Buttermilk adds a subtle, creamy tang to the grits.
Bring water, whole milk, and salt to a boil in a medium saucepan over medium-high. Gradually whisk in uncooked grits; return to a boil. Reduce heat to medium-low, and simmer, stirring occasionally, until creamy and thickened, 25 to 30 minutes. Remove from heat, and stir in buttermilk and butter.
Cook pancetta in a large skillet over medium, stirring often, until browned and crisp. (You will have about 1/2 cup cooked pancetta.) Remove with a slotted spoon, reserving 2 Tbsp. drippings in skillet. Chop onions. Cook in reserved drippings over medium-high, stirring constantly until caramelized, 15 to 20 minutes. Stir in sage. Stir onions and pancetta into warm grits. Sprinkle servings with crumbled blue cheese.