Capturing Value from an $11 Lab Grown Carat

It costs an estimated $10.85 to produce a carat of lab grown rough.

The real money is being made much further down the supply chain.

By the time lab grown diamonds reach consumers as finished jewelry, their total retail value has increased 21-fold, according to industry analyst Edahn Golan's Lab-Grown Diamond Value Chain 2025, published earlier this week.

Which raises an interesting question: if growing the diamonds is relatively cheap, who captures the value created along the way?

The estimated global cost of producing lab grown rough in 2025 was $753 million, far less than the $1.23 billion cost of cutting and polishing the stones.

The bulk of the value is created after the diamonds leave the grower.

The total retail value of finished lab grown diamond jewelry is estimated at $23.78 billion, of which $12.4 billion represents the diamond content itself.

Compare that with natural diamonds. The estimated cost of global rough production is $9.23 billion, while the finished retail jewelry market is valued at $81 billion.

That represents a multiple of 8.8 times for natural diamonds, compared with 21 times for lab growns.

There is clearly a lot of value to be added between reactor and retail. Almost half the final value of lab grown jewelry comes from elements other than the diamonds themselves.

The retailer is selling much more than a stone. It is selling a finished jewelry product.

Look at the retail value generated for every carat of rough produced: approximately $343 for lab growns, against $820 for natural diamonds.

Lab growns generate a much greater multiple of value along the supply chain. But natural diamonds still generate more than twice the retail jewelry value per carat of rough produced.

It is little surprise that factories in India and China are expanding capacity. One estimate puts India's CVD reactor count at more than 14,000, twice the number recorded three years ago.

Buying more machines is considerably easier than discovering new diamond deposits. But that is also becoming the challenge for lab grown producers.

As production capacity expands, their product becomes increasingly commoditized. Prices are under constant pressure, and stones are increasingly traded as interchangeable goods.

Just take a look at the live auctions on TikTok, where diamonds are sold in an endless series of 20-second bidding frenzies.

While growers are churning out millions of carats at ever lower production costs, the competitive advantage is shifting elsewhere along the pipeline.

Global lab grown output is estimated at 69.4 million carats in 2025. In volume terms, that is around 70% of natural diamond production, estimated at 98.8 million carats, according to the Kimberley Process.

The two businesses are increasingly built on different propositions. Lab grown offers a manufactured product whose production can be scaled up, with prices under pressure from growing capacity.

Natural diamonds depend on a finite resource and on consumers attaching value to their rarity, origin and authenticity.

There is a fundamental difference. In the lab grown business, much of the value may lie in the jewelry built around the diamond. For natural diamonds, the stone itself remains central to the proposition.

The question is whether consumers will continue to see that as a difference worth paying for.

Have a fabulous weekend.