The earthy flavor of the small annatto seed is prized in Hispanic cuisine. Annatto's scent is slightly peppery, with a hint of nutmeg, with a slightly sweet and peppery flavor. Annatto is used in Latin America and Caribbean cuisines, as both a coloring agent and for flavoring.
Annatto is the seed of the achiote [or "Lipstick"] tree. Native to Brazil, annatto was originally used in Central and South America not as a spice, but for body paint, insect repellent, and to ward off evil. In India, annatto is called sindoor, and is considered auspicious for married women, who wear it along their hairline. Brick red and slightly bitter, annatto imparts a distinctive flavor and rich yellow-orange color to recipes.
Annatto is widely used in the Caribbean and Latin America, especially in the cuisines of Guatemala and Mexico. Annatto seeds are also particularly associated with Filipino cuisine, in pipian, chicken and pork in an annatto oil sauce. Whole or ground annatto seeds are tasty additions to rice, beans, meats, stews, soups, and tamales.
Annato is sometimes called "poor man's saffron", a good substitute for saffron's golden coloring, at a fraction of the cost. It does NOT, however, duplicate saffron's unique flavor!
Another popular use for annato seeds is to make achiote oil. Cook the seeds in hot oil until their skin dissolves. When the oil turns bright yellow, discard the seeds and use the oil for cooking.
The seeds can also be ground with garlic and any variety of chili peppers for adobo paste.