Specific Gravity means the density relative to water. If a product has specific gravity 1 means that a given volume say 1 ltr will weigh same as 1 ltr of water.
It plays an important role for products such as milk, honey, etc. They are a measurant of product quality and sometimes gives an account of adulteration.
Lets take the classical example of milk, average specific gravity of milk is 1.030 at 15°C. If anyone adds water to milk the specific gravity of the milk will increase. Also to be noted that the milk which is rich in fat has got a lower specific gravity. So these parameters are used to index the quality of milk.
Specific gravity plays an important role in judging the qualities of foods like: