Begin by chopping the cocktail onions into small pieces. Set aside in a bowl.

In a skillet over medium heat, melt about two tablespoons of unsalted butter. Add panko breadcrumbs, onion powder, garlic powder, paprika, black pepper, and a pinch of salt. Stir for about 3-5 minutes until golden brown.

In a large mixing bowl, combine softened cream cheese, sour cream, mayonnaise, ketchup, granulated sugar, and horseradish if using. Blend on medium speed for about 2-3 minutes until smooth. Gently fold in the chopped cocktail onions.

Transfer the creamy dip mixture into a serving bowl and top with reserved toasted breadcrumbs and chopped parsley.

If not serving immediately, cover tightly with plastic wrap and refrigerate for at least 30 minutes.