Given that the writer of the recipe mentions the recipe was exchanged at Tupperware parties, I imagine the original recipe would have used sweetened coconut flakes. That used to be what was most commonly found in stores in the US. Unsweetened coconut would not only be less sweet, but drier and with a milder flavor. I think you could use it, and have a less sweet product, but you might have to add flavoring and perhaps a bit of extra moisture to offset it being dry.
Hopefully the author will show up- it looks like unsweetened given the amount of sugar in the recipe. I never tried toasting sweetened coconut, but I suspect it wouldn't turn out well.
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