Line an 8×8-inch (20×20 cm) square baking pan with parchment paper, leaving overhang on two sides to form handles. Lightly butter or spray the parchment to prevent sticking.
Measure out the white chocolate chips and shredded coconut so they are ready to add. Having everything prepared helps prevent overcooking once the mixture is hot.
In a medium heavy-bottomed saucepan, combine the sweetened condensed milk, coconut cream, and butter. Place over low to medium-low heat and cook, stirring often, until the butter is melted and the mixture is smooth and warm, about 3–5 minutes. Do not let it boil hard.
14 oz sweetened condensed milk, 1/3 cup coconut cream, 3 tablespoons unsalted butter
Reduce the heat to low. Add the white chocolate chips and stir slowly and constantly until fully melted and the mixture is thick and glossy. If the chocolate is slow to melt, remove the pan from the heat and keep stirring; the residual heat will usually finish melting it.
3 cups white chocolate chips
Remove the saucepan from the heat. Stir in the vanilla extract, coconut extract (if using), and fine sea salt until well combined. Taste a small amount carefully and adjust the coconut extract or salt to your preference.
1 teaspoon pure vanilla extract, 1/2 teaspoon coconut extract, 1/4 teaspoon fine sea salt
Fold 1 cup of the shredded coconut into the warm fudge mixture until evenly distributed. The mixture will be thick.
1 1/2 cups sweetened shredded coconut
Scrape the fudge mixture into the prepared pan while it is still warm. Use an offset spatula or the back of a greased spoon to spread it into an even layer, pressing it into the corners.
Sprinkle the remaining 1/2 cup shredded coconut evenly over the top of the fudge. Gently press it down so it adheres. For a toasted flavor, you may toast this coconut in a dry skillet beforehand until golden and fragrant.
1 1/2 cups sweetened shredded coconut
Refrigerate the pan for at least 2 hours, or until the fudge is firm all the way through. For the cleanest slices, chill 3–4 hours or overnight.
Use the parchment handles to lift the fudge slab from the pan onto a cutting board. With a large sharp knife warmed in hot water and wiped dry, cut into 25–36 small squares, wiping and re-warming the knife between cuts for neat edges. Garnish with toasted coconut, flaky salt, or a drizzle of melted dark chocolate if desired.
Optional garnish