Spirulina has been consumed by people for centuries due to the highest concentration of proteins, vitamins and minerals in it. Recently this blue-green alga has emerged into a colouring agent. This was approved by FDA, a few months ago.
The primary pigment in spirulina is a protein called phycocyanin. This gives the cyan or blue colour to the algae. This colour can be mixed with other colours like yellow, to get a variety.
Thus, spirulina finds its place in every eatable including confectioneries such as frostings, ice cream and frozen desserts, puddings, beverage mixes and powders, etc.
On the dietary supplement side, spirulina is used as a nutraceutical agent. Valensa International(Eustis, FL) has taken a step in developing a spirulina ingredient that is more concentrated in the blue pigment. This blue pigment has been approved by FDA to use as a colouring agent.
Though it is widely used in a variety of foods there are some limitations. In some cases spirulina is not stable such as in beverages and care must be taken while adding in yogurt to check if any reaction takes place. (see full text)