I tried making red velvet cake with paste food coloring. I added enough water to make the 2 oz required but it didn't come out quite right. Is there some other liquid I could add instead of the water? It is expensive to buy the 1 oz bottles of the coloring when I am going to need about 8 of them.

I only use the paste coloring when I make Red Velvet cake. I use the paste straight, not diluted.