Setter eating shell of exotic nut (5)
I believe the answer is:
pecan
'nut' is the definition.
(type of nut)
'setter eating shell of exotic' is the wordplay.
'setter' becomes 'Pan' (Guardian crossword setter).
'eating' is an insertion indicator.
'shell of' suggests removing the centre.
'exotic' with its middle removed is 'ec'.
'pan' placed around 'ec' is 'PECAN'.
(Other definitions for pecan that I've seen before include "Edible nut like a smooth walnut" , "of nuts" , "Walnut-like nut" , "Smooth pinkish-brown nut, nice in pie" , "Nut of American hickory tree" .)