When you make vanilla flavoring (extract) the traditional way, it is MOSTLY alcohol, because you are basically soaking the vanilla bean(s) in alcohol for it to extract all the vanilla flavor which is basically an oil that is solvent in alcohol. It is not important what type of alcohol you use. What is important is that it is at least 80 proof, or 40 percent alcohol; a higher proof is fine as well. If it is a lower percentage, you won’t yield a good quality extract. Remember: the higher the proof, the stronger your extract.
 
Here's a recipe I found for alcohol-free vanilla extract. I can't tell you how good/bad it is since I have never tried it, but if you don't want the alcohol, this is an alternative,
 
 
Supplies
•a tall glass bottle, at least 17 ounces
•a very sharp paring knife
 
Ingredients
•16 ounces food-grade vegetable glycerine
•8 Bourbon Madagascar Vanilla Beans Instructions
 
1.Pour the vegetable glycerine into the glass bottle.
2.Cut the vanilla beans in half lengthwise. Use the sharp edge of your knife to scrape the seeds away from the bean pods.
3.Add the seeds and bean pods to the vegetable glycerine.
4.Cap bottle and put in a dark place to steep for 6 weeks.
5.If desired, add additional vanilla bean pods to the vegetable glycerine as you use them in your kitchen.