Line a 7x7 inch square pan with parchment paper or lightly grease it. This will help you remove the coconut ice easily once it's set.
In a large bowl, combine 1 ½ cups desiccated coconut, ½ cup powdered sugar. Stir well until evenly mixed.
Pour in 1/2 cup sweetened condensed milk and 1 tsp vanilla into the coconut mixture and stir until the mixture is thick, sticky, and well combined.
Transfer the coconut mixture to the prepared pan and press it down firmly using the back of a spoon, spatula or your hands to create an even layer.
In the same bowl, combine the remaining 1 ½ cups desiccated coconut, ½ cup powdered sugar, 1/2 cup condensed milk, 1 tsp vanilla extract and few drops of pink food colour. Stir well.
Gently press the pink-colored coconut mixture onto the first layer in the pan. Make sure it’s even and flat. You can also use a spoon to smooth the surface.
Cover the pan with plastic wrap or a lid and refrigerate for at least 2 hours or until the coconut ice is firm and set.
Once set, remove the coconut ice from the pan and transfer it to a cutting board. Slice it into 1-inch squares or desired size using a sharp knife.
Enjoy immediately or store in an airtight container in the refrigerator for up to 1 week or at room temperature for 2-3 days.
Notes
The consistency of the mixture should be sticky but not too wet. If the mixture seems too dry, add a tiny bit more condensed milk. And if it is too wet then add little desiccated coconut.
You can substitute the pink food coloring with any color of your choice or leave it out for a classic white coconut ice. For Christmas, red and green coloring can give it a festive look.
Sifting the icing sugar before mixing ensures there are no lumps, leading to a smooth and even texture in the Coconut Ice.
When pressing the coconut mixture into the pan, use a spoon or the back of a glass to firmly press it down. This ensures that the layers hold together well and don't crumble when sliced.
Chill the Coconut Ice in the refrigerator, not the freezer, to ensure it sets properly. Freezing it too soon can make the texture too hard, affecting the soft and chewy bite.
When adding color to the second layer, use a few drops of food coloring at a time. You can always add more if you want a deeper color, but it's easier to start with less.