Finding powder colors is not as easy as going to your local grocery store or even craft store. Because there is no liquid, or other ingredients diluting the color, you will experience the strongest form of food color, according to Chef Rubber.
Both powders can be used by mixing in with other ingredients, or simply using a brush to dust on the color.
POWDER COLOR APPLICATIONS:
Fat dispersible powders are normally used in any fat-based application. What does that mean? Things containing higher fat content, may not mix well with water soluble colors that require a water-based liquid.
Butter, shortening, cocoa butter, chocolate, etc. are the perfect carriers for these colors.
Fat dispersible powders are matte and opaque in appearance and can be used to:
Color: chocolate, butter cream, cocoa butter, butter, etc
Dust: Color dust chocolate, cookies, cakes, fondant, modeling chocolate, etc.
Paint: Mix with a fat liquid like cocoa butter to paint on fondant, modeling chocolate, and chocolate moulds.
This is the highest form of color potency available. You only need a speck of color to start building the desired shade (remember to start small). These colors develop overtime and can become immensely stronger and more vibrant.
Water soluble will not work for coloring fat-based items like chocolate and cocoa butter.
These are great for macarons, fondant, royal icing, sugar, gummy candies, etc.
Water soluble powders are not as opaque and are not matte like fat dispersible powders. The color appears when they are dissolved and absorbed in a liquid solution.