In 4-quart Dutch oven, cook bacon until crisp; drain on paper towels. Crumble bacon; set aside. Reserve 2 tablespoons drippings. Cook shallots in bacon drippings over medium heat, stirring occasionally, until tender. Stir in flour, salt and pepper. Cook and stir until mixture is smooth and bubbly. Gradually add milk, stirring constantly until mixture boils and thickens.