It is part of the rather complex structure of those files. It consists of a Protobuf stream compressed using Snappy (both Protobuf and Snappy are formats originating with Google). However, the variant of Snappy that is used does not comply with the spec for that format, omitting the stream identifier and checksum. In the iWork format, these files are found within a ZIP archive (index.zip) that is within the bundle file (actually a directory). The bundle is often found as a ZIP, so the IWA files end up being in a ZIP within a ZIP, with several layers of subdirectories thrown in. So things are nested like Russian dolls.
Some .iwa files can be found within these sample iWork files inside the doubly-nested ZIP.