical Vapor Deposition method.

Ms. Figueroa said that she did not know exactly how much energy was consumed, but she estimated that the power needed to produce a one-carat lab-grown diamond was 200 kilowatt-hours of energy, or roughly the same amount used in 90 washing-machine cycles.

The results, she said, are single-crystal lab-grown diamonds ranked Type IIa, a label indicating purity and transparency achieved by only a small percentage of natural diamonds.

In an effort to convince consumers that its lab-grown diamonds are ecologically sound, Breitling has hired independent agencies to assess them. Last month it introduced its first watch using lab-grown diamonds, the Super Chronomat Automatic Origins, which has certifications from SCS Global Services, an environmental auditor based in Emeryville, Calif., and from Sourcemap, a supply chain mapping company in New York City.

To qualify for SCS Global Services’ standard, which applies only to lab-grown diamonds, producers must commit to becoming climate neutral within a year of certification, a status achieved when a company offsets, or compensates, for at least as much carbon dioxide as it emits. A Breitling report issued last month said that all its emissions for the fiscal year ending April 1, including those associated with suppliers, had been calculated, verified by PwC (formerly known as PricewaterhouseCoopers) and offset. However, the offsets have not yet been verified, so Breitling cannot officially call itself climate neutral just yet.

Stanley Mathuram, SCS Global Services’ vice president, said his company scored diamonds in four categories, including traceability and climate neutrality. And Breitling’s gems averaged 92.25 points out of 100 for an A+ rating. “No diamond, mined or laboratory grown, is expected to achieve a perfect rating of 100,” Mr. Mathuram wrote in an email.

He noted that the certification would be valid for a year and that the score was likely to improve next year: Fenix Diamonds says it will have switched to renewable energy early in 2023.

Buyers of the $19,500 watch (which also features a gold case made of what Breitling called “gold from a single artisanal mine that meets the Swiss Better Gold Association’s criteria”) will get what the brand called a “provenance record,” logged in a blockchain-backed NFT and verified by Sourcemap.

“Customers will see a map of the source of the products, the mines and the factories along the routes,” Leo Bonanni, Sourcemap’s founder and chief executive, said in a video call. “We can assure you that the supply chain you’re being shown is the actual supply chain.”

But beyond the sustainability debate, what about the romance deficit? After all, lab-grown diamonds did not inspire “Diamonds Are a Girl’s Best Friend” or “Diamonds Are Forever.”

Some cannot see lab-grown diamonds in luxury. “Lab-grown diamonds are a good solution for fashion-led watches,” Vishal Mehta, director of the natural-diamond supplier Dimexon, wrote in an email. “Natural diamonds hold value, as opposed to lab-grown diamonds which are steadily depreciating in value.”

Experts were not so sure, though. “The jury’s out,” Diana Verde Nieto, co-founder and chief executive of the consultancy Positive Luxury, said in a video call. “At some point the mines will dry out and close down. Lab-grown diamonds are a really good alternative when you can’t take any more resource from the earth.”

And Bain’s report suggested that rough diamond production already had been declining rapidly, with an output of 111 million carats in 2020, down from a 2017 peak of 152 million.

In any case, lab-grown diamonds might not need proof of sustainability to appeal to watch buyers. “Sustainability is important to customers, but not Top 3,” Olya Linde, a partner at Bain and co-author of the diamond report, said in a video call. Instead, she said, consumers have been choosing lab-grown diamond pieces for imaginative uses of the material. “Brands need interesting designs, rather than to say they’re cheaper,” she said.

One luxury Swiss watch brand already has taken note of her advice. In March, TAG Heuer introduced the Carrera Plasma Diamant d’Avant Garde Edition, using lab-grown diamonds with unusual shapes and textures. But at its release, TAG Heuer made no mention of sustainability, instead promoting the originality of the timepiece, which some reports said was priced at $500,000. (The brand would not comment on the price or on sales.)

“The value of our watches is determined by their artistry and craftsmanship, not solely by the value of their individual materials,” Frédéric Arnault, TAG Heuer’s chief executive, wrote in an email. “Strong emotional attachment to a timepiece is something that comes from the piece as a whole rather than from its individual components.”

Some experts would agree. “We have to decouple the commodity and the finished product,” Ms. Linde said. “The cost will come down, but what makes a luxury product is the value added of a company that can make customers believe they’re buying something valuable.”

Others said they felt that comparing natural and lab-grown gems was irrelevant. “I don’t think consumers care,” said Paul Zimnisky, a diamond industry analyst based in New York. “They’ll buy Breitling for the brand, the heritage and the mechanics associated with the watch, not for the stones.”

And Mr. Bonanni of Sourcemap said Breitling’s example would open the floodgates. “Breitling is the first luxury watch company to work with Sourcemap and to commit to supply chain transparency,” he said. “Once the first company has done it, then it makes it much easier for everybody else. Transparency is the future.”

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