Preheat grill to 350°setup with a direct and indirect cooking zone
Place cast iron skillet skillet over the direct zone, sauté bacon pieces until crispy, about 10 minutes
Remove bacon and drain all but 1 Tbs of bacon grease
Add onion and garlic, cooking until tender, about 3 minutes
Add cider vinegar, brown sugar, bourbon, water, chili, and black pepper, mix well
Bring to a boil, then move to indirect zone to simmer, stirring occasionally, until liquid is mostly cooked off, about 15 minutes. Mixture will be thick and syrupy.
Use immediately, or place into glass jars, seal, and refrigerate for 1-2 weeks.