Vanilla extract is made by steeping vanilla pods in alcohol and water to infuse the liquid with an intense vanilla aroma and flavor that can then be added during cooking and especially baking. When purchasing vanilla extract in stores, buy "pure vanilla extract" for the best flavor. Alcohol free vanilla extract is also available, but it is sold as "alcohol free vanilla flavor" because it does not meet the legal definition of vanilla extract (because of the lack of alcohol).1
Unlike pure vanilla extract and high-quality alcohol free vanilla flavor, imitation vanilla is not made from vanilla pods. It is instead made from synthetic vanillin (a substance that gives vanilla some of its flavor). Thus, imitation vanilla does impart vanilla flavor (at a much lower cost), but this flavor is less nuanced than if you used pure vanilla extract or seeds from the vanila pod. Imitation vanilla is still a good option if you're on a budget or if vanilla doesn't play such an important role in the flavor of the final product.2
Nutrition DNA
The nutrition DNA of vanilla extract. For example, you can see that 1 tablespoon vanilla extract covers 25% of your daily need of Alcohol and 6% of the recommended Sugar intake. Hover over the bars to see which nutrient is covered.