Preheat oven to 350°. In a large bowl, cream butter and sugar until light and fluffy. Add eggs, one at a time, beating well after each addition. Stir in food coloring and vanilla. Combine flour, cocoa, baking soda and salt. Combine buttermilk and vinegar. Add dry ingredients to creamed mixture alternately with buttermilk mixture, beating well after each addition.
Fill foil or paper-lined muffin cups two-thirds full. Bake 18-22 minutes or until a toothpick inserted in center comes out clean. Cool 10 minutes before removing from pans to wire rack to cool completely.
For frosting, in a large bowl, beat cream cheese and butter until fluffy. Add confectioners’ sugar and vanilla; beat until smooth. Stir in 1 cup coconut. Frost cupcakes.
Toast remaining coconut; sprinkle over cupcakes. Store in the refrigerator.