The food coloring helps you see the movement of the water. After the liquid settles, shake salt into the jar and count to 10. Add more salt to continue the action. The oil floats on top of the water. This is because oil is lighter, or less dense, than water.
Salt is heavier than water, so it sinks to the bottom.
As it falls, it grabs some oil and carries it to the bottom of the jar. As the salt dissolves, the oil is released to return to the top.