A ready-to-eat cereal that is capable of changing color upon immersion into an aqueous medium such as milk. The cereal base has a non-dispersible first color. The cereal base has a coating comprising cornstarch, powdered sugar, and optionally food coloring. The coating is of a second color different from the first color and is in a quantity sufficient to obscure the first color. Preferably, glycerine is used to adhere the coating to the cereal base. Two methods of making the ready-to-eat cereal of the invention are also provided.