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The Icelandic food worth trying: skyr, langoustine in Höfn, the fresh catch of the day, free-range lamb and a Bæjarins Beztu hot dog in Reykjavík. Braver eaters can add rye bread baked in a hot spring, lamb soup and fermented shark. Eating out is expensive, so we cooked most meals and saved our budget for these.
Everyone knows eating out in Iceland is expensive by international standards. On our February 2018 trip, we mostly ate in or on the go, and the two dinners we had out cost about S$120 each for two. Cooking our own meals saved money, but some things are worth trying while you're there. I tried numbers 1 to 6 and gave the last three a miss :P
1. Skyr (Icelandic Yogurt)
Skyr is my absolute favourite. Technically a soft cheese, it tastes like Greek yogurt but milder, and it's high in protein. There are many brands in the supermarket; mine is Ísey Skyr, and my favourite flavour has got to be crème brûlée. It's so good I brought some home to share with my favourite people.
2. Langoustine (Icelandic Lobster)
Langoustine was the best thing I ate in Iceland: tender and delicious. It's a little pricey, but lobster in Singapore isn't cheap either. We had it at Pakkhús in Höfn, the langoustine capital of Iceland, and it was a memorable dinner. Pakkhús is open all year and doesn't take reservations, so arrive early. Fresh langoustine is in season from about May to August.
3. Catch of the Day
Fishing has been one of Iceland's biggest exports and economic drivers for centuries, so the fish is fresh and delicious. Instead of ordering from the menu, try the catch of the day, caught that morning. We had it in Höfn, served with a creamy, buttery sauce, and it was superb!
4. Icelandic Lamb
Icelandic sheep roam free outdoors from spring to autumn, grazing on grass and wild herbs, which gives the meat a distinctive flavour. Lamb is one of Iceland's finest and most-used ingredients, and a Christmas favourite. I'm not a lamb lover, but ours was really tender and juicy. The only thing that stops me is the gamey smell.
5. Reykjavík Hot Dog (Pylsur)
The most famous hot dog in Reykjavík is Bæjarins Beztu Pylsur, a tiny stand near the harbour that's been selling hot dogs since 1937. The sausage is a blend of lamb, pork and beef. Order "eina með öllu" (one with everything): raw and crispy fried onions, ketchup, sweet brown mustard and remoulade. We were lucky there was no queue (we went at an odd hour, 4pm). They're not big, so grab two if you're hungry. And yes, they take cards.
6. Bacon and Mushroom Cream Cheese Spread
Back home, cream cheese spread is usually plain, so when we saw bacon and mushroom flavour, we grabbed it. There are no big chunks of bacon, but you can still taste it. It's sold in most supermarkets, and some guesthouses we stayed at had it for breakfast.
Foods We Didn't Try (But You Might)
7. Rye Bread (Rúgbrauð)
Rúgbrauð is a traditional Icelandic staple, sometimes baked slowly in pots buried in the ground near a hot spring. It's dense and sweet. We saw it in supermarkets but didn't buy any because it smelt like hua kueh (an Asian brown steamed cake) to us, and it came in a big loaf. Try it with butter and smoked fish, or in the geothermal bakery at Laugarvatn Fontana on the Golden Circle.
8. Lamb Soup (Kjötsúpa)
Icelandic lamb soup is on every food lover's list: a hearty, rich soup of lamb and root vegetables. We gave it a miss after the lamb steak, as I'm not a fan of the gamey smell. It's a perfect warmer on a cold day.
9. Fermented Shark (Hákarl)
Fermented shark is a traditional food from times when food was scarce in winter. The Greenland shark meat is fermented for weeks, then hung to dry for months, giving it a strong ammonia smell. Today, few locals eat it regularly; it's mostly served at the midwinter Þorrablót feast. We gave it a miss after reading the reviews. If you're curious, try a small cube with a shot of Brennivín.
How to Save on Food in Iceland
- Shop at Bónus or Krónan: the cheapest supermarkets, with a wide range including Asian spices and frozen food.
- Stay somewhere with a kitchen: guesthouses and apartments let you cook breakfast and dinner. Compare Reykjavík stays on Agoda. (Affiliate link)
- Drink tap water: it's excellent and free.
- Eat the big meal at lunch: many restaurants have cheaper lunch menus, and some cafés offer soup of the day with free refills.
Icelandic Food FAQ
What food is Iceland famous for?
Skyr, lamb, fresh fish and langoustine, hot dogs (pylsur), rye bread baked in hot springs, lamb soup and, famously, fermented shark (hákarl).
How much does it cost to eat out in Iceland?
Restaurants are expensive because most food is imported. When we visited in 2018, a restaurant dinner for two cost about S$120–140. Expect a main course of around ISK 4,000–8,000 today, and save by shopping at Bónus or Krónan supermarkets.
Where is the best hot dog in Reykjavík?
Bæjarins Beztu Pylsur, a tiny stand near the harbour that has been selling hot dogs since 1937. Order one with everything: raw and crispy onions, ketchup, sweet brown mustard and remoulade.
Should I try fermented shark?
Only if you're curious. Hákarl is a traditional winter food with a strong ammonia smell; few Icelanders eat it regularly today. We gave it a miss.
Prices marked 2018 are from our trip. Updated as of October 2026. This post contains affiliate links; if you book through them, we may earn a small commission at no extra cost to you.