Cook bacon and onion together in a large pot over medium heat until the onion is translucent, about 5 minutes. Add ground beef, garlic and cumin to the pot; cook and stir until the beef is completely browned, 7 to 10 minutes.
Stir kidney beans, diced tomatoes, water, chili powder, liquid smoke, salt, black pepper, and hot pepper sauce into the beef mixture; bring to a simmer and cook until thick, about 1 hour. Skim excess grease if desired.