The sentence means that a handy/stylish gadget is essential for slicing vegetables.
The word has other meanings.
For example, we say:
1. He is a nifty runner. (quick and agile)
2. Modern household appliances have very nifty designs. (stylish / aesthetically pleasing)
3. They came up with three nifty proposals. (excellent ideas)
4. We are pleased to announce nifty profits for this quarter. (substantial)
Hope this helps.