Homemade Rainbow Chip Frosting Recipe

5 from 7 votes

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Turn any frosting into homemade rainbow chip frosting with two simple ingredients. This colorful frosting is perfect for topping any cakes or cupcakes (and more) to celebrate any occasion!

WHAT IS RAINBOW CHIP FROSTING?

From a what-you-can-buy-at-the-grocery store standpoint, rainbow chip frosting is a flavor of vanilla frosting swirled with colorful chips made from white chocolate. The beauty about making it at home, though, is that you can actually turn any frosting into rainbow chip frosting, which is what we’re going with this homemade rainbow chip frosting recipe.

The recipe you see below makes traditional vanilla buttercream, but in the first step of making the buttercream, you’ll see suggestions for turning any frosting recipe into rainbow chip frosting.

THE PROBLEM: RAINBOW CHIP FROSTING IS DISCONTINUED

Believe it or not, Betty Crocker launched Rainbow Chip frosting in the mid 80’s, but unfortunately discontinued the product in the summer of 2013.

Since then, folks have turned to Pillsbury’s Funfetti frosting as a substitute, but in reality, nothing beats those little rainbow chips. Rainbow sprinkles are an ok replacement for the real deal, but when it comes to that smooth, white chocolate flavor and the melting of the white chocolate in every bite, there is no other choice than to make homemade rainbow chip frosting.

Rainbow chip frosting in the glass bowl of a stand mixer with a spatula.

Lucky for you, this recipe for rainbow chip frosting is so simple, and you’re going to love making rainbow chip cake, rainbow chip cupcakes, and putting this fun rainbow frosting on everything from birthday cakes to frosted sugar cookies to take any celebration to the next unicorn level.

INGREDIENTS TO MAKE RAINBOW CHIP FROSTING FROM SCRATCH

The ingredient list for this homemade rainbow chip frosting is short. You only need 7 ingredients, and one of them is food coloring!

Aerial photo of ingredients to make homemade rainbow chip frosting with text overlay.

For this rainbow chip frosting recipe, you will need:
• high-quality white chocolate
• food coloring in desired colors (I prefer gel coloring– linked in the recipe below)
• unsalted butter
• powdered sugar
• milk or cream
• vanilla extract
• salt

CAN I USE CANDY MELTS FOR THE RAINBOW CHIPS?

We’ll be using the white chocolate and food coloring to make the rainbow chips, because white chocolate actually has delicious flavor alongside a smooth, melty texture. While I do love candy melts in my cake pops recipe, candy melts harden to a much firmer texture, and we want these little magical rainbow chips to be smooth and melt in our mouths with every bite.

You will want to make sure you’re using baking chocolate that comes in a bar or vanilla melting wafers. I prefer Ghirardelli or Baker’s brand whenever I am melting chocolate.

HOW TO MAKE RAINBOW CHIP FROSTING

There are two portions to this rainbow chip frosting recipe, and while it might seem like a lot of work, the rainbow chips can set up while you make the buttercream.

MAKE THE HOMEMADE RAINBOW CHIPS

STEP #1

Start by melting 4 ounces of white chocolate until it is nice and smooth. Always take care to do this slowly as white chocolate tends to seize (we’ll talk about how to handle this in a second but also in the “tips for success” below).

Aerial photo of a bowl of white chocolate melting wafers.

STEP #2

Next, separate the white chocolate into 4 small prepared bowls. I used ramekins because you want to make sure they are small bowls so the chocolate doesn’t cool too quickly.

STEP #3

Working with one portion of white chocolate at a time, add a tiny bit of color to one portion, then stir to blend.

Aerial photo of 4 bowls of white chocolate tinted blue, yellow, pink, and teal to make homemade rainbow chips.

If the chocolate starts to harden, don’t panic: simply add a few drops of vegetable oil (or other neutral oil) or a tiny bit of vegetable shortening to bring it back. You may have to heat it again ever so slightly to encourage smoothness, but don’t heat it too much or too quickly, or it will seize again.

STEP #4

Once your white chocolate is colored, spread it into a thin layer on a lined baking sheet. My rectangles were about 6″ x 4″ but this does not need to be exact. You just don’t want the chips to be so small that they are paper-thin.

Rectangles of colored white chocolate to make homemade rainbow chips.

When all of your colors are spread onto the baking sheet, pop the baking sheet in the fridge so the colors can set up while you make the buttercream.

MAKE THE CREAMIEST HOMEMADE VANILLA BUTTERCREAM RECIPE

STEP #5

To get started on the frosting, beat the the butter on medium-high until smooth.

STEP #6

Turn the mixer to low, then slowly add the powdered sugar and mix until everything is combined. Add the vanilla extract, milk or cream, and salt, increase the mixer speed to medium and beat until combined.

STEP #7

Turn off the mixer and use a spatula to stir the buttercream by hand to remove air bubbles and make it smooth and creamy. This usually takes about 3-5 minutes.

Aerial photo of vanilla buttercream before stirring to press out all of the air bubbles. — Vanilla buttercream straight from the mixer.

Aerial photo of vanilla buttercream in a bowl after stirring all the air bubbles out. — Vanilla buttercream straight from the mixer.

This will remove air bubbles and make it smooth and creamy, Bonus points, it only takes about 3-5 minutes and will make a giant difference in the aesthetic of your buttercream.

ADD THE RAINBOW CHIPS TO THE VANILLA BUTTERCREAM

STEP #8

Remove the colored white chocolate from the refrigerator, and chop each color into very small pieces to create rainbow chips.

Chopped colored white chocolate to make homemade rainbow chip frosting.

STEP #9

Once you have all of the chips chopped, mix them together, then add desired amount to the vanilla buttercream keeping in mind that you will wind up with about 1 cup of chopped colored white chocolate, and this homemade rainbow chip frosting has the best distribution of chips with about ¾ cup of the chips.

White chocolate rainbow chips in a bowl of vanilla frosting to make homemade rainbow chip frosting.

A bowl of homemade rainbow chip frosting in a glass bowl with a spatula.

In my experience, adding in the very tiny flecks that come with chopping any kind of chocolate tend to bleed into the white frosting because they start to dissolve with the moisture of the frosting. Try to leave those tiny pieces out and keep them in the ¼ cup of chips you don’t add to the frosting but rather use for sprinkling on top of the frosting like you would sprinkles.

CAN I USE ANY FROSTING BASE FOR THIS HOMEMADE RAINBOW CHIP FROSTING?

YES, you can absolutely use any frosting recipe base for your rainbow chip frosting. In fact, I turn my favorite cream cheese frosting into rainbow chip cream cheese frosting for my funfetti cinnamon rolls recipe.

While rainbow chips would work best with a white or light colored frosting, there is no reason you couldn’t make a chocolate rainbow chip frosting, just understanding the colors won’t pop as much against a darker background.

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WHAT SHOULD I SPREAD RAINBOW CHIP FROSTING ONTO?

If you’re going the sprinkle/birthday/confetti/funfetti route, please allow me to direct you to my favorite funfetti recipes that would be top notch with some extra rainbow happening on top!

WHAT IF I NEED A SMALLER BATCH OF HOMEMADE RAINBOW CHIP FROSTING?

I do not recommend making any less than 4 ounces of rainbow chips, as 1 ounce per color is the minimum amount of white chocolate I would suggest using to avoid making too concentrated of a color that would cause the white chocolate to seize.

If you want to make a smaller batch of rainbow chip frosting, I recommend making the 4 ounces of white chocolate rainbow chips, then using a smaller portion of the chips. Since there is no rainbow chip amount written in stone for this frosting recipe, you can be the judge of how many rainbow chips to actually add.

Someone is using a spatula to spread rainbow chip frosting onto rainbow cinnamon rolls.

While I would not recommend adding the entire cup of rainbow chips to a smaller batch of frosting, you are the judge and you know your tastes! You can always add more, so start with a small amount and go from there.

TIPS FOR SUCCESS

TIP #1

DO NOT USE WHITE CHOCOLATE CHIPS: you need very smooth white chocolate to get the smoothest white chocolate rainbow chips. White chocolate chips contain stabilizers that will not lend well to melting + coloring.

TIP #2

DON’T PANIC IF YOUR CHOCOLATE SEIZES: a small amount of vegetable oil or vegetable shortening can do a lot to seized chocolate. And guess what? Even if your chocolate isn’t silky smooth after coloring it, it will still spread just fine and you won’t be able to tell it had any issues after it’s all chopped up and floating around in that buttercream. Work slowly, be patient, and don’t panic.

TIP #3

DON’T USE THE TINY PIECES OF CHOPPED CHOCOLATE: the very tiny flecks of colored white chocolate will start to dissolve in the frosting, possibly tinting your white vanilla buttercream. Keep this in mind when you are tempted to add every single bit of chopped chocolate to the frosting. Try to reserve the tiny flecks for adding color to the top of the cake or whatever treat you’ve made.

RAINBOW CHIP FROSTING FAQS

Betty Crocker themselves have said they discontinued Rainbow Chip because they “believed that consumers wanted the chips on top, not in the frosting.” Our grocery store loss is actually our home baking kitchen win!

The rainbow chips in homemade rainbow chip frosting are made from melted white chocolate that has been tinted to desired colors.

Rainbow Chip and Funfetti are proprietary names/labels for products, and they are quite different. Rainbow Chip is actual white chocolate candy pieces that have been colored whereas Funfetti is simply where sprinkles have been added. They are sometimes synonymous, but they actually represent two very different approaches to adding color to baked goods!

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5 from 7 votes

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