This is a very important question to answer if you plan on producing red mulch. The key, to mulch coloring, is to mate up the feed stock to the finished color you want.
Lighter colors like gold, red, turquoise, royal blue, etc. must have a very light colored feed stock. The ideal raw material to be ground are pallets, clean wood, and logs. No landscape debris, nothing dark in color. Simply put, if you want to dye to a light color, you must use a light wood.
For dying mulch to black or dark brown, your feedstock can be wood with a darker color. This is why you must separate your wood when using a variety of colors. Pallets are a very popular material for any color because they absorb and they hold the color well. You can always dye light wood darker but you can not dye dark wood lighter.
It’s worth noting here that you need a significant amount of water to color mulch. A garden hose is NOT going to suffice; normally, you need a 2” water line. Many producers dig wells or have ponds to supply them with water. Public water is costly, so having a free or inexpensive water source is imperative to coloring/dying mulch.