The phrase you are referring to typically points to a popular community-created mod for the survival game . Project Zomboid Mod: "Snow is Water"

Snow typically fills containers at a slower rate (often 50% ) compared to rain.

It takes a large volume of snow to produce a small amount of liquid water (the ratio is roughly 10:1).

Outside of gaming, "Snow is water in a barrel" refers to the practical survival technique of collecting snow to melt for fresh water.