• Kraft Heinz announced Tuesday that it is forming a joint venture with TheNotCompany, a Chilean start-up that makes plant-based substitutes.
• The goal of the joint venture is to "democratize" plant-based food, according to Kraft Heinz's U.S. president, Carlos Abrams-Rivera.
• Kraft Heinz is in the middle of a turnaround that includes revamping its best-known brands, like Oscar Mayer.

Hot dogs could be the next grocery store item to get a plant-based makeover.

Kraft Heinz announced Tuesday it is forming a joint venture with TheNotCompany, a Chilean start-up valued at $1.5 billion that creates plant-based substitutes for eggs, milk and meat. Shares of Kraft Heinz closed Tuesday up 5% on the news. The stock was down less than 1% in morning trading Wednesday.

"Now we will have the advantage of bringing the products you love from the brands you trust also with a plant-based option," Kraft Heinz U.S. President Carlos Abrams-Rivera said Wednesday on CNBC's "Squawk Box."

"It's thinking about whether you have Oscar Mayer hot dogs and Oscar Mayer 'Not Hot Dogs,'" he added.

Kraft Heinz is in the middle of a turnaround that includes revamping its best-known brands, like Oscar Mayer. A year and a half ago, the company revealed a master plan for Oscar Mayer that included new packaging, simpler ingredient lists and marketing that focuses on its status as an iconic American brand. The branding changes came after the company wrote down Oscar Mayer's value in the fourth quarter of 2018 and again in the second quarter of 2019.

Abrams-Rivera said that the goal of the joint venture is to "democratize" plant-based food. Meat substitutes that are meant to mimic the taste and texture of the animal-based version, like those made by Beyond Meat and Impossible Foods, still cost shoppers more in the grocery store than regular chicken or beef.

According to Abrams-Rivera, roughly a third of Americans follow a flexitarian diet, which involves reducing meat intake in favor of more plant-based foods. As more consumers have added meat alternatives to their diets, Big Food has followed. PepsiCo is working with Beyond on a joint venture to create new plant-based snacks and drinks. Meat processing giant Tyson Foods has its own line of plant-based substitutes.

Still, some have their doubts about the long-term interest in plant-based substitutes. Investors have taken their skepticism out on Beyond Meat, which has seen its shares tumble 65% over the last 12 months. Wall Street analysts have largely lost their confidence in the company as its grocery sales growth has slowed.