In a Dutch oven, cook the bacon over medium-heat, stirring occasionally, until the bacon is just crisp- 12 to 15 minutes. Remove the bacon with a slotted spoon, and drain on a plate lined with paper towels, reserving 1 tablespoon drippings in the Dutch oven.
Add the onions to the hot drippings; cook over medium heat, stirring occasionally, until the onion is slightly caramelized, about 12 minutes. Stir in the cooked bacon, vinegar, brown sugar, water and mustard seeds. Reduce the heat to low, partially cover, and cook, stirring occasionally, until the mixture is the consistency of jam, 60 to 70 minutes.
Remove the pan from the heat, and stir in the salt and pepper. Cool to room temperature, about 30 minutes. Store in an airtight container in the refrigerator for up to 1 week.
Notes
Cook low and slow for best flavor and texture
Stir occasionally to prevent sticking
Don’t rush the process—this is where the flavor develops
Store in the fridge and reheat slightly before serving