Where to find the best food in Iceland & what to eat

Have you heard the one about selling ice to Icelanders?

Funny, ha, ha … but it’s not a joke.

There was a public outcry in Iceland last year when it was discovered that the North Atlantic nation known as the land of fire and ice was importing ice cubes from, would you believe, Norway?

As a remote and inhospitable country Iceland relies heavily on food imports. They simply don’t grow much at home. But Iceland has plenty of clean, good quality water and ice and some locals weren’t at all happy about the ice cube imports.

So, what is local to Iceland and what’s on the menu in Icelandic restaurants?

The locals told us their national dish is lamb and that’s one thing they have plenty of. Drive around Iceland and you’re bound to bump into a few sheep. Ambling across the road, munching away on grass at the side of the road. Cute little black and white lambs everywhere. I’ve never seen so many black sheep outside of families!

The thing is, it put me off eating lamb for a while because they were so cute – we tried hard not to kill them on the road so I couldn’t countenance the thought of killing them for food.

Fishing is also big. Real big. Cod is the thing and in some areas, like Höfn in the southeast, lobster or langoustine is the catch of the day, every day. Fish soup is popular, delicious and warming. It’s a ‘must try’.

I particularly liked Skyr, kind of a mix between yoghurt and crème fraiche which is creamy and delicious (yum), perfect on your muesli in the morning or as a snack. And I did like the Icelandic pancakes we gobbled up in the north – thin like crepes, filled with fresh whipped cream and strawberry jam.

Iceland is also famous for its hot dogs. Not something that I care for but there’s a tiny hot dog stand in downtown Reykjavik that’s famous for feeding Bill Clinton. It’s called Bæjarins beztu pylsur which translates to ‘The best hot dog in town’. It’s basically a tiny food cart that only serves hot dogs with mustard, mustard and more stuff like mustard. We had to try it of course and I stood in drizzling rain eating my once-in-a-decade hot dog.

Hot dogs are popular with tourists because food is so expensive in Iceland. Eating out can be crippling cost-wise so a lot of travellers stay in self-catering accommodation, or hire big camper vans, stock up on supplies at the supermarket like Bonus and Nettó and cook for themselves.

We did this a couple of nights but one of the things I love about travel is eating out in local restaurants. Thankfully we’re not 25 and counting every penny so we just ordered a Gull beer, closed our eyes and savoured the experience.

Here are my eight favourite places to eat and where you’ll find some of the best food in Iceland:

#1. Geitafell Seafood Restaurant North Iceland

We loved this place. It’s in the middle of nowhere, a 27-kilometre drive on gravel road from the nearest town, Hvammstangi on the Vatsnes Peninsula in northern Iceland. I discovered Geitafell on a travel blog and booked it weeks in advance.

We ate there just before peak season so the restaurant was quiet. The owner and his extended family were dining at a large table and there was a relaxed, homely feel about the place.

We had the specialty fish soup with salad and home-baked bread which was divine. We also had the skyr cake and the rhubarb slice, all made by family members.

It’s really worth going out of your way to dine here.

#2. Pakkhús Restaurant Höfn, Southeast Iceland

Höfn is a fishing town in southeast Iceland famous for its lobsters. The Pakkhús restaurant overlooks the harbour which is chock-full of fishing boats. Despite being eye-bleedingly expensive we splashed out and ordered the local specialty: chargrilled langoustines.

Let’s just say, #NoRegrets! They were Delicious. And Plentiful – no nouvelle cuisine portions here.

We tried the licorice creme brûlée for dessert. It was a normal crème brûlée with a stick of licorice at the base. It didn’t really work.

This was our most expensive meal in 11 days in Iceland. The main courses set us back about $AUD90 each and the whole meal cost close to $AUD250.

#3. Red House Restaurant Rauða Húsið in Eyrarbakki, South Iceland

There aren’t a lot of places to eat in Eyrarbakki and given this was early on in our road trip, I didn’t want to cook at home. That’s how we ended up at the Red House which is a fine dining restaurant in south Iceland. You can’t go past the Cream of Langoustine soup as a main course. Not only is it very good, you get a free refill with it so you won’t go home hungry. It’s by far the best value item on the menu.

#4. Kaffi Lara – El Grillo Bar Seyðisfjörður, East Iceland

Simple, healthy food in a cosy pub in one of the prettiest villages in Iceland. The best bit is you don’t feel like you’re eating out. Order the BBQ cod and roast potato, it was delicious.

It was very lively when we visited. A European Champions League soccer match was playing on the TV upstairs and the locals were very vocal throughout the game.

The pub is named after an English ship SS El Grillo that was bombed and sunk by German airplanes in the second World War. The wreck is now a famous dive site in Seyðisfjörður harbour.

#5. Sjávarpakkhúsið Stykkisholmur, West Iceland

This restaurant is in an old building right by the marina in Stykkisholmur harbour, a big fishing town in Iceland. It’s a great location with a pretty outlook and a nice, relaxed vibe. The restaurant has loads of character with old black and white photos of fisherman on the walls. We had the cured cod for entrée – highly recommended – and the fish of the day for main.

#6. Fish restaurant, Reykjavik

This is a cute restaurant in the heart of Reykjavik, not too expensive by Iceland standards, and not at all pretentious. It was very inviting with a cosy atmosphere. The focus is on home-style cooking and we enjoyed steamed fish with veggies followed by delicious hot apple pie. I’d definitely go back.

Our waitress was Korean who’d spent time in New Zealand and was in Iceland to visit her mother! A lovely reminder that it’s a small world and everyone has a story.

# 7. Essensia Reykjavik  

Essensia is a stylish modern restaurant not far from the Harpa Concert Hall and Exhibition Centre in Reykjavik. While it felt like it could be an upmarket, architect-designed restaurant in any city, the chargrilled cod came from the Westfjords and was beautifully cooked.

# 8. Julia & Julia cafe in the Culture Centre, Reykjavik

After finishing our free walking tour of Reykjavik in the rain we were wet and cold and needed something to warm us up. While you can get smashed avo and cherry tomatoes on toast at the Julia & Julia café, the best deal in this place is the hot chocolate combined with a super-rich, scrumptious, warm chocolate chip cookie that’s been cooked in a skillet.

What to drink in Iceland?

If you’re into wine like me, then Iceland doesn’t offer a lot of choice. There’s certainly a business opportunity worth exploring if you’re a wine merchant! In pubs everywhere and restaurants outside of Reykjavik, most of the wine came in small 387ml bottles from Argentina, Chile, and Australia. You could buy 750ml bottles of ‘better labels’ in some places but it was incredibly expensive.

If you’re a beer drinker there’s plenty of choice though JJ my travel buddy stuck to Gull and Viking.

The local water is totally fine to drink so whatever you do, don’t buy bottled water, just fill up from the tap.

For a comprehensive travel guide to Iceland read our Epic Iceland Road Trip post with planning advice, tips, and Ring Road itinerary.

If you need a little more Iceland inspo, take a look at these droolworthy Iceland photos.