Usually followed by the rubbing of the thumb, index, and middle finger. "That's spice" is used when something is cool or an action is executed perfectly. Using this with your friends will immediately turn you into a group of faggotoni pepperonis.
Person 1: What kind of cheese would you like on your sub?
Person 2: I would like that one.
Person 1: Do you mean American cheese?
Person 2: That's the spice.