Ístex: The story of Icelandic wool

By Celina Tran | Photos: Ístex

In the far reaches of the North Atlantic, where moss-covered lava fields meet sweeping highlands, a quiet industry has endured for over a millennium. Here, sheep roam freely across rugged terrain shaped by fire and ice, their wool evolving alongside the landscape itself. At the heart of this story stands Ístex, a company rooted not only in production, but in preservation, community, and identity.

Founded in 1991 by farmers, Ístex remains a rare example of a vertically integrated wool enterprise. Today, it is still largely owned by those same farmers and their families, with around 90 per cent of shares held within the agricultural community. “We are all about making value from wool for farmers,” says Siggi Gunnarsson, CEO of Istex.

Ewe-nique sheep and Ram-arkable fibres

The value chain of wool begins long before the wool reaches the spinning mill. Across Iceland, family-run farms – typically home to 200-300 sheep – dot the coastal lowlands and stretch toward the highlands. These farms are built on generations of knowledge, dating back to Viking settlers who first relied on sheep for survival in a harsh and unpredictable climate.

During the summer months, Icelandic sheep roam freely across vast, untouched highlands, grazing on resilient vegetation and contributing to the delicate balance of the ecosystem. When autumn approaches and Arctic winds gather strength, they are brought back to the farms, where they are sheltered and nourished through the winter on locally grown hay.

This rhythm of life has shaped one of the world’s most distinctive natural fibres. Icelandic wool is dual-coated, consisting of tog (the long, strong outer fibres) and þel (the fine, insulating inner fibres). Together, they create a material that is lightweight yet warm, breathable yet water-repellent, and remarkably durable. “The wool is dual fleece with the strong and durable outer tog and the soft inner þel,” Siggi explains. “And of course, Icelandic wool is clean and sustainable, free of unwanted chemicals like pesticides, hormones, and herbicides.”

Ístex: The story of Icelandic wool

Threading softly

Ístex collects between 98 and 99 per cent of all wool produced in Iceland, making it a central pillar of the country’s wool economy. From collection, the journey continues to the company’s washing plant in Blönduós, where wool is cleaned using geothermal water and renewable energy in a process designed to produce no CO2 emissions. It is then transported to the spinning mill in Mosfellsbær, where the iconic Lopi yarn is created.

“We have a clear direction to protect, innovate, and promote the heritage of the Icelandic wool industry and the unique characteristics of the Icelandic sheep breed globally,” says Siggi. “Our main business is making Lopi yarn, which we sell all around the world.”

Yet Ístex is more than yarn. Through its expanding portfolio, the company produces woven blankets and wool duvets, bringing Icelandic wool into homes across continents. Throughout this process, the essence remains unchanged: a commitment to quality, sustainability, and the people behind the product. “Few in the wool industry are connected across the entire production chain – from the unique Icelandic sheep and farmers to washing, production, design, and the end customer,” Siggi notes. “That connection is very important to us.”

Ístex turns Icelandic wool into its iconic Lopi yarn.

Happy flock, happy fleece

Animal welfare is another cornerstone of the Icelandic wool story. The country’s geographic isolation has protected its sheep from many diseases and pests common elsewhere, reducing the need for antibiotics or chemical treatments. Practices such as mulesing and dehorning are not part of Icelandic farming, and veterinary oversight ensures high standards of care.

For Ístex, sustainability is an inherited responsibility, one that is owed not only to their community but also to the landscape. Icelandic wool is biodegradable, recyclable, and part of a natural carbon cycle, offering a compelling alternative to synthetic fibres that contribute to microplastic pollution.

Ístex: The story of Icelandic wool

Still, the wool industry is not without its challenges. Global markets fluctuate, demand shifts, and traditional crafts must compete with fast fashion. Gunnarsson explains that Ístex approaches these realities with pragmatism and a sense of partnership. “We are always looking for friends and partners, never a quick or one-time sales,” he says. “The wool industry goes in cycles up and down. We need to help when we can.”

At its core, Ístex wants to keep the circle of Icelandic wool intact. This means creating value from local resources, supporting the farming community, maintaining sustainability and quality, and preserving a cultural heritage that stretches back over a thousand years. “The main goal is to keep the circle of Icelandic wool going,” Gunnarsson says.

In a world increasingly disconnected from the origins of what we wear and use, Ístex offers transparency, continuity, and authenticity. From the windswept highlands to the hum of the spinning mill, every thread tells a story, not just of wool, but of a people and a place where tradition and innovation are woven tightly together.

Ístex: The story of Icelandic wool