Grease a 3cm deep, 16.5cm x 26cm (base) slab pan. Line base and sides with baking paper, allowing a 3cm overhang at both long ends.
Combine sugar and 2/3 cup hot water in a saucepan over medium heat. Cook, stirring for 3 minutes or until sugar dissolves and syrup is clear.
Using a whisk or fork, combine gelatine and 2/3 cup of cold water in a jug. Pour this mixture into hot syrup. Cook, stirring, for 2 to 3 minutes or until gelatine has dissolved and mixture is clear. Pour into bowl and set aside to cool to room temperature (about 30 minutes).
Using an electric mixer, beat sugar and gelatine mixture on high for 6 to 10 minutes or until very thick. Add vanilla and food colouring to reach desired colour and beat for 1 minute. Spread into prepared pan. Smooth top. Set aside, at room temperature, for 1 hour or until set. Lift onto a board and cut into squares using a wet knife.
Optional: Place coconut in a shallow bowl. Once freshly cut, roll marshmallow into coconut to coat. Remove to a wire rack until surface feels dry.