The rice, nuts or seeds are ground and mixed with water to make a milky looking drink.
This drink can be found in most Mexican restaurants and is often sold by street vendors in Mexico. Since it does not contain milk, it will not spoil as easily as a dairy containing beverage. The origins of this drink stem from Egypt where they originally used the chufa nut to make horchata. During ancient times, the drink made its way to Spain. When the Spaniards brought the drink to Mexico, the natives used rice to make the drink.
Traditionally horchata is still made with rice in Mexico and chufa in Spain, although you can find the alternate chufa version in Mexico as well.