The hydrophobic effect is an effect in which hydrophobic molecules aggregate in aqueous solution. The food coloring is hydrophilic, that's why adding it to the water causes a homogenous mixture. By adding oil, which is a hydrophobic molecule, we will see that drop floating. When another drop will be added to the mixture - those two drops will fit together.
Putting some other drops will give us two levels: water with food coloring and oil.
The oil (an hydrophobic matter) will "try" to fit together in a solution, thank to this effect.
In the video bellow it's shown how the food coloring fits together with the water, unlike the oil drops (which are "trying" to unit themselves).