Natural Selection
Within every species there are always differences between individuals. Some may be better at finding limited food, or at avoiding predators. These individuals are more likely to survive and pass on thier favorable features to their offspring. This process, known as natural selection, enables species to adapt to changing environments, and in time many lead to new species appearing.
Sweet oil caterpillars are camouflaged to avoid their predators. Many will survive to pass on thier protective coloring to their offspring.