From blogger The Cupcake Review (photo via Flickr):
I thought it was a cute idea that I had for these watermelon cupcakes, so had to try it out. I used Magnolia Bakery's vanilla cupcake recipe, but halved it to get one dozen cupcakes instead of two (though I ended up with 14, actually). I added 10 drops of red food coloring (give or take a drop) and 1/4 cup plus a tablespoon or so of mini chocolate chips.
I then used the watermelon frosting I found here. Though the taste of the frosting was nice with a subtle hint of watermelon, I was disappointed that it was too liquidy to pipe at all, even after refrigerating, so had to just sort of pour it on the cupcake. Because there is cream cheese in the frosting, I am refrigerating the leftover cupcakes so it should harden up a little, I presume. And even though the watermelon juice turned the frosting a light pink color, I wanted it green so added a few drops of green food coloring to turn it this pastel green color.