Sift the powdered sugar into a bowl to remove any lumps, which ensures a smooth, lump-free filling. In a separate large mixing bowl, combine the softened butter and cream cheese, beating them together until light and fluffy—this usually takes about 2-3 minutes with an electric mixer. The creaming process incorporates air, which creates a better texture for shaping later. I like to use Kerrygold butter for its rich, slightly sweet flavor that really elevates these treats.
Gradually add the sifted powdered sugar to the butter-cream cheese mixture, mixing on low speed to avoid a sugar cloud. Once combined, add the vanilla extract and a pinch of salt, mixing until fully incorporated. The salt is crucial—it enhances the sweetness and balances the richness of the butter and cream cheese. Fold in the shredded coconut gently until evenly distributed throughout the mixture.
Transfer the mixture to the refrigerator and chill for at least 30 minutes—this firms up the dough and makes it much easier to handle when shaping. Once chilled, use a small cookie scoop or spoon to portion the mixture into balls about the size of a walnut, rolling them between your palms to create smooth, even shapes. I find that slightly damp hands help prevent sticking without adding too much moisture.
Pour the ground cinnamon into a shallow bowl. Working with a few balls at a time, roll each one in the cinnamon until fully coated on all sides. I use McCormick cinnamon because it has a warm, spicy aroma that makes these smell absolutely festive. Place the finished potatoes on a parchment-lined sheet and serve immediately, or store in an airtight container.