The Dallas-based American Gem Trade Association is a 31-year-old nonprofit organization, dedicated to serving the natural colored gemstone industry. AGTA represents people in the United States and Canada. Its main job as an association is to promote and excite people about colored gem stones. AGTA hosts a major trade show known as the AGTA GemFair in Tucson in February and also is a significant part of the JCK show in Las Vegas. The organization is made up of gem stone wholesalers, retailers, manufacturers, dealers, laboratories etc. AGTA President Doug Hucker speaks about what's happening in the association and in the industry on the colored gem stone front, explains why we can’t have a Kimberley Process with colored gem stones and shares his observations for the 2012 holiday shopping season in his exclusive interview to Rough&Polished.
Please tell us what’s new with the American Gem Trade Association these days. What’s happening at the moment?
We have become the voice of the colored gem stone industry, both nationally and internationally. We’ve got about 1,250 members right now. Our job as an association is really to promote the products for our members. We do that a number of different ways. One of the ways that’s very successful in terms of marketing and promoting colored gem stones is the Spectrum Competition that we just completed. When AGTA got started we decided that we wanted to have a colored gem stone design competition as a way to promote our products. We started it about 30 years ago and it has developed into the most important colored gem stone competition that there is.
It’s unique in that it’s one of the only design competitions in the industry that actually requires people to make the jewelry. We had about 500 entries this year.
I would say that the competition itself, the spectrum awards and the followup interest that it develops in our work on the red carpets, like at the Oscars and the Emmys and the other red carpet events, is probably one of the most successful vehicles we’ve seen for the promotion of colored gem stones.
What are the main goals of AGTA nowadays?
We want people to become excited and to buy more and own more colored gem stones. We do that a number of ways. We produce point of sale materials. We have an education course. We have consumer website. We have an industry website. We produce a source directory which is a listing of all of our members that goes to 20,000 people in the industry and is also available online. If you’re looking for a colored gem stone that’s the bible that you go to.
We also promote ethics and professionalism. When you talk to people who join our association, whether they’re a wholesaler or a retailer, the rationale is normally pretty consistent. Wholesalers like to have access to the marketplace. In other words, the credibility of the American Gem Trade Association, they like to show in our shows in Tucson and Las Vegas and in New York. They like that marketplace, but they also like the ethical stance that AGTA takes about full disclosure, professional practices and ethics. When you talk to retailers, that is also one of the primary reasons they become a member of AGTA and that is they agree with and support the ethical professional approach that AGTA requires of its members.
Speaking of ethics, in light of the recent Kimberley Process meeting in Washington in November, do colored gem stones need an organization similar to the Kimberley Process to prevent conflict gem stones from entering the legitimate trade? Do you think it would be an effective conflict prevention tool for the colored gem stones as well?
Yes and no. The concept of the Kimberley Process is to have a transparent supply chain to minimize the presence of materials coming from conflict regions. That’s about the shortest description of Kimberley Process you’ll see. Obviously there are issues that rise with colored gem stones that need the same type of approach. Unfortunately, I always like to say you can’t have a Kimberley Process with colored gem stones, because there are too many significant differences that occur. If you’re asking me do I think there should be a work to provide a more transparent supply chain and work towards the elimination of bringing gem stones in from areas that are using child labor or conflict, yes I do.
The Kimberley Process is a very significant process where member countries, producing countries, sign on. They agree to a series of protocols whereby the rough diamonds are packaged. They have documentation that goes with them. They’re sealed. They travel around the globe and then there’s a series of warranties that follow with it. Because of the diversity of the colored gem stone industry and the fact that so little or almost nothing in the colored gem stone industry is produced by major mineral extraction companies, you do not have the organization, you do not have the size of companies, you do not have the resources to establish a protocol that’s just like the Kimberley Process.
We have had examples of that. In 2001 when the al Qaida attacked the World Trade Center, there were articles in the Wall Street Journal linking tanzanite to the al Qaida terrorists and it completely shut down the tanzanite business. We worked for an entire year making trips to Africa, working with the State Department and I chaired a taskforce that designed what’s called the Tucson Tanzanite Protocols. That is a very similar process to the Kimberley Process where when materials, tanzanite is exported from Tanzania, it is exported with particular documentation, and that documentation leads to a series of warranties that follow the material throughout the market chain. Overall while we are constantly looking for ways to improve conditions in producing countries and make sure the supply chain is transparent and without threat, a “Kimberley Process” is not anywhere near as workable with colored gem stones as it is with diamonds.
What kind of representation do colored gem stone manufacturers, dealers and retailers need in the industry today and what information do they seek?
The first thing is that the manufacturers need to have a consistent supply of quality material from sources that they trust. Some of them buy overseas, some of them do not, but with the proliferation of treated materials and new materials coming in the marketplace, one thing the AGTA provides is a source of material that these manufacturers and retailers can trust when they buy, that they’re getting what they say they’re getting and there’s full disclosure of treatments. They can buy with confidence from an AGTA dealer.
What the retailers need more than anything else that we’ve seen is help in their marketing and education. We produce a number of point of sale materials, brochures about how to buy colored gem stones, brochures about treatments. We have a number of peripheral materials that you can look up on our website that allow for jewelers to work better at the counter with customers, but we also have an online sales training course on colored gem stones. We have seen that that is something that the industry really has responded to because they really like it. They need it.
We have been very successful working with reality shows and red carpet events to get colored gem stones on people.
Where five years ago after our competition was judged, we would take the jewelry and photograph it on models and then put it on the covers of magazines and into consumer media. The last couple of years we’ve gotten television celebrities involved because they see the value of it and the competition is better known. This year we worked with Morena Baccarin who is on Homeland. She was voted the most beautiful woman in the world by Vanity Fair magazine. Working with a higher level of celebrity has really generated a lot of increased interest in color. You’re seeing more stories about color. You’re seeing color on the runways so it’s really something that is fun. I can’t take all the credit for it, but I think that AGTA has been involved in pushing it, let’s put it that way.
Can you tell how popular colored gem stone jewelry is in the United States or Canada today or if there is any sales forecast for this type of jewelry that you could share with us?
That’s a difficult question, because again, unlike diamond jewelry, with colored gem stones the data is nowhere near as precise because you’ve got hundreds of different kinds of colored gem stones. Colored stone jewelry is increasingly becoming a larger and larger percentage of retail business. It certainly represents the largest margin available in the different categories in their business which is one of the reasons people are turning more to it.
How is the preparation for your show in February going on?
Very well. I’m very excited. The show is not sold out at this point, but the floor is very full. We are introducing some new things this year. Many of the people that come to Tucson are looking for classes to help them make jewelry, tools to help them make jewelry, so we have introduced a new pavilion at our show called a Tools and Technology and Equipment Pavilion. There’s been a big uptick in manufacturing in the retail jeweler sector because it’s just something that is more affordable for them if they manufacture it themselves. We’ve expanded our educational classes. We’re going to have lots of demonstrations on how to make jewelry. We’ve expanded considerably our designer pavilion. Many people think of Tucson as being just a loose gem stone show, but there’s a significant amount of our members that do show a finished product and we have a designer pavilion that has close to 40 different designers in it.
How many exhibitors are you expecting at the show this next year?
Maybe between 400 and 425.
What’s your outlook for this holiday shopping season?
What I do as I’m talking with jewelers around the country and I’m talking with wholesalers around the country. I don’t say, “How’s your business?” I say, “On a scale of 1 to 10, where’s business right now?” It’s a little early for retailers. Now is the time when they’re really getting geared up, but they’re very optimistic and to this point they’re pleased about the business that they’ve done this year. Our business has shrunk. It has contracted significantly in the past three years, but I think those people that are still in business are in pretty good shape and they’re very pleased about the results that they have seen to this point.
The manufacturers and the wholesalers I’ve talked to give it a 7 or an 8 and sometimes a 9 in terms of what their business is right now. Of course the people I talk to are predominantly colored gem stone manufacturers and colored stone dealers, but people are very optimistic about the way things are progressing at this point. Our show, because it occurs in February, is like the first opportunity for people to see how it’s going to go because the jewelers have finished up their major selling season, it’s time for them to restock, so people come to our show and it’s the first opportunity that everyone has to see just how things actually went. Our registrations are strong. Our show, in terms of our booth sales, they’re up 5% from last year and everyone seems to be quite positive. I’m looking for a good show.
Olga Patseva, Editor in Chief of the American Bureau, Rough&Polished