In a large skillet over medium heat, add diced bacon and cook until crispy, about 6-8 minutes. Remove the bacon, leaving the rendered fat in the skillet.

In the same skillet, add thinly sliced onions to the bacon fat and cook over medium heat until they turn golden brown, about 10-12 minutes.

Add chopped yellow or red potatoes to the skillet with the caramelized onions. Season with salt, pepper, and optional caraway seeds. Cook for about 15-20 minutes until tender and golden brown.

Nestle the bratwurst sausages into the potato and onion mixture. Pour in beer or cider to deglaze the skillet and cook for about 5 minutes.

Gently stir in the sauerkraut, cover the skillet, reduce heat to low, and simmer for 10-15 minutes until bratwurst is fully cooked.

Crumble the reserved crispy bacon on top just before serving and garnish with fresh herbs if desired.