Line an 8×8-inch (20×20 cm) square baking pan with parchment paper, leaving an overhang on two sides to lift the fudge out later. Lightly grease the parchment with a small amount of butter or nonstick spray.
Add 1/4 cup of the shredded coconut to a dry skillet over medium-low heat. Toast, stirring often, for 3–5 minutes until lightly golden and fragrant. Immediately transfer to a plate to cool completely so it doesn’t burn.
3/4 cup unsweetened shredded or desiccated coconut
In a medium heavy-bottomed saucepan, add the white chocolate chips, sweetened condensed milk, coconut cream, unsalted butter, and fine sea salt. Do not turn the heat on yet.
3 cups white chocolate chips, 14 oz sweetened condensed milk, 1/2 cup coconut cream, 2 tablespoons unsalted butter, 1/4 teaspoon fine sea salt
Place the saucepan over low heat. Stir constantly with a heatproof spatula, scraping the bottom and sides, until the chocolate chips are fully melted and the mixture is smooth and glossy. Keep the heat low and avoid boiling to prevent grainy fudge.
Remove the pan from the heat. Stir in the vanilla extract and coconut extract (if using). Taste a tiny amount carefully; if you prefer a stronger coconut flavor, add another drop or two of coconut extract.
1 teaspoon pure vanilla extract, 1/2 teaspoon coconut extract
Add 1/2 cup of the shredded coconut to the warm fudge mixture. Stir well until the coconut is evenly distributed throughout the fudge.
3/4 cup unsweetened shredded or desiccated coconut
Pour the warm coconut fudge mixture into the prepared baking pan. Use a spatula to spread it evenly into the corners and smooth the top. Gently tap the pan on the counter a few times to release any air bubbles.
Sprinkle the cooled toasted coconut evenly over the top of the fudge. If desired, add a light sprinkle of flaky sea salt, a little lime zest, and/or a drizzle of melted dark chocolate. Press toppings very lightly so they adhere.
3/4 cup unsweetened shredded or desiccated coconut, flaky sea salt, lime zest, dark chocolate
Cover the pan loosely with plastic wrap or foil. Refrigerate for at least 3 hours, or until the fudge is firm enough to cut cleanly. For best flavor and neatest slices, chill overnight.
Use the parchment overhang to lift the chilled fudge out of the pan and onto a cutting board. With a sharp knife, cut into about 1-inch squares, wiping the blade with a warm, damp cloth between cuts for clean edges. Serve slightly chilled or let sit at room temperature for 10–15 minutes for a softer, creamier texture.