In a medium-sized saucepan, add 2½ cups chicken stock and 1 cup milk. Bring ingredients to a simmer over medium heat.

Add grits and butter and let cook according to package directions. When the grits are cooked, add the smoked Gouda cheese and stir to combine. Season to taste with salt and pepper.

Set aside and keep warm. Prior to serving, if the grits seem too thick, add a small amount of chicken stock or milk until the desired consistency is reached.