The Diamond Already Fell. Leather Is Next.

Or so the argument goes. The evidence is more interesting than that, and considerably less comfortable for everyone involved.

The case is usually put like this. A laboratory learned to make something that luxury had spent a century insisting could only be dug out of the ground, and within a decade the story collapsed. Leather, the reasoning continues, is simply next in the queue. Mushrooms are already being turned into handbags. Give it ten years.

It is a tidy argument, and the first half of it is entirely correct. The second half misunderstands what actually happened to diamonds, and the misunderstanding matters, because the mechanism that destroyed the diamond premium is largely absent from leather. Where it does exist, almost nobody is looking.

What actually happened

The numbers are worth stating plainly, because they are more dramatic than most people realise.

In 2018, laboratory-grown stones accounted for around three percent of centre stones in American engagement rings. By early 2026 the figure had reached roughly fifty-two percent. A one-carat lab-grown diamond averaged about $3,410 per carat in 2020. By May 2026, the average had fallen to around $564, roughly a sixth of the price in six years. Wholesale prices dropped somewhere between seventy-four and ninety percent depending on whose index you accept, and De Beers itself has described lab-grown wholesale jewellery prices as tracking toward cost plus.

The consequences for the incumbent were severe. Anglo American wrote down De Beers by $6.8 billion across three consecutive years, the business posted a $511 million EBITDA loss in 2025, and in January 2026 the company cut official rough prices for the first time in over a year, having previously sold discounted stones privately while maintaining list prices around twenty-five percent above the market.

The company that invented the modern diamond is now being written down by its own parent.

The mechanism, which is the part that matters

Now, the crucial question. Why did this particular substitution work when so many others have not?

Because it was not a substitute; a laboratory-grown diamond is a carbon crystal, identical in structure to a mined stone, rating ten on the Mohs scale, and reading as diamond on every standard tester. It is not an alternative to a diamond. It is a diamond, produced by a different method, and no expert with an instrument can tell a buyer otherwise.

That single fact did all the work. The diamond premium had never rested on beauty or rarity, both of which were manufactured, but on the impossibility of producing one. Remove the impossibility and the entire edifice has nothing underneath it.

A second lesson is more painful. De Beers launched Lightbox in 2018 at a flat eight hundred dollars per carat, precisely to demonstrate that laboratory stones were cheap and trivial. It closed the brand in May 2025. The pricing strategy intended to discredit the category instead taught consumers exactly what these stones cost to make, and then legitimised them by putting the industry’s most authoritative name on the box.

You cannot cheapen a rival product without also telling everybody the price.

Why leather is not diamonds

Apply that mechanism to leather, and it does not transfer.

Mycelium materials, grown from the root structures of fungi, are not leather produced by another method. They are a different material with different properties, different ageing behaviour and different wear. They may be beautiful, and in the case of the Hermès collaboration with MycoWorks, which produced a version of the Victoria bag using a grown material finished with traditional French tanning, they are demonstrably capable of sitting inside a luxury product without embarrassment. But nobody can claim they are hiding, and a buyer with a magnifying glass can tell.

The market has been unsentimental about this. MycoWorks, the most advanced company in the field, which had opened a commercial-scale plant in South Carolina and raised well over a hundred million dollars, became insolvent in late 2025 and was liquidated through an assignment for the benefit of creditors. Bolt Threads, whose Mylo material appeared in a Stella McCartney bag, had already wound back its ambitions. The mycelium materials market was worth around twelve million dollars in 2024, which is a rounding error against global leather goods.

This is not evidence that biomaterials have failed. It shows they were never doing what everyone assumed. A substitute competes on preference and price, and preference is exactly where the leather premium is strongest. Nobody buys a calfskin bag because hide is technically superior to every alternative. They buy it because of what a calfskin bag means, and a material with better sustainability metrics does not displace meaning.

Where the diamond logic actually applies

Which brings us to the part of this story that receives a fraction of the attention.

Cultivated leather is not an alternative material at all. It is genuine animal leather, grown from animal skin cells in a bioreactor, chemically and structurally identical to hide. VitroLabs raised forty-six million dollars in 2022 from a group including Kering, Bestseller, Khosla Ventures and Leonardo DiCaprio, with Kering continuing to support quality testing, tanning and finishing. Other companies are working on the same problem in Singapore, the Netherlands and the United Kingdom.

That is the diamond situation exactly. Same substance, different origin, no instrument that can produce a meaningful distinction.

It is also nowhere near commercial scale, which is why the coverage is thin. But it is the only development in this field that carries the structural threat, and any luxury house reading the diamond collapse as a cautionary tale about mushrooms has read the wrong lesson entirely.

What a house should take from this

Three things follow, and the third is uncomfortable.

The first is that a material premium survives only where the material cannot be reproduced. Every scarcity story that rests on a physical property is, in principle, on a clock.

The second is that the incumbent’s response matters enormously. De Beers had two options: ignore the category or brand it. It branded it, discovered it had legitimised a competitor, and withdrew seven years later at a substantial loss. A luxury house launching a cultivated leather line to prove that cultivated leather is inferior would be making precisely the same error. It could read the whole case study in an afternoon.

The third is the one nobody in the industry says aloud. Diamonds were exceptionally vulnerable because the product was pure material and nothing else. A diamond has no atelier, no cut that only twelve people can execute, no fifty hours of hand-stitching, no maker. It was a stone with a story attached, and when the stone became reproducible, the story had nothing left to hold on to.

Leather goods are not in that position, and their protection is not the hide. It is everything done to the hide afterwards, by people, slowly, in a building with a name on it.

Which suggests the houses best insulated from what is coming are the ones that have spent a century talking about their workshops rather than their raw materials. They were not being sentimental. They were, whether they knew it or not, diversifying away from the one thing a laboratory can copy.