As with many other things, the closer you can get to the whole ingredient the better. If you can get your hands on vanilla beans, in some cases you can simply scrape the seeds into your batter or mix–there’s a reason some flavors are known as vanilla bean, while others are just vanilla.
And after you scrape the seeds out? Here’s a favorite low-waste hack I learned while working at Flour, the bakery and cafe by pastry chef Joanne Chang: instead of tossing the pods, bury them in some sugar in an airtight container for about a week. The leftover pods will slowly infuse the sugar (whatever kind you chose) with their flavor, lending a subtle vanilla touch to anything you cook or bake using that sugar–you may be able to skip the extract entirely, depending on what you’re making.
You could also go the route of Ina Garten, who actually makes her own vanilla extract–and has been for 30 years! It’s actually extremely simple to do: using a tall jar and one or two dozen vanilla beans (depending on the size of the jar), pour vodka over them so they’re covered, and then just leave it at room temperature “for at least a month, but six months is better,” she says.