I was completely surprised by the quality, diversity and choice of restaurants available in Reykjavik, something I was really not expecting. You could almost say this was a culinary destination in itself. Food wise, there is really something for everybody, all ingredients and meals we had were superb. It is quite astounding to find this in such a remote country.
It is certainly not cheap to eat out in Iceland, although if you do some research, there are more affordable (and still excellent) places in which to dine. It is probably around £25 for a main course in an average restaurant, lots of places charge much higher prices than that. I did think though, overall value for money was excellent, as the quality of the food was so good.
Unsurprisingly, fish is an important part of the diet in Iceland. Most restaurants also had a lamb dish available. You can find whale, dolphin, puffin, reindeer and horse on lots of menus. Seafood included lobster, herring, haddock and halibut. Horse (hestur) seemed to be generally served in stew like dishes - we did not try this. Dried haddock is a bit of a staple dish and is sold in most convenience shops. They only serve minke whale which apparently is not an endangered species, although the decision by Iceland to hunt them is somewhat controversial. We did eat whale one evening, it came served in a pepper sauce, was quite nice and tasted like a cross between beef and fish (a little strange).
Hakarl sounded absolutely gross to me, but apparently the Icelanders love it. This is raw shark meat. It is usually served as an appetiser.
We found most dishes did not come with vegetables.
Icelanders seem to eat a lot of dairy products including skyr (a bit like yoghurt) and mysa (whey). Skyr is delicious, it tastes a bit like yoghurt, creme fraiche and cream cheese mixed together. They have all kinds of berry flavours and it is non-fat.
Alcohol is extremely expensive and drives up the cost of eating out quite a lot. You can drink water from the tap - it is pure spring water, just make sure you let the tap run for a few minutes to make sure no hot water is mixed in - you can tell by the sulphur smell if it is!
The clean environment makes the local food some of the healthiest in Europe and most of it is plain cooked. A lot of the restaurants we ate in also had children's menus with food for even the pickiest of eaters.
Definitely try the hot dogs in Iceland - they don't look too different and I didn't see what the fuss was about until I had one myself - they are delicious. They come topped with raw and crispy onions, mayonnaise, ketchup and are a cheap but very tasty lunch option.
Also try the coffee shops - there are lots of these and they are all great. A particular favourite of ours was the Laundromat. Icelanders drink a lot of coffee, you see the locals in the coffee shops and you can linger for ages with newspapers and magazines. Most cafes serve coffee and food in the day and then are clubs and bars at night. They tend to open around 11am and close really late.
There are no international chains that we could find - so refreshing and a real highlight for us. The coffee shops were all independent, as were all the restaurants, snack places etc. such a great change for us in the UK, where all cities seem to be dominated by the same names. We absolutely loved this.