From Biosun FFI Wiki

Annatto is a derivative of the achiote trees of tropical regions of the Americas, used to produce a red food coloring. It is extracted from the redish pulp that surrounds the seeds of the outer layers from the Bixa orellana shrubs.

Annatto colorant is prepared by soaking the seeds and applying friction using various solvents, including vegetable oil, fats, and aqueous alkali solutions. The pigments in Annatto are a mixture of bixin and norbixin. Bixin is oil soluble and norbixin is soluble in water. Degradation is increased by exposure to light and oxygen.

The usage level for Annatto depends on hue, intensity and customer requirements. It can be used in cheese and a variety of food products such as ice cream, dairy products, sugar confectionery, cereals, snack foods, and seasonings.