When 50mL of water are added to 50mL of ethanol in a 100mL graduated cylinder, there are only ~97mL of liquid. Ethanol and water molecules are attracted to each other through hydrogen bonding. The two molecules pack closer together with each other than they do with just themselves.
Water has a very high surface tension because of the strong hydrogen bonding between water molecules, which allows the pepper to float on top of the water. When a small amount of soap is added it forms a monolayer on the surface. The monolayer spreads away from the point of contact causing the pepper to move to the edges of the dish.