A word of caution when toasting coconut: keep your nose on top of things since the first fragrant whiff of toasted coconut usually indicates that the process is just about finished.
Preheat the oven to 250°F. Spread out shredded coconut on a shallow (not dark) baking sheet. Toast in oven until coconut turns golden brown, 10 to 20 minutes. Check every 5 minutes at first (be careful not to burn) and stir to redistribute. Remove toasted coconut from oven and let cool on the baking sheet. Store in an airtight container or well-covered bowl at room temperature for up to 3 days before using—after that, the flavor will lose potency.