Appearance
When water or ice is added to ouzo, which is clear in color, it turns milky white; this is because anethole the essential oil of anise is soluble in alcohol but not water. Diluting the spirit causes it to separate creating an emulsion, whose fine droplets scatter the light.
The crystals sometimes seen in ouzo served cold are crystalline anethole, the constituent of anise aroma. That's why one should avoid serving ouzo cold. Drinking ouzo on the rocks is not preferred; it is preferable to add cold water.