Decide what style serving bowl you want to use: To serve 4 people, take out 4 wine glasses, goblets, or decorative bowls. To serve 6-8 people, take out 6-8 small ramekins. It’s nice if you have glass ramekins so you can see the different layers of panna cotta, but any will suffice.
Make the Nutella layer by adding the water to a measuring cup that you can easily pour from. Sprinkle the gelatin evenly over the water and let set for a few minutes.
In a small saucepan, over low heat, warm the cream and sugar. Once the sugar has dissolved, stir in the Nutella and mix well. Be careful not to let the cream boil.
Pour the cream mixture into the measuring cup with the gelatin and mix, ensuring that the gelatin has melted. Pour the mixture into your prepared serving bowls and refrigerate immediately.
Let set for a few hours before starting your vanilla layer. Keep the measuring cup and saucepan handy so you can reuse later when you repeat the process with the vanilla layer.
To make the vanilla layer, follow the same instructions but instead of adding Nutella, add the vanilla bean paste. Remove from heat. Stir in vanilla extract (it burns off and loses flavor if cooked over the heat).
Wait until the mixture has cooled to room temperature before pouring over the Nutella layer. Place in the refrigerator for another several hours before serving. Enjoy!