There is more than one type of vanilla flavoring on the market. There is vanilla extract, which is made by macerating vanilla beans in an alcohol solution to extract the beans’ natural flavors, and there is imitation or artificial vanilla extract, which is produced with synthetic vanillin, the same compound that is naturally found in vanilla beans. You can also find alcohol-free vanilla flavorings, if you want to get the vanilla flavor without even a trace of alcohol. Most vanilla extracts and other vanilla products are brown in color, the color of the extracted vanilla bean seeds.
This trace amount of color doesn’t make much of a difference in most baked goods, especially if you are making something with brown sugar or chocolate, but it can actually make an impact on the color of very white foods, like royal icing and whipped cream, and you can preserve that white-white color by using clear vanilla. Clear vanilla is a vanilla flavoring is a perfectly clear liquid that delivers the flavor of vanilla extract. It is available in versions with alcohol and that are alcohol free, depending on the brand. The flavoring is a synthetic version of vanillin, the chemical responsible for the flavor of vanilla beans, which is how they are able to keep the color perfectly clear.
Clear vanilla extract is most often used in frosting and filling recipes, where bakers want to keep the color as clean as possible. Vanilla extract, especially if you are generous with your pours, can give frosting a slightly off-white color (or slightly darken a colored frosting). This might not be that noticeable in an everyday cake, but it makes an impact when you are frosting a cake for a special occasion or event. Weddings are the most obvious example, as an all-white cake is always a popular choice for that special day, but many cake decorators want to ensure that their colors are as vivid as possible.