It is an oil soluble extract, processed from lipids and pigments from the pods of sweet red pepper, Capsicum Annuum Linn or Capsicum Frutescens, grown in temperate climates. It is primarily used as a coloring and flavoring in food products such as sausage, dressings, dry soluble seasonings, food coatings, and snack food seasonings.

Capsicum peppers are native to tropical South America and the West Indies and were probably not introduced into Europe and other parts of the world until after the 16th century. Originally, the tropical paprika pepper was much hotter and fiery in taste than it is now. Over time and due to different climates, types of soil and growing conditions, the paprika pepper has evolved into a somewhat milder and sweeter variety of its ancestor. Paprika peppers are commercially produced in Spain, California and Hungary and it is the latter variety that is famed throughout the world for its flavour and quality. Paprika from Spain and the US are particularly mild and sweet in strength and flavour, however Hungarian paprika is much richer, flavoursome and robust.