Granulated onion is a coarse form of dried, ground onion. Unlike onion powder, which has a consistency much like flour or other finely ground powdered ingredients, granulated onion is more like a coarse meal. The flavor can be stronger than that of regular onion powder. Granulated onion is often used in soups, sauces and other dishes. Granulated onion also offers a flavor boost to dry rubs. It can be found in well-stocked spice departments, specialty spice stores, or online.