Combine first 3 ingredients in a large bowl; beat at medium speed with an electric mixer 5 to 6 minutes or until icing is firm enough to pipe, but still of spreading consistency, adding a few drops of additional water if necessary for right consistency. Divide icing into small bowls, and tint each by dipping a wooden pick into paste coloring and stirring it into icing until desired color is reached. Icing dries quickly; keep it covered at all times.

Spoon icing into zip-top plastic freezer bags, and snip a small hole in 1 corner of each bag.