Hormel is forming the joint venture through its venture capital arm, 199 Ventures.
The Hormel product will include Better Meat's Rhiza mycoprotein ingredient, which is produced with a potato-based fermentation.
Rhiza is an all-natural whole food mycoprotein with a meat-like texture, Hormel said. It said Rhiza has more protein than eggs and more iron than beef.
Hormel already sells plant-based proteins such as Planters peanuts, Skippy peanut butter and Justin's nut butters.
It also has several plant-based pizza toppings in the food-service industry through its Burke subsidiary and under the Happy Little Plants brand.
Better Meat was founded in 2018 and is based in West Sacramento, Calif.
Hormel stock recently traded at $41.22, little changed. It has slumped 14% over the past three months.
In other food and beverage news Wednesday, Constellation Brands (STZ) the owner of Corona and Modelo beers, posted weaker-than-expected earnings for the second quarter.
But it topped analysts’ revenue forecasts and boosted its full-year profit outlook, as it sees improving sales volume for beer in the second half of its fiscal year.
Constellation Brands said adjusted earnings for the three months ended in August, the group's fiscal second quarter, hit $2.38 per share, down 13.8% from last year. That trailed analysts’ forecast of $2.77.
Revenue fell 5% to $2.37 billion, beating analysts' estimate of $2.3 billion.
Constellation expects earnings of $10.15 to $10.45 a share for fiscal 2022, up 15 cents from its prior forecast.