Why does dry powder (such as kool aid) form a funnel when dropped in water?

It doesn't. You are leaving out details aren't you? If stirring, consider centrifugal force and density. If not stirring, then no "funnel" is formed. Also consider whether the fluid is behaving in a Newtonian fashion or some other way. Some fluids behave "strangely". They don't act as we expect.