Measure the rice cereal into a large mixing bowl and set aside. Line two large baking sheets with parchment paper.
Combine white chocolate chips and butter in a microwave-safe bowl. Microwave in 30-second intervals, stirring after each, until completely melted and smooth (about 90 seconds total).
Divide the melted white chocolate evenly among 6 small bowls (about 3 tablespoons each). Add a different gel food color to each bowl using a toothpick, stirring until the color is vibrant and evenly distributed.
Working with one color at a time, pour the colored chocolate over 1.5 cups of cereal in a separate bowl and gently fold with a spatula until every piece is coated.
Transfer the coated cereal to a gallon-sized resealable bag, add about 1/3 cup powdered sugar, seal, and shake vigorously for 30 seconds until all pieces are covered in a white powdery coating.
Spread the coated cereal onto the prepared baking sheet in a single layer. Repeat steps 4-5 with each remaining color.
Let all colors cool and set for 10 minutes at room temperature, then gently toss all the colors together in a large serving bowl.
Store immediately in an airtight container, or serve right away for maximum crunch and color impact.
