In medium bowl, beat meringue powder, water and vanilla extract with an electric mixer on medium speed until just past frothy and small peaks are forming.
Reduce speed to low, gradually beat in powdered sugar until soft peaks form, about 1 minute.
Divide icing into different bowls and add food coloring. Gentle stir with a clean spatula. Spoon into icing bags
OPTIONAL: Let icing rest for 30 minutes to allow air bubbles to escape naturally
Notes
Keep icing covered with a wet kitchen towel at all times.
Allow 1 to 2 hours for decorated cookies to dry.
Keep any leftover icing in a plastic bag with the air pushed out. Icing should be kept frozen or at room temperature.