Water is the key ingredient in the mixture. It’s also treated with guar gum and/or clay as thickeners, to turn the liquid into a “blanket” and keep it from evaporating in the heat or being blown away before it hits the drop zone. Those thickeners also help to cover more area.
As for the color, that comes from iron oxide (aka rust) and is added to make it clear to firefighters which areas have been treated. Sometimes the mixture includes fertilizer to help spur plant growth as well. The “red stuff” is a fire retardant rather than extinguisher and is designed to slow the progress of the fire so that firefighters on the ground have time to reach the area. The red does stain any houses in its path, but it washes off.