From Smitten Kitchen.
1/2 cup unsweetened shredded coconut
3/4 cup unsalted butter, room temperature
1/2 cup sugar
1/2 teaspoon salt
1/2 teaspoon vanilla extract
1 1/3 cups all purpose flour
Preheat oven to 325°F. Bake coconut until it is light golden, stirring occasionally, which took me about 5 minutes. Cool completely, then grind in a blender until coarsely ground.
Using electric mixer, beat butter and sugar in large bowl until well blended. Mix in salt and vanilla. Beat in flour in 2 additions. Stir in toasted coconut. Gather dough together, flatten into a disc and wrap in plastic. Chill for 15 minutes.
Roll out dough disk on lightly floured work surface to 1/4-inch thickness. Using 2-inch-diameter cookie cutters, cut dough into rounds. Transfer cookies to prepared baking sheets, spacing 1 inch apart. Gather dough scraps and reroll; cut out additional cookies.
Bake cookies until light golden, about 17 minutes. Cool.
I made little sandwiches out of mine by putting some strawberry jam between two cookies. They’re so cute, and the shortbread is really tasty… perfect for rainy days!