When this perk is taken, all living creatures you kill have a 50% chance of having 1-3 thin red paste or blood sausages on them. In Casual Mode, with this perk, food can be forsaken entirely in favor of this.
This perk can be a significant source of caps, as both thin red paste and blood sausage both have a very high value for their weight (125 and 175, respectively).
Additionally, this perk can be very useful to players going through the Dead Money add-on, as the player can be very limited on more potent healing items.
The effects provided by these new items are powerful. The health regeneration can be +10 health per second for the craft-able black blood sausage. This is already well above the already powerful regeneration made possible by Rad Child, which doesn't provide the max health bonuses that the items activated by this perk also provide.
The items provided by this perk are not marked as food items by the game. As such, they are not affected by Survival, and do not count towards food-related achievements.