I am a big fan of coconut and use it in recipes whenever I can. I use coconut milk, coconut cream and shredded coconut on a regular basis. Shredded coconut is probably the most commonly used type of coconut when it comes to baking, both because it is widely available and easy to use. There are two types of shredded coconut out there: sweetened and unsweetened. The sweetened coconut has sugar added to it before the fresh coconut is dried, so it is fairly moist and quite sweet, with a strong coconut flavor. Unsweetened coconut is simply dried coconut and it tends to be a bit drier than its sweetened counterpart, as well as milder in flavor.
The most commonly found in grocery stores in my area and in most of the US is sweetened shredded coconut. If a recipe calls for “shredded coconut,” it is safe to assume that they expect you to use sweetened, shredded coconut. That being said, unsweetened coconut is becoming more and more widely available and I often am asked which is better for baking , or whether the two types of coconut can be substituted for one another
The simple answer is that the two are pretty much identical in how they behave in recipes, mixing in easily and adding a nice, chewy texture. You can use these two types of coconut interchangeably in a recipe and get good results. In the event that a specific type is called for in a recipe, I would try to stick with it because the two coconuts taste a bit different and the recipe may very well have taken that into account with the amount of sugar, etc. that is included in the formula. The sweetened coconut has sugar added to it before drying, so it tends to be a bit more moist from the outset, while unsweetened coconut is drier and slightly chewier. There is a small chance that sweetened might be slightly too sweet in a recipe that specifically calls for unsweetened, but the amount of sugar that is in sweetened coconut is unlikely to have a major impact on the overall sweetness of a recipe. If no specific type is called for, you can certainly use what you have on hand or whichever type you personally prefer to work with.