86. Lab-grown diamonds were underestimated. Here's how they're disrupting luxury | Nathalie Morrison

0:00Welcome to All About Business with me, James Reed, the podcast that covers everything about business, management and leadership. Every episode, I sit down with different guests who bootstrap companies, masterminded investment models or built a business empire. They're leaders in their field and they're here to give you top insights and actionable advice so that you can apply their ideas to your own career or business venture. What happens when a centuries-old luxury industry is suddenly disrupted? And how do you build a premium brand in a market that's changing fast? Today on All About Business, I'm joined by Natalie Morrison, founder of Astrea London, a lab-grown diamond brand, redefining what luxury jewellery can look like.

0:49In this episode, we discuss leaving a career in finance to start again, the rise of lab-grown diamonds, and how to build a business at the intersection of ethics, innovation, and luxury.

1:06Today on All About Business, I'm really delighted to welcome Natalie Morrison, who is the founder and CEO of Astria London. This is a high-end lab-grown diamond jewellery brand that you founded, Natalie, in 2023. and the brand focuses on ethical and sustainable luxury using the very top end of lab-grown diamonds with a very high level of purity, I understand. So this is a level of purity rarely found in nature, but you can make these diamonds in your laboratories, Natalie. Absolutely. So thank you for coming and talking to me because this is a really disruptive new focus in the jewellery industry.

1:48You're leading this change. I'm fascinated by this story. Could you begin by saying, how did you get into lab-grown diamonds? Start about the origin story, I suppose. First of all, thank you for having me. It's nice to see you again. Happy to see you. So, very quick background. I grew up in a place called Saint-Emilion in the south of France, where we make wine. As I was saying, we have a few vineyards around the world. Went to Cambridge here and then started in banking. So this is previous life where I set up some wealth management firm that I sold to private equity. And I thought I will never work again after I sold.

2:29So there's a lot in what you just said, Natalie. So you came from France to England. You studied at Cambridge. Correct. You then went into wealth management. You had a career in wealth management, in banking, for how long? 20 years. So you worked in wealth management. And you raised, I understand, huge amounts of money for your clients. I was okay. How much are we talking about? You're being modest. I set up the private office for Coots, which is the ultra net wealth business, where we raise around 30 to 40 billion, I think it was. Coots Bank is famous for private wealth management. So you set that up.

3:01I set up the ultra net wealth business, which is everybody with 10 million plus. And then I decided to do it on my own. And I set up two wealth management firm that I sold the latest one to a private equity group six years ago. Right. And I was really keen on spending time with the children and not working again. I had done really well. And so I started doing a lot of charity work for two years. One is because I've got my own charity in South Africa, giving education to kids from underprivileged background. And also because I started doing it with the school. and interestingly enough um when i realized doing all this charity work how many of these kids you know come from background in the mine industry where all them or their family has been damaged or hurt or died in mines and i realized so you saw that firsthand in south africa yeah so we've got in the charity we have it's in a place called limpopo it's um around two hours north of Johannesburg.

4:05I started this program with some girlfriends 15 years ago, and we've got around 160 kids, which we got out of poverty and gave them an education. And so we spent a lot of time understanding where those kids come from, how can we help the wider community. And if you see the damage that the mine industry is doing in Africa, honestly, I am going to use a bad word, but it's disgusting and that's what gave me the idea and then there's the film blood diamond isn't that i've seen yeah which describes that which leonardo dicaprio very graphically but you've seen it for yourself and you so you're aware of children dying in mines still today well it's better than it used to be so they have much more process in place it's called the kimberly process that they put in place but still i mean even if you just go not as extreme as children dying it's also you know the deforestation the the amount of energy and water that they use the explosive that they use there's some villages which have actually completely gone because of it so my point is there is no need today to damage our planet for wearing those beautiful jewelry we can now make them in a lab and i always used to say that actually i love mine diamonds i'm still wearing some my engagement ring it's emotional and everything but i think with science and technology we can embrace the past and welcome the future i think it's just going to change completely the industry and it's already you can see it in the numbers already well this is very interesting i mean you i mean for people who can't see you're wearing quite a lot of sparkling things some of which are your own products i think well they're all are actually um yeah i mean And beside my engagement ring, which actually is a criteria one that I got from my engagement because it's sentimental.

6:02And also, I really, as I said, I really think the two industries can really work together, whether it's mine or lab. They keep fighting. I don't think there is a reason for that. So, okay. So, I can see the logic that you think there's an alternative here that people are going to embrace, which is diamonds that are made in labs and don't involve blowing up parts of the planet and doing a lot of damage to sort of communities. Exactly. And you get exactly the same result. They are much cheaper as well, obviously, because it doesn't cost as much. Exactly the same result. Exactly the same result. So for those like me who don't know how this process works, how do you make a diamond?

6:40I mean, what are you actually doing in the lab to deliver exactly the same result? So let me first answer the question how I got there. That was your first question. I did two years of research to answer the question you just asked me right now. and I put a lot of my own money into this. I really wanted to understand, is it really true that they are exactly the same? Because that's the main question. And the answer is yes. It's a seed of carbon who, instead of growing in the ground and being pushed up by the mantle and then taking years to exploit to go down and get, you put the same seed of carbon, which originally the first one was natural, in a lab.

7:18Sorry, a seed of carbon? Yes. What is that? It's a little flat, little piece of carbon, basically, that you put in like big microwaves. Right. And we replicate exactly what happened in the mother nature. Over millions of years, I suppose. Over millions of years into those reactors, which are like microwaves. And by doing that, they grow within four to six weeks, and you get exactly the same product. So you're putting a bit of carbon in a microwave, and four to six weeks later, I mean, this sounds... That's the quickest way to say it. That's a great summary, but it sounds amazing. Yes, it is. You have a sort of sparkling bauble that comes out.

7:57Actually, a lot of people don't realize, but it takes the same time to make the diamond under the hearse. Right. It just takes billions of years for it to go back up the surface and for us to be able to extract it from the planet. Oh, I see. So it's sort of happening sort of deep in the planet. It's happening deep in the mantle, yeah. And then it takes a long time to surface. That's correct, yeah. Interesting. But in our reactors slash microwave, as I call it, you just have to put the seed there of carbon, which is exactly the same seed as you will have under the ground. And four to six weeks later, it will have grown and you open and it becomes a diamond.

8:32And then it's a little bit of a black. There's a lot of polishing and the same exercise than with a diamond who come from the ground. But your business, Astria, as I understand it, really focuses on the high-end diamonds. That's correct. You've made a decision to do that. What makes a diamond high-end and why did you take that path? Okay, so when I looked at the industry and first of all, I was amazed by the fact that there is zero difference chemically, optically, structurally between a lab and a mine diamonds. I always make a pretty bad analogy saying I've got four children, two of them IVF, two of them at natural conception.

9:13are you telling me that there is a difference between them? No. And it's not the nicest one, but it's true, right? I mean, you couldn't tell, obviously, that one was one and one was the other. That's what you're saying, huh? That's my point. And it's the same. There is no gemologist in the world who can see the difference between a lab and a mine diamond. Why? Because there is none. It's the same DNA inside. Did you know that there are nearly 1 million 18 to 24-year-olds who are currently not in education, employment, or training in the UK? This is simply not good enough, and I want to do something about it.

9:46That's why REED is launching a new initiative, giving£20 ,000 to young entrepreneurs to help them grow their small business. Visit reed.com forward slash entrepreneurs to find out more. We want to support and encourage the next generation of entrepreneurs. So this is hugely disruptive for the traditional diamond industry. It's massive. I mean, just to give you numbers, it's a$100 billion market a year, the diamond industries. It used to be 1 % of the market in 2015. Well, lab grown. Lab grown versus mined. It used to be 5 % of the market in 2021. I think they will announce 40 % for last year. Right.

10:32They're already saying that 70 % of the engagement ring in the US are lab grown. Right. The Economist forecast it to be between 80 % and 90 % by 2030. The DMCC in Dubai say it will be 100%. Realistically, it will be a pretty high number. And why? Because you can access exactly the same product, first, without hurting the planet, second, at the real price, because they are 70 % to 80 % cheaper, because it doesn't cost as much to make them. 70 % to 80%. Yeah. You can see the appeal here. and you get exactly the same and you can get better quality than the one you had well i mean i can see a world pretty soon where people won't know the difference anyway and it's just these are cheaper diamonds and you get the same certificate so that's another thing so to answer your question in diamonds you have a different quality of diamonds it's called the four c's um cut clarity color and carat and what happened is by putting those criteria you've got some independent firms called IGI and GIA.

11:37So cut, clarity, cut, color, and carrot. Correct. Right, those are what you're looking for. Yes. And then you have independent firms called IGI or GIA who gives you the characteristic of your diamonds versus those criteria. Right. Depending on how high the color is or the clarity, it shows you the price of your diamonds. So the highest, obviously the most expensive. The highest one are what we call D &E color. D &E. And that corresponds to 1 % of the mine diamonds in the world. Right. 1%. We only do those color. I only do D &E, VVS plus in terms of clarity, which put us into the very, very high end.

12:21Why did I do that? Because when I set up the company, the market below, I will say, 2 ,000 pounds, the very low hand, which is below high color, is saturated so today sarovsky all the brands on the on the more mass market only low use lab diamonds really they don't do mine anymore because there's no point paying more for the same thing um i wanted to position ourselves on the very top hands so i started by putting my own money into this uh traveled the world went to see which factories are the best factories in the world I'm in love with the one in Dubai and in India. There's 71 factories in the world today, mainly between China and India and a little bit in Dubai.

13:09And I work between India and Dubai and then decided to use... So you're not operating the factories? You're effectively a brand that sources from these suppliers? We source from the factories. And then those diamonds, when they are polished and cut, 90 % of the diamonds in the world are polished and cut in a place called Surat in India. Right. 90 %? Yeah, from all the diamonds in the world. And when you go into Surat, so I open a little office in Surat where I've got gemologists there who choose the diamonds, make sure that they are the color and clarity that I want. And then we put them to the lab, the IGI or GIA to get the right certification.

13:50Right. And then after that, we mount them into diamonds. Amazing. So if people are interested in finding your diamonds, Natalie, I mean, your brand is Astria. What's your URL? What's your web address? How will people find these products? So on Instagram, we are at Astria London because that's where the new generation looks at. Astria London. And on our website is www.astrialondon.com. Right. Very good. And how much, so you say you're just producing the very high end. Correct. D &D, as you described. How much do these diamonds cost? So today, well, let me start from a little bit going back on this.

14:36So the diamond industry has started exploding 100 years ago now. And we've been told the diamonds were rare, right? That means the reality is diamonds are not rare. There is enough diamonds in the world so that 8 billion people can each have half a carat. Right. Right. They've been high hidden and they've been kept so that the price went up. Right. It's a lovely company called De Beers who has had the monopoly on those. Yeah, they've done very well out of diamonds, haven't they? Well, they're not at the moment. They're trying to be sold and I think the maximum they are getting, they were valued at 12 billion in 2022.

15:15Today, they are trying to sell it for less than a billion and they can't. Because of what's happening in this space. Because of what's happening in this space. This disruption, yeah. It's a massive disruption. Yeah. But also because people are realizing that diamonds are not rare. There is a beautiful Netflix series called Nothing Lasts Forever. Right. It's a documentary where Netflix was actually sued for 40 million pounds to put that series out. And they won against the beer. The series out and you can just watch it. It's absolutely - Nothing Lasts Forever. And that's about diamonds, is it? It's the story about how we've been lied about the diamond industry for so long.

15:51Oh, right. And that's on Netflix. Nothing lasts forever. I'll have a lookout for that. And that was a controversy with De Beers. That was a massive controversy with De Beers, yes. Okay. So, all right. But you still haven't answered my question, which is how much do one of these cost, Natalie? So they're not as rare as people think. So, yeah. Yeah, so the lab diamond today versus the mine diamond is around 70 % to 80 % cheaper for exactly the same cut, color, clarity, and price, so with the same certificate. Right. But the reason I mentioned pricing here, and I come back to the beers, is because everybody thinks diamond is an investment.

16:26But the reality is diamonds are not an investment, whether it's lab or mine. Diamonds are the beautiful things we love wearing, but nobody really makes money in the diamond industry unless they go into the very, very rare stones. To give you an example, today if you buy a two carat decoller in the mine industry, you probably, if you go to Cartier or the viewers pay between 50 and 70 ,000 pounds for two carat, the same equivalent in mine will be 5 ,000 pounds with the same certificate, the same baby, with the same DNA. right right so why on hers do you want to buy a 50 to 70 000 one when you can buy a 5 000 one the only reason will be if they go up in value right but the reality is by the time you leave the beers or cartier or any of the big brand shop you've already lost 50 of the money today if you try to resell a mind diamonds if you get 20 to 30 of what you paid for you'd be lucky so and i'm not saying it's better investment there for enjoyment is right and i'm not saying it's better with a lab diamonds.

17:30But at least one, you lose 5 ,000 pounds at the worst. The other one, by the time you leave the shop, you've already lost 25 ,000. So, but some people like the idea that it comes from the ground instead of coming from the lab. So it gives customer choice, which is what is amazing. You mentioned that in America, 70 % of engagement rings are now lab grown. That's very interesting, because I wonder, you know, that feels to me like the new generation is really embracing this, and they don't feel that it needs to be dug out of the ground to represent what they want it to. Is that change happening really fast, or has it been gradual?

18:10No, it's really fast. I mean, look, in 2015, it was 1%. They only started, IGI, GIA only started grading them the same way, lab and mine, really in 2019. I mean, IGI started early, but GIA started in 2019. So explain what does GIA stand for? GIA is an IGI. They are the firms who give you the cut-carat clarity, the four Cs. The companies that will say what it is. The main companies who will grade diamonds. Right, so there are two of them. The two main ones are IGI and GIA. There's a few, but these are the two main ones that everybody trusts. So I suppose this point you've made about them being identical is pretty key to people saying, well, I may as well get a lab-grown one.

18:56Well, if you get the same certificate, meaning that they are real, you get the authenticity, and frankly, you get the same quality, color, and everything. Why wouldn't you? Why would you? And it's 70 % cheaper. Then it's a question of choice. I'm not saying some people still want to buy diamonds who come from the ground, right? And I'm not criticizing it. At least it gives customers choice. The young generation is very caring about sustainability. Like my little boy who is 12, if I put a piece of paper on the floor with mommy, we grew up by throwing, you know, dial cock on the window or cigarettes, right?

19:31So that's how we grew up. It's a very different generation. They really care and they need to care about the planet. Yeah. So this gives them the strategy about everything because you can get exactly the same thing in a way that doesn't hurt our planet. Yes. Yes. So how are you finding the market in Britain for this? I mean, you mentioned that. So it's interesting. So when I set up the company, I was just a mom setting it up on my kitchen table. And we sold around$1 million within the first year, which was amazing. Yeah. At 7 ,000 pounds on average. So it was amazing. But then I said, OK, this has legs.

20:10So I went and raised 4 million pounds at 14 million valuation for the company. and I did it with the head of Goldman Sachs Asia, the head of Bridgepoint, the head of Van Group. Well, these were your investors. My investors. These were from your previous life networks. That's pretty good. So you had some good backers. And by doing that, I started opening shops. So we opened here in Windsor. So you have a shop in Windsor. We have a shop in Windsor, in the Fairmont. Right. My strategy was, look, education is key in life And education is what needs to understand love versus mind, for example. I make your own decision.

20:47But I can't spend two hours or one hour that we have today speaking to 8 billion people. So I thought if I go into hotels and I put brochures everywhere in the rooms, I will be able to communicate. So that was your channel. That was my channel. So we opened there. I opened two stores in Dubai at the Mandarin Oriental and the Five Lux. and now opening in Paris at the Mandarin Oriental World. So you're really going for the hotel market? I started like this and then I thought who in the world has the biggest voice, which is loved by my 80-year-old mother-in-law and my 13-year-old daughter wants to watch...

21:26I can guess the answer to that. Go on, who is it? Sex in the City. It's Sarah Jessica Parker. Right. So I wrote to Sarah Jessica and I said, would you be interested in discussing, I mean, she's the queen of the fashion industry. She's influenced our life and generation. And also, I think she has very good values, which matters a lot to me. So Sarah Jessica Parker is American. Correct. Based in America. So I wrote to her. Sex and the City was her main. Yes, Sex and the City was obviously our main series. She's very well known. So you wanted to have a person who helped you? I wanted somebody who can communicate the message.

22:05First of all, she needed to understand the message. and Sarah Jessica is a very very clever lady by the way she was with the Queen last night actually because she was also a judge at the Book Award so she met the Queen in New York yesterday wearing our pieces I was very proud actually but I wrote to her and she invited me to come to meet her in New York we had a very long lunch and she ended up actually becoming an investor she owns 10 % of the company and is our creative director as well so she owns 10 % So you've got about 50 % then now, is that right? A bit more than that. A little bit more than that.

22:40Okay, so you're maintaining control, but you've got some really good business partners. I'm still on 70 % of the company. 70%. So she's your creative director. What does that involve? What does she do? So she does, first she's the face of the brand. Yeah. And she's also, so creative director means she does two collections a year, around 14 pieces that she literally created herself with our designers. this is a this is a growing phenomena isn't it having celebrity investors directors in all sorts of businesses now i mean we had we had a guest on the podcast who specialized in connecting people okay in this way so that's worked well for you so far well the thing is that as you said it's a very fast moving and it's a transformation industry right yes um there's so much going on with uh with lab ground diamond which is not just the jewelry industry it's also semiconductors cancer research there's so much you can do is lab diamond right so it's fast growing so rapidly that you i needed the voice who can communicate the message and so sarah jessica is one of them i also have mario toji okay who is the rugby player rugby captain of england what are you doing for you is the face of the men industry because a lot of men are starting to wear jewellery.

24:00Right. So we do a lot of black diamonds bracelets. Right. But what I've tried to find... How much would one of those bracelets set me back? Around 10 ,000 pounds. Right. It would be for black diamond bracelets. It's beautiful, actually. My husband wears two. I'm very proud. Two? And he's a lawyer. He's a lawyer. Okay. Well, this is very interesting. The reason I mentioned celebrities, I think it depends which celebrities as well because for me, sarah jessica and maro both share the same value as mine one thing which matters to all of us is that we give a percentage of what we make every year to charity and i really believe that corporate should do this yeah so um sam bandila which is our charity in south africa or give education to kids from underprivileged background is our main charity and i'm really really behind this right so well i would support that i mean i'm a big fan of philanthropy companies um so where that's where a portion of the shares are owned by a charity so that's another way of approaching it yeah even better anyway so um so you've i mean it sounds to me you've been quite astute if i might use that word in in getting your brand out there in a at a at a point in the history of this market where there's rapid change and a lot of new competitors i imagine coming out that's that's the reason i'm going so fast i'm trying to you need so you raise money you've got some good high profile partners you've got some good channels through marriott and other fairmont and other hotel groups mandarin mandarin sorry um so that that's very strategic isn't it and now we are taking the u.s actually So I was in the US.

25:43I just came back. So for the charity, for San Vandila and Cash and Rocket, we are 80 women, part of the group. And we did a car rally from Charleston to Miami last week. We raised around a million dollars for the charities. And Astraea was the main sponsor. Oh, right. So you did a car rally. I did a car rally. I just came back yesterday morning. What were you driving? Actually, I'm scared in Ferraris and all this. So I drove a Jeep. Right. Very sensible. I'm a little bit scared in that scene. But all red cars that… So this was to profile your brand as well as raise money for the charity. I'm mainly raising.

26:19It's 12 times I do this tour anyway because I really believe in Cash and Rocket and I'm really believing women putting each other together to change the world. So, yes. But Astra has sponsored it. So now I'm having so many connections. New York is my new destination. New York. I'm going to New York in May to open a store, yeah. Oh, good luck with that. So will that be your second store? no i've got two in dubai oh so these are these are not concessions they're actual stores they're actually stores so i've got one in london i mean in windsor it's a proper shop yeah two in dubai i'm opening one in paris on the 15th of june and now new york hopefully in may fantastic so that's rapid expansion so are you able to finance this now through revenues or are you gonna have to raise more money no we've been really successful right because we are actually I think the more people understand the lab ground space, the more some people fell in love with it because they want to wear, you know, sustainable as well.

27:17And also because they can get bigger stones. There's nothing we can do with lab ground diamonds that we couldn't do. So, you know, I mentioned the fidget ring. So I mentioned color diamonds. So we can do any colors, any stones, any shape. For those that can't see Natalie, she's sort of pointing at some rings and bracelets that from where I sit are sparkling beautifully. Thank you. these are your products but it's because you can you can choose you can have them made bespoke as well we do a lot of bespoke pieces we do um so for example we did the first necklace in the world that you can wear in seven different ways so it's basically detachable so it can become earrings necklace bracelet so when you travel you can only take one set oh i see travel the world so these are things that you you know actually i've got a funny jokes about that so there is um One of my first clients, very famous person, so I'm not going to say who it is, but got married for the third time.

28:13And he got married with a Chinese lady. And she wanted 8.88 carats. Because eight is the lucky number.

28:24Interestingly, he had no limit with his budget. Interestingly, he went to graph the beers everywhere. They can do the first eight, no problem. the second eight yes but the third was impossible because the risk margin in the mine industry with the price of those diamonds was far too high right so we did it in six weeks for much cheaper actually i should have charged much more at a time but uh so you made an 8.88 lucky so we can't do anything with lab ground diamond there's no shape color anything we can't do right technology is an amazing tool so so you you you're quite dependent though i think on these manufacturers that's correct yes so have you have you forged a relationship with one in particular or how do you manage that side of this because okay you need a good supply line yes we need a very good supply line and we need to check everything as well so um i separated originally i were made in Dubai, Alfa made in India.

29:27And the way I did it is I opened my own company in Surat. As I said to you, all the polishing and cuts are happening. We put gemologists there who went and chose basically each stone one by one between all the suppliers. So you have a lot of different people you source from. Much safer. Yeah, that's what I was thinking, because otherwise you're at risk of them putting the price up or supply line disruption which I imagine might have happened in Dubai recently with the war it's been Dubai Dubai has been a very so Dubai was booming for us in December January February but obviously since March is a different market yes yes um but you know what is interesting actually the quality is the most important things for me right so um I want to grow with the top quality in the world.

30:18So as I said to you, we do the 1 % of the diamonds in the world, which correspond to the DNE color, right? Now I go even further. I do the 0.01 % in terms of quality by adding some certification to the diamonds. So we can now achieve a level which has never been seen before. Right. So this must be appealing to a certain category of customer. That's correct. And it's called lab-grown diamond. And everybody says to me, but that's such an ugly name and i said but you know what is the name mobile phone nice no and we all have one yeah sort of caught on didn't it yeah that's a very good observation the mine industry has tried for years to say but they are fake but they are not fake and they are called lab yes and we should promote the fact that they are lab so astray was one of the first company to say they are lab ground diamond and we are proud of the fact that they are lab ground diamond so how do you see your business developing from here i mean you're opening new shops yeah what are your ambitions for the business so we should be turning around three million this year uh pounds so it's growing really fast for because it was december 2023 when we started um i'm hoping that paris and new york will be a big success uh and then you know the world is ours so would you would you look to open in more cities or would you try and put more business through sort of a few key locations I think key location is important, but I also think, you know what, the world is changing so much.