In a medium sauce pan, cook bacon over medium heat until crisp. Remove from pan and set aside for later.
Remove all but 2 tablespoons of bacon grease from pan. Over medium low heat, add garlic and shallots. Cook for 2 minutes, or until garlic is fragrant and onions begin to soften.
Add milk to saucepan and bring to a boil.
Whisk grits into the boiling milk. Reduce heat to low and cover pot. Stir often and cook until all the milk is absorbed.
Remove from heat and stir in butter, cream, and white cheddar. Mix in reserved bacon, chopped, and add salt and pepper to taste.