Tutorial Thursday – How to Dye Wool using Kool-Aid. | Natural Kids. Many of us prefer Kool Aid to chemical dyes because it is safer, requires no extra . fun about fruity smelling roving and yarn, and it will dye any protein fiber.. Food color drops, and Wilton's paste are also used for dyeing wool, but how do you. Kool-Aid colors are bright! If you dye over white wool, your colors will be neon- like in intensity. I like to dye over taupe or gray to tone down the brightness.