I tried mixing it (food coloring) with water and alcohol. The water mixture raised the grain on the wood which required extra sanding. The alcohol method did not raise the grain as much and did not require me to go back and re sand and evaporated quickly.
The con is that both methods unless sealed with a clear sealer (spray lacquer or shellac) would allow the coloring to come off on my hands when handled and i had one parent contact me and tell me that her daughter had a purple mouth as the coloring came off when she had a piece stuffed between her lips.
I no longer use food coloring...I prefer acrylic paints..however i have just gotten some dyes from a newer company
http://kedadyeinc.com/ Waiting for it to get a little warmer here in Montana to give these a try.