In large bowl, whip Meringue Powder and water with electric mixer on high speed until soft peaks form. With mixer running, gradually add sugar. Whip until stiff peaks. Add vanilla and icing color and whip until well combined, scraping down bottom and sides of bowl as necessary. Add chopped candy and whip until combined.
Spoon meringue into disposable decorating bag fitted with Tip 1A. Pipe 2 in. diameter circles onto parchment-lined cookie pans, spacing 1 in. apart.