Annatto or achiote, comes from Bixa orellano, a tree native to the Americas. While the tree is believed to have originated in Brazil, it spread throughout Latin America very early. The pulp surrounding the seeds of this tree produce a dye that varies from reddish to yellow. It was most likely originally used as body paint and lipstick, and then later became a food coloring and flavor. Because of its early uses, it has been referred to as the lipstick tree. It is now grown and used in Asia.
The heart-shaped fruits of the tree become reddish-brown when mature. The fruits split open, exposing the seeds. The fruit itself is not edible; the seeds inside the fruit are what are used. The seeds have a mildly sweet, peppery flavor.
The dye created from achiote is made by stirring the seeds in water. It is regularly used as to color cheddar and other cheeses, in margarine, butter, and in culinary applications such as coloring rice or as a flavor in smoked fish. It is also used extensively as both a flavor and coloring in Latin American cuisine, especially Mayan foods from the Yucatan south through Guatemala, and in indigenous dishes in Brazil and Venezuela. Annatto is also used as an insect repellant and sunscreen in tropical America.
Despite its regular use as a food coloring, it causes an allergic reaction in some people. In fact, it is considered the only natural food coloring that causes a reaction similar to reactions from artificial colorings.