You need the
aerated mineral water sold by the fuel merchants in your tradeskill instance (in Qeynos or Freeport), or near the area you craft in, for other city residents. I think there's also distilled water.
Purchased milk will work for liquid in some recipes, but I don't recommend it because it's expensive. There are no longer any dropped liquids that work in recipes (back in the Olden Dayes things like canine saliva worked, lol).