In large bowl, stir together sugar and pineapple. Let stand at room temperature for 10 minutes, stirring occasionally. In small pan, stir pectin into the water. Bring to boiling over high heat. Boil hard for 1 minute, stirring constantly. Add pectin mixture to pineapple mixture, stirring about 3 minutes or until sugar dissolves and mixture is not grainy. Stir in coconut. Ladle sauce into half pint freezer containers, leaving a 1/2 inch headspace. Seal and label. Let stand at room temperature for 24 hours before serving. Store for up to 3 weeks in refrigerator or for up to 1 year in the freezer. Makes about 5 half pints.