It is a brown type of snail food that comes in a grayish-blue can with the product's name transcribed in white lettering and two hyphens at the beginning and end of the word "nip." Below, there is an illustration of a snail who looks similar to Gary, depicted by a white rectangle centered in a purple border.
Consumption of the food seems to dissolve the brown particles into a sticky blue substance, as evidenced by SpongeBob's consumption of it.
Role in episode
To get his attention away from Patrick and back to him, SpongeBob opens up a can of Snail Nip and eats it in front of Gary as a means to convince him to come back, though this does not attract his attention whatsoever.
It is a parody of catnip, a plant that makes cats happy.