According to Better Homes and Gardens, sanding sugar is a decorating sugar with clear crystals that sparkle. It is a popular decor for baked goods because it does not melt in the oven and is available in many colors. Sanding sugar is found in grocery stores, craft stores and online.
Baking Bites provides instructions for making sanding sugar at home. It is best to start with a large-grain organic sugar, because it resembles the texture of the commercial version. Stir liquid food coloring into a bowl of the sugar a few drops at a time until the desired color is reached. Allow the sugar to dry thoroughly, and then store it in a tightly sealed container.