Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Reshape the Diamond Industry
Transcript
- Lucas: There's a scene in the 1953 movie Gentlemen Prefer Blondes where Marilyn Monroe sings 'Diamonds Are a Girl's Best Friend' in a pink gown. That song cemented an idea in the American psyche: a diamond engagement ring was the ultimate symbol of commitment. Fast forward to June 2026, and that idea is under more pressure than it's been in seventy years. Luna: And it's not just changing tastes. It's demography. The number of people getting married in the first place is shrinking in every major market, and that directly hits diamond demand. Lucas: Exactly. Today we're looking at how falling birth rates reshape the diamond industry. Not just the obvious piece — fewer babies means fewer weddings down the line — but the specific way that a shrinking pool of marriage-age adults is colliding with a supply revolution in lab-grown stones. Luna: Let's start with the numbers. South Korea's total fertility rate hit 0.72 in 2025 — the lowest in the world. Japan's was 1.2. And China, which used to be the engine of global diamond demand, saw its fertility rate drop to 1.0. That translates to a lot fewer potential engagement ring buyers in twenty years. Lucas: Right. But the effect is already showing up in the engagement ring market today, because the people who would be buying rings in 2026 are those born in the late 1990s and early 2000s — and that cohort is smaller in many countries. Plus, the marriage rate itself is declining. In the US, the marriage rate per thousand people has fallen from about 8.5 in 2000 to around 6.5 last year. Luna: So fewer customers per capita, and those who do marry are often older, more established, and maybe more price-conscious. That's a double squeeze for an industry built on the expectation of a big-ticket purchase. Lucas: And the diamond industry has historically been very good at managing supply to maintain prices. De Beers, for decades, controlled the majority of rough diamond supply and could stockpile when demand softened. But that control has eroded. Today De Beers accounts for about 30 percent of rough diamond supply, down from over 80 percent in the 1980s. Luna: And they cut production in 2025. In early 2026, De Beers reported rough diamond sales down 23 percent year-over-year for the first quarter. They've been reducing output from their mines in Botswana and Canada to try to support prices. Lucas: That's the supply side reaction. But the really disruptive force is lab-grown diamonds. They're chemically identical, cost about 80 percent less than a mined diamond, and they've captured around 18 percent of the US engagement ring market as of late 2025. Some analysts think that could hit 30 percent by 2030. Luna: It's not just price. Lab-grown diamonds also sidestep the ethical concerns around mining, which matters to younger consumers. A 2025 survey by the Diamond Producers Association found that only 37 percent of Gen Z respondents said a natural diamond was important to them for an engagement ring. Lucas: And that's a huge shift from even ten years ago. The whole marketing narrative that De Beers built — 'a diamond is forever,' implying that it's unique, rare, and represents an enduring love — that narrative doesn't land as well when you can buy a virtually identical stone for a fraction of the price at a retail store. Luna: So the combination of fewer potential customers and a cheaper, abundant alternative puts the natural diamond industry in a structural decline. But let's get specific: how does this affect the companies involved? Lucas: If walking through the economy with us has made something click — maybe you'd thought about diamonds only as a consumer product, not as a demographic bellwether — that's the kind of insight we try to deliver every episode. And the reason we can do it without ads is listener support. If you found today useful, you can keep it going at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small way to help us keep the show independent and focused on the numbers that matter. No pressure, just if it's worth a coffee to you. Lucas: Alright, back to the diamond industry. Let's look at the major players. De Beers, owned by Anglo American, had to write down the value of its diamond unit by about $1.6 billion in 2025. Russia's Alrosa, the other big miner, has been affected by sanctions limiting exports. And smaller miners like Lucara and Petra Diamonds are struggling with lower prices. Luna: And then there's the retail side. Signet Jewelers, which owns Kay and Zales, reported same-store sales down 5 percent in their latest quarter. They've been pushing lab-grown options to try to bring in customers, but that cannibalizes natural diamond sales. Lucas: The interesting thing is that lab-grown diamonds have their own pricing pressure. Because they're essentially a technology product — you can make them in a factory — their price has been falling. A one-carat lab-grown diamond that might have cost $4,000 in 2020 now sells for around $1,200. That's great for consumers, but it means margins are thin for producers. Luna: So both sides of the market are squeezed. Natural diamonds face declining demand and excess supply. Lab-grown diamonds face commoditization and falling prices. The only winners might be the retailers who can pivot fast, or companies that focus on the very high end — the truly rare colored diamonds and investment-grade stones. Lucas: Right. And that brings us back to demography. The shrinking number of marriage-age adults isn't just a rich-world problem anymore. China's marriage registrations fell by about 14 percent in 2024 compared to 2019. India, the other great hope for diamond demand, has seen its fertility rate drop below replacement level — it's now at about 1.9 births per woman. Luna: India's diamond market is still growing because of rising incomes, but the demographic tailwind is fading. And in markets like Japan, the number of marriages fell to around 500,000 in 2025, down from over 700,000 in 2000. That's a lot of missing engagement ring purchases. Lucas: One more layer: even among people who do get married, the tradition of the diamond engagement ring is not universal. In East Asia, couples often spend more on the wedding itself or on gold jewelry. And younger couples everywhere are more likely to forgo the ring entirely, or choose alternatives like gemstones or simple bands. Luna: So the diamond industry is facing a triple threat: demographic headwinds, cultural shifts in the meaning of marriage and engagement, and a technological disruption that has collapsed the price of the core product. Lucas: And the industry is trying to adapt. De Beers launched a campaign called 'Real is Rare' in 2024, trying to differentiate natural diamonds by emphasizing their geological history and emotional authenticity. But it's an uphill battle when the alternative is cheaper and identical. Luna: There's also the question of what happens to the mining communities. Botswana gets about 30 percent of its GDP from diamonds. If demand for natural diamonds continues to decline, that has huge implications for an entire country's economy. Lucas: Absolutely. And that's the kind of macro consequence that demographic shifts create. It's not just about a luxury good. It's about the livelihoods of hundreds of thousands of people, the fiscal health of nations, and the way we signal commitment in a changing world. Luna: So when we look at falling birth rates, the diamond industry is a case study in how a seemingly stable market can be upended by forces that seem distant — fewer babies today means fewer engagement rings in twenty years, but the market is already feeling it. Lucas: And that's the takeaway for this episode. The next time you see a diamond ad, think about the demographic data underneath it. The industry that Marilyn Monroe celebrated in 1953 is now navigating a world where diamonds are no longer a girl's best friend — they're a tough sell to a shrinking pool of customers.