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1. Combine water and food color in small bowl or small jar with cover or re-sealable plastic bag. Add coconut; toss with fork or shake closed jar or plastic bag until coconut is evenly coated.
2. Microwave marshmallows and butter in medium microwave-safe bowl 30 seconds at HIGH (100%); stir. If necessary, microwave an additional 15 seconds at a time, stirring after each heating, until mixture is melted and smooth when stirred. Stir in tinted coconut.
3. Line tray or cookie sheet with wax paper. Drop coconut mixture in 12 equal mounds onto prepared tray. Shape coconut mounds with moistened fingers into small nest shapes. Cool completely. Allow to air dry until slightly hardened. Fill with milk chocolate eggs. 12 candies.
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