Place onion in a lightly greased roasting pan or 13- x 9-inch baking pan. Bake at 350° for 10 minutes or until tender.
Add sauerkraut and next 6 ingredients, stirring until well blended. Pour water over the surface. Bake, covered, 1 hour. Uncover and bake an additional 30 minutes. If desired, place grilled bratwurst on sauerkraut mixture for the last 30 minutes of baking time.