01 - In a medium saucepan, combine whole milk and water, then bring to a gentle boil over medium heat.
02 - Gradually whisk in the stone-ground grits to prevent any clumping and ensure a smooth consistency.
03 - Reduce the heat to low, cover the saucepan, and allow the grits to simmer, stirring periodically, until they are thick and creamy, which typically takes between 20 to 25 minutes.
04 - Stir in the unsalted butter, salt, and black pepper until all ingredients are fully incorporated.
05 - Remove the saucepan from the heat and gently fold in the shredded sharp cheddar cheese until it is completely melted and the grits are smooth.
06 - Taste the cheesy grits and adjust seasonings if necessary. Serve hot immediately as a side dish.