Vietnamese Caramel Sauce (Nước Màu) is not a sauce you put on ice cream or an ingredient you use in baking. It's not even sweet. In fact, it's bitter. Vietnamese caramel sauce is used in many Vietnamese savory caramelized dishes (Món An Khô). Its purpose is to color meat to make it more appetizing.
Nuoc Mau has only two ingredients: white sugar and water. The traditional method of making Nuoc Mau starts off with heating up granulated white sugar by itself or with a bit of oil in a small saucepan until it melts and turns a dark amber color. Water is then added to thin it out. This method, although traditional, has a risk of burning your eye brows off. When you add water to hot sugar (and oil), you get a violent reaction of hot sugar flying in all directions. Hot sugar landing on your face or any exposed skin hurts like a mother, a lesson I unfortunately learned first hand a few times.
A better approach is mixing sugar with a bit of water and then caramelizing it. The small amount of water will reduce the explosion that is hell when the rest of the water is added at a later stage.
In a pinch when I run out of my homemade caramel sauce, I use thick or dark soy sauce as a substitute. However, once you master your own caramel sauce at home, you'll never want to use store-bought versions or use other substitutes again.
Vietnamese Caramel Cooking Sauce (Nuoc Mau)
Makes 1 cup
1 cup granulated white sugar
1/4 cup water + 1/2 cup water
Using a light-colored and heavy-bottomed saucepan that's at least 4 inches in height, add sugar and 1/4 cup water. Give it a quick swirl to even out the sugar.
Heat on medium-high for about 5-8 minutes. At this point you should start to see the sugar breaking down and changing color. Continue to cook for another 5-8 minutes until the sugar begins smoking and turns a dark amber color. Make sure not to cook for too long or else it will turn black and burnt. However, the sugar may appear black in the saucepan. To accurately gauge the color, examine the caramel sauce on the back of a spoon.
Once you get a deep amber color, turn off the heat. Slowly, very slowly, pour 1/2 cup of water into the saucepan. The combination of water and hot sugar will splatter violently so do this part very carefully and slowly. For safety and cleanliness, I highly recommend transferring the saucepan into an empty sink before adding water. Once you add the water, give it a quick mix. Allow it to cool slightly before transferring it to a glass container. The caramel sauce will continue to thicken as it cools. The sauce can be stored in the pantry for months or years, really. There is no need for refrigeration.