It is a dark shade of red. It looks like a salami sausage and can be chopped into pieces.
Role in episode
When going to Seashell Park to get their minds off karate, SpongeBob and Sandy take the barnacle loaf they packed out of the picnic basket and start slicing pieces to put in burgers. However, they are reminded of karate, which they are prohibited to perform by Mr. Krabs, and start chopping as many pieces as they can. This, however, only aggravates the situation, as the way they chop is extremely reminiscent of karate.
Even though SpongeBob and Sandy are seen making burgers with the barnacle loaf at the beginning of their picnic, the burgers that are made from their karate match are not seen with any barnacle loaf pieces.