Preheat oven to 300 degrees F. Line a large baking sheet with parchment paper, (do not grease the baking sheet).
In a medium, heavy-bottom saucepan, combine sugar, water, food coloring, and vanilla. Stir, and cook over medium heat until the mixture comes to a boil. Stir in peanuts and continue cooking over medium heat, stirring often, until the liquid has coated the peanuts and starts to harden; this step will take 12 to 16 minutes.
Spread peanuts out over the prepared sheet pan. Separate them with a fork. Bake in preheated oven for 30 minutes, tossing about every 10 minutes.
Let cool completely. Store in an airtight container.