From Anne Marie Helmenstine, Ph.D.,

This popular chemistry demonstration is often called turning water into wine or water into blood. It's really a simple example of a pH indicator. Phenolphthalein is added to water, which is then poured into a second glass containing a base. If the pH of the resulting solution is right, you can make the water turn from clear to red to clear again, as long as you like.
Difficulty: Easy

Time Required: Minutes

Here's How:
1. Sprinkle sodium carbonate to coat the bottom of a drinking glass.

2. Fill a second glass halfway full of water. Add ~10 drops phenolphthalein indicator solution to the water. The glasses can be prepared in advance.

3. To change water into wine or blood, pour the water with indicator into the glass that contains the sodium carbonate. Stir the contents to mix the sodium carbonate, and the water will change from clear to red.

4. If you like, you can use a straw to blow air into the red liquid to change it back to clear.

5. The principle is the same as for the disappearing ink formula. Phenolphthalein is an acid-base indicator.

Tips:
Phenolphthalein and sodium carbonate can be ordered freely from any scientific supplier. Most grade school and high school science labs have these chemicals, though you can order them yourself.
Don't drink the water/wine/blood. It isn't particularly toxic, but it isn't good for you either. The liquid can be poured down the drain when the demonstration is complete.
For a normal drinking glass, the ratio used to get the reversible color change reaction is 5 parts sodium carbonate per 10 drops of a phenolphthalein stock solution.

What You Need:
phenolphthalein pH indicator
sodium carbonate
water
2 glasses
stirring rod
straw or pipette