Tetley bags the limelight and tries to make a cuppa trendy

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Tetley is planning to launch a chain of branded tea bars after trials of a store concept in Manchester. The move could put Tetley in a head-to-head battle with US coffee bar chain Starbucks and Whitbread-owned Costa Coffee.

Despite being owned by Indian tea giant Tata, Tetley is still widely seen as an old-fashioned English brand, and was the first to launch the tea bag in the UK in 1953. Called "Gaffers", the original standalone Tetley outlet sold a range of tea and non-Tetley food products with décor and branding based on Tetley's cartoon tea-folk characters.

The future of the tea folk has been in doubt since Tetley called a review of its advertising earlier this year, but their use in future campaigns has not yet been ruled out.

The Manchester outlet based in the Royal Exchange shopping centre first opened in 1998 but closed earlier this year. Tetley insists that was always the intention and that the outlet was designed to test the market. "We believe there is potential for branded tea outlets. We are reviewing how best to assess the opportunities. We'll be exploring all the options," said a spokeswoman for Tetley GB. "The original restaurant opened as a pilot outlet just to provide understanding of the sector."

Tetley would be just the latest in a number of consumer products companies seeking a slice of the out-of-home drinks market. Nestlé-owned coffee brand Nescafé already has a high-street presence via branded sections in other stores, including the easyEverything internet café chain owned by Stelios Haji-Iaonnou's Easy group.

Unilever Bestfoods also operates a number of ch'a Tea bars selling a range of hot and cold teas, and is currently looking for further premises.

The market for branded coffee shops is worth around £65m and has grown 16-fold in the last seven years, according to a report this year by consumer research group Mintel. Competition in the sector is hotting up, with the number of branded shops expected to grow from 600 to 2,500 over five years. In this climate the major players are looking to differentiate themselves. Using identifiable branding such as the tea folk could be a way of standing out.