In a medium saucepan, combine fresh cranberries with water and a bit of sugar. Cook over medium heat for about 10 minutes, stirring occasionally, until the cranberries have softened and burst. Blend until smooth and set aside to cool.

In a separate saucepan, gently heat the heavy cream along with the vanilla bean or extract over medium heat until it just simmers. Remove from heat.

In a mixing bowl, whisk the egg yolks and granulated sugar until pale and creamy. Gradually pour in the warm cream mixture, whisking continuously.

Preheat your oven to 325°F (160°C). Pour the custard mixture into ramekins, arrange in a baking dish, and fill with hot water halfway up the ramekins. Bake for about 40 minutes.

Remove ramekins from the water bath, cool at room temperature for about 30 minutes, then refrigerate for at least 2 hours or overnight.

When ready to serve, sprinkle a layer of sugar on top of each custard and caramelize with a kitchen torch until bubbly and golden brown.

Serve the custards with the cranberry sauce on the side.