Beat softened cream cheese and butter together until light and fluffy.
Carefully open the can of coconut milk, there will be a thick layer of solid coconut cream on top. Scoop out this layer, leaving the watery coconut milk behind. (Save the coconut milk for smoothies)
Mix in the coconut cream, vanilla and coconut extract.
Gradually add the confectioner’s sugar one cup at a time, beat until all ingredients are combined and smooth. Add additional confectioners’ sugar if necessary to thicken the frosting, or a little of the coconut milk to thin. Stir in the shredded coconut, if desired.