Iceland Food & Dining Guide

Traditional Icelandic Food

Icelandic cuisine is shaped by centuries of isolation and a harsh climate that demanded resourcefulness. The foundation of traditional food is lamb and seafood, both of which remain outstanding today. Icelandic lamb is free-range and grass-fed, roaming mountain pastures all summer eating wild herbs and grasses. The result is a distinctly flavoured, tender meat that many visitors consider the best lamb they have ever tasted. You will find it everywhere -- roasted, grilled, in stews, and as hangikjot (smoked lamb), which is thinly sliced and served on bread or with potatoes.

Seafood is equally central to the Icelandic table. Cod and haddock have sustained the nation for centuries, and both appear on virtually every restaurant menu. Arctic char, a freshwater fish related to salmon and trout, is delicate and exceptional when pan-fried. Langoustine (Icelandic lobster) is a prized delicacy, especially in the southeastern town of Hofn. Hardfiskur, or dried fish, is a traditional high-protein snack eaten with butter -- it tastes far better than it sounds and is available in every supermarket.

Skyr is Iceland's most famous dairy product, a thick, creamy cultured product similar to yogurt but technically a fresh cheese. It has been made in Iceland for over a thousand years and is now exported worldwide. Icelanders eat it plain, with cream and sugar, or blended with berries. Rugbraud (rye bread) is another staple -- dense, dark, and slightly sweet, traditionally baked underground using geothermal heat. Pylsur, the Icelandic hot dog, is a beloved national snack made from a blend of lamb, pork, and beef, served with raw and crispy fried onions, ketchup, sweet mustard, and remoulade.

Iceland also has cultural curiosity foods that visitors should know about. Hakarl is fermented shark with a powerful ammonia smell and an intensely pungent flavour -- it is an acquired taste that most Icelanders only eat during the midwinter Thorrablot festival. Svid is singed sheep head, split in half and boiled, including the eye. These dishes are genuinely traditional and reflect a history where nothing was wasted, but they are not everyday foods. Most visitors try a small cube of hakarl for the experience and leave it at that.

Modern Dining Scene

Reykjavik has transformed into one of the most exciting small food cities in Northern Europe. The capital punches well above its weight with a restaurant scene influenced by New Nordic cuisine -- an approach that emphasises local, seasonal ingredients prepared with modern techniques. Chefs work with Icelandic lamb, fresh-caught seafood, foraged herbs, and wild game to create dishes that are distinctly of this place. Restaurants like Dill (Iceland's only Michelin-starred restaurant) showcase what Icelandic ingredients can achieve in skilled hands.

Food halls have become a defining feature of Reykjavik's dining landscape. Hlemmur Matholl, housed in a former bus station, offers a collection of stalls serving everything from Vietnamese pho to Icelandic fish and chips. Grandi Matholl in the harbour district is a newer food hall with seafood-heavy options, craft cocktails, and a more spacious atmosphere. Both are excellent choices when a group cannot agree on a single restaurant, and they serve as affordable entry points to Reykjavik's food scene.

The craft beer revolution has taken firm hold in Iceland. Until 1989, beer was actually banned in the country, but today Reykjavik has a thriving brewery and bar scene. Local breweries produce everything from crisp lagers to experimental stouts. Coffee culture is equally strong -- Icelanders are among the world's highest per-capita coffee consumers. Cafes throughout Reykjavik serve excellent espresso-based drinks, and lingering over coffee is a deeply Icelandic habit.

Regional Specialties

While Reykjavik dominates the dining scene, some of Iceland's best food experiences are found in small towns and rural areas where local ingredients shine. Hofn, on the southeastern coast, is the langoustine capital of Iceland. Every restaurant in town serves langoustine in some form -- grilled tails, langoustine soup, langoustine pizza -- and the annual Humarhattid (Lobster Festival) in June draws visitors from across the country. The langoustine is caught fresh from Hornafjordur bay and tastes noticeably different from what you will find in Reykjavik.

Arctic char from highland lakes and cold rivers is a regional treasure, particularly in the north and east. The fish has a clean, mild flavour that sits somewhere between salmon and trout. Lamb is exceptional everywhere in Iceland, but farms in different regions produce subtly different flavours depending on local grazing conditions. Some restaurants in north Iceland make a point of sourcing lamb from specific nearby farms.

Farm restaurants offer some of Iceland's most memorable meals. Fridheimar, a tomato farm near the Golden Circle, serves tomato-based dishes inside a working greenhouse where you eat surrounded by growing plants. Efstidalur, also on the Golden Circle, is a working dairy farm with a restaurant overlooking the barn where you can watch cows being milked while eating ice cream made from their milk. These places combine genuinely good food with experiences you cannot get anywhere else.

Akureyri, the capital of the north, has a growing restaurant scene with several strong options for seafood and lamb. The town of Dalvik hosts an annual fish festival in August. Even in Iceland's smaller towns, you can usually find at least one restaurant serving fresh, well-prepared local food -- the quality of raw ingredients across the country is remarkably high.

Budget Eating

Food in Iceland is expensive by any international standard, but smart planning can dramatically reduce your costs without sacrificing the experience. The single most effective budget strategy is self-catering: buy groceries and cook your own meals. Most hostels and many guesthouses have fully equipped communal kitchens, and even basic Airbnbs usually include a kitchen. A week of self-catered meals costs roughly what two or three restaurant dinners would.

Bonus is the cheapest supermarket chain in Iceland, recognisable by its yellow-and-pink pig logo. Kronan is slightly more expensive but has better selection and longer hours. Netto sits in the mid-range. Hagkaup is the upscale option. For budget travellers, Bonus should be your primary grocery stop. Stock up on pasta, rice, bread, cheese, skyr, and whatever meat or fish is on offer. Soup is an especially economical and warming meal to make at a hostel kitchen.

The best cheap meal in Iceland is the gas station hot dog. At around 500 ISK (roughly $3.50 USD), an Icelandic pylsur loaded with all the toppings is filling, tasty, and available at N1 and Olis stations across the country. Baejarins Beztu Pylsur in downtown Reykjavik is the most famous hot dog stand in Iceland and charges similarly modest prices. Bakeries are another budget-friendly option -- Sandholt and Braud & Co in Reykjavik, along with local bakeries in smaller towns, sell pastries, sandwiches, and soup at reasonable prices.

If you do eat at restaurants, lunch is almost always cheaper than dinner. Many Reykjavik restaurants offer lunch specials or a soup-and-bread deal for 2,000-3,000 ISK. Tap water is free everywhere and is among the purest in the world -- never buy bottled water in Iceland. Bringing snacks and some non-perishable food from your home country is another legitimate strategy that many experienced Iceland travellers recommend.

Grocery Shopping

Understanding Iceland's supermarket landscape is essential for any budget-conscious traveller. Bonus is the clear winner on price, with locations in Reykjavik, Akureyri, and most larger towns. Hours are limited -- many Bonus stores close by 18:00 on weekdays and have shorter weekend hours, so plan your shopping trips accordingly. The stores are no-frills operations, but the savings compared to other chains are significant.

Kronan offers a wider selection and longer hours than Bonus, making it a convenient alternative when Bonus is closed. Their prepared food sections are decent for quick meals. Netto is a Danish chain with reasonable prices and a good selection of frozen foods. Hagkaup is Iceland's premium supermarket with the best produce, imported goods, and deli counter, but prices reflect the upscale positioning. In smaller towns outside the capital area, you will often find a single Samkaup or Kjorbud store serving as the only grocery option.

Key items to buy at Icelandic supermarkets include skyr (much cheaper than in restaurants), bread, cheese, smoked lamb, dried fish with butter, and any fresh fish on sale. Frozen lamb chops and fish fillets are good value for hostel cooking. Avoid buying imported fruits and vegetables in large quantities -- they are expensive. Focus on Icelandic-grown greenhouse produce like tomatoes and cucumbers when available.

Some travellers bring food from home to reduce costs. This is perfectly legal for most items, though fresh meat, raw eggs, and uncooked dairy products are restricted. Dried goods, pasta, rice, snack bars, instant noodles, and spices all travel well and can noticeably reduce your grocery spending in Iceland. Pack them in your checked luggage to avoid any issues at customs.

Vegetarian & Dietary Needs

Reykjavik has embraced vegetarian and vegan dining with genuine enthusiasm. Several dedicated plant-based restaurants operate in the capital, and most mainstream restaurants now include vegetarian options on their menus. Kaffi Vinyl is a fully vegan cafe, and many of the food hall stalls at Hlemmur Matholl and Grandi Matholl offer plant-based choices. The quality of vegetarian cooking in Reykjavik has improved dramatically in recent years and continues to grow.

Outside Reykjavik, the picture is more limited but not hopeless. Most restaurants in larger towns like Akureyri, Hofn, and Selfoss can accommodate vegetarian requests, and many have at least one dedicated vegetarian dish. In very small towns and rural areas, options narrow considerably -- you may find yourself relying on side dishes, salads, or soup. Self-catering becomes especially important for vegetarian and vegan travellers venturing into the countryside.

Gluten-free awareness is reasonably good in Iceland, particularly in Reykjavik restaurants where staff are generally knowledgeable about ingredients. Supermarkets stock a range of gluten-free products, including bread and pasta alternatives. For other dietary requirements or allergies, most restaurants are willing to accommodate if you ask clearly -- Icelanders are pragmatic and helpful, and kitchen staff will typically adjust dishes when possible.

Dining Etiquette

Tipping is not expected in Iceland. Service charges are included in all restaurant prices, and servers are paid a living wage. You will not offend anyone by leaving no tip, and Icelanders themselves do not tip. If you receive truly exceptional service, rounding up the bill or leaving a small amount is appreciated but never anticipated. Credit card machines may present a tip option -- feel free to skip it without guilt.

Reservations are recommended for popular Reykjavik restaurants, especially on Friday and Saturday evenings and during peak summer tourist season. For high-end restaurants like Dill, Grillid, or Rok, booking several days in advance is wise. Outside Reykjavik, reservations are less necessary but still a good idea at well-known spots like Fridheimar, which can fill up with tour groups. Casual restaurants and food halls operate on a walk-in basis.

Dress code in Iceland is remarkably relaxed. Even at upscale restaurants, smart casual is the most that is expected, and many fine-dining establishments will seat you in clean hiking clothes without complaint. Icelanders are informal by nature, and the dining atmosphere reflects this. Water is always served free of charge -- simply ask for tap water, which is excellent. Do not order bottled water; it is an unnecessary expense for an identical product.

Alcohol is expensive in Iceland due to high taxes. Beer at a restaurant or bar costs 1,200-1,800 ISK per pint, and wine is similarly priced. The government-run Vinbudin liquor stores are the only place to buy alcohol outside of bars and restaurants. Savvy travellers buy alcohol at the duty-free shop at Keflavik Airport upon arrival -- the savings compared to Vinbudin prices are substantial, and most experienced visitors consider this an essential first stop.