Coloring sugar is an innovative way to decorate any of your baked items. Whether they are cakes, cookies, deserts or rolls, sprinkling colored sugar over them would make them look out of this world. Colored sugar is used extensively in bakeries. Coloring sugar is a simple process and all you need is a good quality liquid coloring, wax paper, a spatula and sugar granules. Spread the granulated sugar thinly on the wax paper; add a drop of food coloring and mix using the spatula till all the sugar has absorbed the coloring. Add food coloring to get the desired results. Food coloring needs to be added in drops not more than a drop each time. Colored sugar can be stored in air tight containers at room temperatures or used instantly. You can use different colors to create a rainbow of colored sugar granules to decorate your baked items.