Butter the sides and bottom of a 9×9-inch baking dish. Set side.
Combine the coconut and milk in a medium bowl. Stir until the milk has been absorbed; set aside.
Combine sugar and water in a medium saucepan. Place over medium heat and cook without stirring until all the sugar has dissolved. Continue cooking for about 6 to 8 more minutes (if you have a candy thermometer, the syrup should be 230°F).
Add the coconut mixture, cinnamon and salt to the syrup in the saucepan; stir well. Continue cooking and stirring for about 8 to 10 minutes or until the mixture pulls away from the pan and any puddles of liquid disappear. Reduce heat if the mixture begins to brown. Stir in the vanilla extract, and then the food coloring (if using).
Transfer to the prepared dish and spread evenly using a buttered spatula or butter knife. Let rest for 5 to 8 minutes then cut into 1½-inch squares. Cool completely before serving.