The difference between sweetened and unsweetened coconut is in more than just the sugar. Manufacturers usually sweeten the coconut by soaking it in sugar or corn syrup. This makes the sweetened product moister. Unsweetened coconut is drier and lighter. If you use it to substitute for sweetened coconut without other additives, you could get a flakier product that falls apart more easily.

When you substitute unsweetened coconut for the sweetened product, you need to add more moisture to your recipe. This can come in the form of water or oil. To moisturize with water, moisten each 1/2 cup of coconut with 1 tablespoon of hot water. Allow it to stand for 10 minutes before adding the coconut to your recipe. To use oil, add 1 1/2 teaspoons of vegetable oil and 1 1/2 teaspoons of hot water to each 1/2 cup of coconut.

Using unsweetened coconut reduces the sugar content of your recipe. If you are trying to reduce calories or sweetness, this might be the result you're hoping for. But this can seriously affect the quality of the finished product. Add 1 tablespoon of powdered sugar to each 1/2 cup of unsweetened coconut to make up for the loss of sweetness, if needed.

If you're trying avoid sugar, you can substitute a combination of unsweetened coconut and artificial sweetener for sweetened coconut. Use 1 tablespoon of granulated artificial sweetener dissolved in 1 tablespoon of water for each 1/2 cup of coconut in your recipe. Combine all three ingredients and allow the water and sweetener to soak in before moving to the next step of preparation.