Place the white granulated sugar in a food processor.
With a paring knife, slit the vanilla bean pod down the center lengthwise, then scrape the vanilla seeds with the back of the knife blade, and place them on top of the sugar. Repeat until all the seeds are gone from the pod. Set the vanilla bean pod aside until needed.
Pulse the mixture a few times until all clumps of seeds are broken up and blended.
Pour into a glass jar. Submerge the vanilla bean pod in the sugar and seal with an airtight lid. Side Note: If you store in more than one jar, cut the bean pod and divide it evenly between jars.
Store it sealed in an airtight jar in a cool, dry place until needed. Side Note: You can use the vanilla sugar right away, but for optimal flavor, you should wait 1-2 weeks.