<?php

$fruits = array(
    'mango',
    'mango red',
    'mango yellow',
    'orange',
    'banana',
    'apple',
    'apple red',
    'apple green',
);

$result = array();
foreach ($fruits as $f) {
    $f_array = explode(' ', $f);
    $start = &$result;
    foreach ($f_array as $word) {
        if (!isset($start[$word])) {
            $start[$word] = array();
        }
        $start = &$start[$word];
    }
}
var_dump($result);