During 2023 the diamond industry faced significant macroeconomic headwinds from high interest rates and recession concerns in the U.S., the leading global market for diamond jewellery, and economic woes in China, normally the second largest market for diamonds. More significant was the disruption to the natural diamond market due to the expansion of the Lab Grown Diamonds (LGD) last year. Polished natural diamond prices weakened for most of the year through to October, as the aforementioned combined headwinds and LGD disruption took their toll on demand. Prices of rough natural diamonds for the most part remained stable. Firm rough prices and decreasing polished prices impaired margins for our key midstream polishing customers, who substantially reduced the quantities of rough diamonds bought (DeBeers sales plummeted by 40% in 2023) and subsequently their manufacturing activities. Though our sales of capital equipment were impaired, over 35.5 million stones were scanned using our installed base of 830 Galaxy® family systems throughout the year, actually slightly more than in 2022, notwithstanding the lessened midstream polishing.
Positive economic data in the U.S. towards year-end 2023 paused interest rate increases and raised expectations for eventual easing, reducing concerns of a recession. Indeed, consumer confidence was buoyed in the critical year-end holiday season, with overall holiday spending some 5% higher than in 2022. Reduced inventories following the holiday season and DeBeers significantly cutting rough diamond prices at their initial sight in 2024, created the basis for a midstream recovery. Indeed, the initial DeBeers sights of 2024 evinced renewed polishing impetus.
Encouragingly, the disruption by the rapid expansion of the LGD segment in the U.S. market may have peaked in 2023. Towards year's end LGD adoption slowed significantly. We attribute this to the sustained drop in LGD production costs and the propagation of this decline to their wholesale and retail prices. Notably, Walmart offered a one carat quality LGD for US$ 599 during the holiday season, and online searches confirm prices of two carat LGD for the most part being well under US$ 2000, as compared to nearly double that figure a year or so ago. If during most of 2022 LGD sold at retail for about 50% of the cost of a natural stone, even though the wholesale price was up to 90% less, this disparity is, finally, closing. We believe this new retail price range and its dramatic drop from previously touted pricing in the span of just 18 months, demonstrably eroding LGD intrinsic value, may have affected consumer appetite for LGD, especially in the key bridal jewellery and engagement rings market segment. Similarly, negative press on the overall lack of any significant environmental benefit of LGD also seemingly dampened consumers' enthusiasm for the product. This may indicate that the natural diamond and LGD segments of the diamond jewellery market have reached, or at least may be reaching, a new equilibrium, as had been forecast by various industry analysts.
Looking Forward to 2024
Once again, Sarine has launched innovative solutions for the diamond industry by way of the application of the foremost available cutting-edge technologies, raising the bar of the state of the art. Utilising artificial intelligence (AI), cloud computing and Graphic Processing Unit (GPU aka "Nvidia") methodologies, we are redefining the art of the optimal use of rough diamond material. Our newly launched Most Valuable Planning (MVP) paradigm accomplishes completely new levels of almost complete automation, while concurrently generating significant added-value from very small rough natural diamonds 40 points and under, and will be extended up to 90 points in the second half of 2024. MVP is offered as a superior optional service augmenting our standard Advisor® planning. MVP revenues are derived from a pay-per-plan model against a per-stone application, which is, excitingly, already generating a new recurrent revenue stream. Concurrent with the extension of the MVP technology to rough stones between 40 and 90 points, we will also release the Meteor™ Plus inclusion scanning system, which will implement all the refinements and markedly enhanced throughput advantages of the Meteorite™ Plus in the Meteor™ system. These developments are expected to drive substantial additional inclusion mapping system (Meteorite™ Plus and Meteor™ Plus) and legacy planning system sales, as it bolsters our campaign against competing (infringing) parties' offerings and accelerates our penetration into the LGD-resistant market segment of small stones (LGD polishers focus on larger stones). We estimate the MVP's total addressable market (TAM) at some ~ 250 million stones annually, with an immediately addressable 33 million stones already processed by our customers in these sizes in 2023.
Our expansion into LGD drove increased revenues from our traderelated and polished-diamond services, these now accounting for an unprecedented 23% of our overall annual income for the year
In any new equilibrium for the diamond industry, LGD are expected to account for a meaningful portion of the diamond jewellery market. In mid-2022 we designated LGD as a strategic market for expansion and growth. Prior to 2023 our revenues from the LGD segment of the industry were negligible. In 2023 some 9.5% of our revenues for the year were derived from the LGD sector and we expect further significant expansion into this segment in 2024. Our expansion into LGD drove increased revenues from our trade-related and polisheddiamond services, these now accounting for an unprecedented 23% of our overall annual income for the year. Our main efforts towards growing our LGD-related revenues will come from the adaptation of our industry-leading planning abilities to LGD, as well as the continued growth of our polished LGD grading business. The benefits of our Advisor® 8.0 rough diamond optimisation software have been extended to LGD manufacturing and have proven effective. Already in February a new LGD planning service commenced operations in India, on a per-carat basis, with a major LGD manufacturer its early adopter. We are thrilled that we have yet another source of recurring revenues from a market segment currently estimated at 20 million carats annually.
Our strategic acquisition of the New-York-based GCAL lab in 2023, coupled with our implementation of AI and big-data-derived 4Cs e-Grading™, positions us to well serve the natural diamonds and LGD retail trades alike. Having integrated GCAL lab's grading procedures into our infrastructure, with the appropriate recruitment and training of personnel and acquisition of hardware, GCAL by Sarine commenced local LGD grading services in India in January, initially as a lab-based service. It offers our customers reduced grading costs and direct fast accessibility to the only guaranteed 4Cs certificate in the industry. Our LGD grading services will be extended to manufacturers as an on-site e-Grading™ capability later in 2024. Our target is to capture 8-10% of the estimated US$ 100 million LGD grading market in 2024.
Another key initiative for 2024 is advancing the ongoing penetration of our Sarine Diamond Journey™ traceability offering. Continuing demand for ESG compliance is driving implementation of our unique verifiable provenance package by additional luxury brands and other retailers. It is also the industry's only realistically scalable solution, if the new regime of the G7 countries' import limitations on Russian diamonds will require a verifiable data trace. The new Autoscan™ Plus, capable of the high-speed (~1000 stones an hour) source registration of rough diamonds, offers miners and wholesalers a scalable cost-effective means to record their stones' non-Russian origin. Buoyed by the recently announced collaboration with DeBeers' Tracr™, Sarine is at the forefront of providing a cost-effective execution of the G7 mandates, should they require factual verifiable origin corroboration. As currently announced, the restrictions are to be enforced as of September 2024 on an estimated 3 million plus polished diamonds half a carat and above in weight.
Lastly, we will continue refining our AI-derived grading and sorting capabilities for natural diamonds, where the spectrum of variance is significantly broader than for LGD. Our goals for 2024 include continuing the midstream roll-out, initially to augment the manufacturing segment's in-house internal grading capabilities, which discern the stones that go to full gemmological lab certification and serve other inventory management purposes. We will focus our marketing on the polishing centres in India and Africa, primarily.
With management focused on financial prudence and having tightened operational expending, we should see rallied shareholder value created by the growth drivers detailed above. We will continue to pursue value creation and growth, always seeking opportunities to drive our business forward. We believe that, industry conditions permitting, 2024 should be a very exciting year of revitalised growth in revenues, margins, market share, industry-wide recognition and profitability.
