Much of Iceland’s nightlife has been fueled by a local aquavit called Brennivín, but a nascent craft beer scene is changing the landscape. Beer, outlawed until 1989, has sparked the country’s imagination. Now there are more than a dozen local brews, and new ones are born nearly every month. “Icelanders are finally realizing beer can have a lot of different flavors and colors, that it pairs well with food,” says local brewmaster Sturlaugur Jón Björnsson. “But best of all, unlike wine, which is imported, we can make beer ourselves.”
This mammoth brewery, built in 1913 just before Prohibition, survived 75 years by producing malt extract, a Guinness-like nonalcoholic drink. Now it has a tiny onsite microbrewery featuring beers in local flavors such as cumin, angelica and wild thyme. The results are served at its cubbyhole of a bar. Try brewmaster Sturlaugur Jón Björnsson’s most recent blends, launched under Olgerðin’s own Borg brand: a well-hopped, American-style, bitter IPA, and a sushi- and raw fish–friendly blond ale. At 7 Grjóthálsi; 354/412-8000; olgerdin.is.
Local menswear designer Skjöldur Sigurjonsson opened this sprawling, laid-back hot spot for his friends, a coterie of artists and intellectuals. “We have a lot to talk about, but we don’t want to dance,” he says. After work, Olstofan’s brazier-heated patio is filled with the clanking of glasses and shouts of “Skál!” Sigurjonsson stocks his own microbrews, including the apricot-like Brio, named in memoriam for a songwriter friend who was once a regular. At 4 Vegamótastígur; 354/552-4687.
This hotel and its bar are named after the area’s postal code, which—thanks to the hit novel 101, Iceland’s version of Dazed and Confused—is now synonymous with artsy hipsters. The all-white, torpedo-shaped bar is futuristic and glossy, but a cozy fireplace and leather armchairs offer retro touches. The cocktails are among some of Iceland’s finest, but try the cask-strength local brews—9 percent ABV (alcohol by volume) or higher—like the aptly named Lava. At 10 Hverfisgata; 354/580-0101; 101hotel.is.