Onion powder is dehydrated, ground onion that is commonly used as a seasoning. It is a common ingredient in seasoned salt and spice mixes, such as beau monde seasoning. Some varieties are prepared using toasted onion. White, yellow and red onions may be used.Onion powder is dehydrated, ground onion that is commonly used as a seasoning. It is a common ingredient in seasoned salt and spice mixes, such as beau monde seasoning. Some varieties are prepared using toasted onion. White, yellow and red onions may be used.